CREDIT AGREEMENT
among
TRENWICK AMERICA CORPORATION,
TRENWICK HOLDINGS LIMITED,
VARIOUS LENDING INSTITUTIONS,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT
and
FLEET NATIONAL BANK,
AS DOCUMENTATION AGENT
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Dated as of November 24, 1999
and Amended and Restated as of September 27, 2000
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$490,000,000
CHASE SECURITIES INC.,
AS ADVISOR, LEAD ARRANGER AND BOOK MANAGER
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TABLE OF CONTENTS
Page
SECTION 1. Revolving Credit Facility.........................................2
1.01 Commitments....................................................2
1.02 Minimum Amount of Each Borrowing; Maximum Number
of Borrowings..................................................2
1.03 Notice of Borrowing of Revolving Loans.........................2
1.04 Disbursement of Funds..........................................4
1.06 Conversions....................................................4
1.07 Pro Rata Borrowings............................................4
1.08 Interest.......................................................5
1.09 Interest Periods...............................................5
1.10 Increased Costs, Illegality, etc...............................6
1.11 Compensation...................................................9
1.12 Change of Lending Office.......................................9
1.13 Replacement of Banks...........................................9
SECTION 2. Letter of Credit Facility........................................10
2.01 Letters of Credit.............................................10
2.02 Letter of Credit Request; Notices of Issuance.................12
2.03 Agreement to Repay Letter of Credit Payments..................12
2.04 Increased Costs...............................................12
2.05 Letter of Credit Expiration Extensions........................13
2.06 Changes to Stated Amount......................................13
2.07 Representations and Warranties of L/C Banks...................14
SECTION 3. Fees; Commitments................................................14
3.01 Fees..........................................................14
3.02 Voluntary Reduction of Commitments............................15
3.03 Mandatory Reductions of Commitments...........................15
SECTION 4. Payments.........................................................16
4.01 Voluntary Prepayments.........................................16
4.02 Mandatory Repayments and Prepayments..........................16
4.03 Method and Place of Payment...................................19
4.04 Net Payments..................................................20
SECTION 5. Conditions Precedent.............................................21
5.01 Execution of Agreement........................................22
5.02 No Default; Representations and Warranties....................22
5.03 Officer's Certificate.........................................22
5.04 Opinions of Counsel...........................................22
5.05 Corporate Proceedings.........................................22
5.06 Adverse Change, etc...........................................23
5.07 Litigation....................................................23
5.08 Subsidiary Guaranty...........................................23
5.09 Consummation of the LaSalle Business Combination..............23
5.10 The Original Credit Agreement.................................23
5.11 Financial Statements; Projections.............................24
5.12 Approvals, etc................................................25
5.13 Indebtedness..................................................25
5.14 Payment of Fees...............................................25
5.15 Letter of Credit Request; Notice of Borrowing.................25
5.16 Capital Structure.............................................26
5.17 Solvency Certificate..........................................26
5.18 A.M. Best Rating..............................................26
5.19 Holdings Guaranty.............................................26
SECTION 6. Representations, Warranties and Agreements.......................26
SECTION 7. Affirmative Covenants............................................27
SECTION 8. Negative Covenants...............................................27
SECTION 9. Events of Default................................................27
9.01 Payments......................................................27
9.02 Representations, etc..........................................27
9.03 Covenants.....................................................27
9.04 Default Under Other Agreements................................27
9.05 Bankruptcy, etc...............................................28
9.06 ERISA.........................................................28
9.07 Guaranties....................................................29
9.08 Judgments.....................................................29
9.09 Change of Control.............................................30
9.10 Senior Unsecured Debt Ratings.................................30
9.11 A.M. Best Ratings.............................................30
SECTION 10. Definitions.....................................................30
SECTION 11. The Administrative Agent........................................30
11.01 Appointment..................................................30
11.02 Delegation of Duties.........................................31
11.03 Exculpatory Provisions.......................................31
11.04 Reliance by Administrative Agent.............................32
11.05 Notice of Default............................................32
11.06 Non-Reliance.................................................32
11.07 Indemnification..............................................33
11.08 The Administrative Agent in its Individual Capacity..........33
11.09 Successor Administrative Agent...............................33
11.10 Other Agents.................................................34
SECTION 12. Trenwick America Guaranty.......................................34
12.01 The Trenwick America Guaranty................................34
12.02 Bankruptcy...................................................34
12.03 Nature of Liability..........................................34
12.04 Trenwick America Guaranty Absolute...........................35
12.05 Independent Obligation.......................................35
12.06 Authorization................................................35
12.07 Reliance.....................................................36
12.08 Subordination................................................36
12.09 Waivers......................................................36
12.10 Trenwick America Guaranty Continuing.........................37
12.11 Binding Nature of Guaranties.................................37
12.12 Judgments Binding............................................38
SECTION 13. Miscellaneous...................................................38
13.01 Payment of Expenses, etc.....................................38
13.02 Right of Setoff..............................................38
13.03 Notices......................................................39
13.04 Benefit of Agreement.........................................39
13.05 No Waiver; Remedies Cumulative...............................41
13.06 Payments Pro Rata............................................42
13.07 Computations.................................................42
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.............43
13.09 Counterparts.................................................44
13.10 Effectiveness................................................44
13.11 Headings Descriptive.........................................45
13.12 Amendment or Waiver..........................................45
13.13 Survival.....................................................45
13.14 Domicile of Loans............................................45
13.15 Confidentiality..............................................45
13.16 WAIVER OF JURY TRIAL.........................................46
13.17 Judgment Currency............................................46
13.18 Euro.........................................................47
SCHEDULE I -- Definitions
ANNEX I -- List of Banks and Commitments
ANNEX II -- Bank Addresses
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B -- Form of Letter of Credit
EXHIBIT C-1 -- Legal Opinion of Xxxxxxx, Xxxxxxxx & Xxxxx
EXHIBIT C-2 -- Legal Opinion of Xxxxxxx Xxxx & Xxxxxxx
EXHIBIT C-3 -- Legal Opinion of Xxxxx & XxXxxxxx
EXHIBIT C-4 -- Legal Opinion of Lovells
EXHIBIT C-5 -- Legal Opinion of Xxxx X. Del Col
EXHIBIT C-6 -- Legal Opinion of White & Case LLP
EXHIBIT D -- Form of Officer's Certificate
EXHIBIT E -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT F -- Subsidiary Guaranty
EXHIBIT G -- Form of Solvency Certificate
EXHIBIT H -- Form of Assignment and Assumption Agreement
EXHIBIT I -- Holdings Guaranty
CREDIT AGREEMENT, dated as of November 24, 1999 and amended
and restated as of September 27, 2000, among TRENWICK AMERICA CORPORATION, a
Delaware corporation (hereinafter referred to as the "Borrower"), TRENWICK
HOLDINGS LIMITED, a company organized under the laws of the United Kingdom (the
"Account Party"), the lending institutions listed from time to time on Annex I
hereto (each a "Bank" and, collectively, the "Banks"), FIRST UNION NATIONAL
BANK, as Syndication Agent (the "Syndication Agent"), FLEET NATIONAL BANK, as
Documentation Agent (the "Documentation Agent") and THE CHASE MANHATTAN BANK, as
Administrative Agent (the "Administrative Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H:
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WHEREAS, Trenwick Group Inc., a Delaware corporation
("Trenwick"), the Original Banks, the Syndication Agent, the Documentation Agent
and the Administrative Agent are party to a Credit Agreement, dated as of
November 24, 1999 (as the same has been amended, modified or supplemented to,
but not including, the Restatement Effective Date, the "Original Credit
Agreement"); and
WHEREAS, on March 20, 2000, Trenwick entered into an Amended
and Restated Agreement, Schemes of Arrangement and Plan of Reorganization (the
"Business Combination Agreement") with LaSalle Re Holdings Limited, a company
organized under the laws of Bermuda ("LaSalle Re Holdings"), LaSalle Re Limited,
a company organized under the laws of Bermuda ("LaSalle Re") and Trenwick Group
Ltd. (formerly known as Xxxxx Holdings International Limited), a company
organized under the laws of Bermuda ("Holdings"); and
WHEREAS, pursuant to the Business Combination Agreement, (i)
the assets and liabilities of Trenwick shall be transferred to Holdings, (ii)
the Borrower, the Account Party, certain other subsidiaries of Trenwick, LaSalle
Re Holdings and LaSalle Re shall become Subsidiaries of Holdings and (iii) all
of the common stock of Trenwick and LaSalle Re Holdings and certain of the
non-voting common stock of LaSalle Re shall be exchanged for the common stock of
Holdings (such transactions, collectively, the "LaSalle Business Combination");
and
WHEREAS, the parties hereto wish to amend and restate the
Original Credit Agreement to, inter alia, (i) substitute the Borrower for
Trenwick as the borrower under the revolving credit facility in the Original
Credit Agreement, (ii) substitute the Account Party for Trenwick as the account
party under the letter of credit facility in the Original Credit Agreement,
(iii) add Holdings and the Borrower as guarantors and (iv) permit the LaSalle
Business Combination; and
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks are willing to make available to the Borrower and the
Account Party the credit facilities provided for herein;
1
NOW, THEREFORE, the parties hereto agree that the Original
Credit Agreement shall be and is hereby amended and restated in its entirety as
follows:
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Revolving Credit Facility.
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1.01 Commitments. (a) Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees at any time and from
time to time on and after the Restatement Effective Date and prior to the
Conversion Date, to make a revolving loan or revolving loans (each a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower, which Revolving
Loans (i) may be made and maintained in such Approved Currency as is requested
by the Borrower (except that Base Rate Loans may only be denominated in Dollars)
and (ii) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar
Loans, provided that all Revolving Loans made as part of the same Borrowing
shall, unless otherwise specifically provided herein, consist of Revolving Loans
of the same Type, (iii) may be repaid and reborrowed in accordance with the
provisions hereof, (iv) shall not exceed for any Bank at any time outstanding
that aggregate Principal Amount which equals the Revolving Loan Commitment of
such Bank at such time and (v) shall not exceed for all Banks at any time
outstanding that aggregate Principal Amount which equals the Total Revolving
Loan Commitment at such time.
(b) Subject to and upon the terms and conditions set forth
herein, the Borrower and each Bank which has Revolving Loans outstanding at such
time agree that at 9:00 A.M. (New York time) on the Conversion Date, the
aggregate principal amount of Revolving Loans owing to such Bank and outstanding
at such time shall (unless such Revolving Loans have been declared (or have
become) due and payable pursuant to this Credit Agreement), without any notice
or action by any party, automatically convert to and thereafter constitute Term
Loans owing to such Bank hereunder. The Term Loans of each Bank (i) shall be
made and thereafter maintained in the same currencies in which the related
Revolving Loans were denominated as of the Conversion Date, (ii) shall, at the
option of the Borrower, be Base Rate Loans or Eurodollar Loans, provided that
(A) Base Rate Loans may only be denominated in Dollars and (B) all Term Loans
comprising the same Borrowing shall, unless otherwise specifically provided
herein, consist of Term Loans of the same Type and (iii) shall not exceed in
initial Principal Amount for such Bank an amount which equals the total
Principal Amount of Revolving Loans owed to such Bank and outstanding
immediately prior to the Conversion Date. Once repaid, Term Loans may not be
reborrowed.
1.02 Minimum Amount of Each Borrowing; Maximum Number of
Borrowings. The aggregate Principal Amount of each Borrowing hereunder shall not
be less than the Minimum Borrowing Amount. More than one Borrowing may be
incurred on any day; provided that at no time shall there be outstanding more
than five Borrowings of Eurodollar Loans.
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1.03 Notice of Borrowing of Revolving Loans. (a) Whenever the
Borrower desires to incur Revolving Loans, it shall give the Administrative
Agent at its Notice Office, (x) prior to 11:00 A.M. (New York time), at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Eurodollar Loans in Dollars, (y)
prior to 1:00 P.M. (New York time) at least four Business Days' prior written of
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans constituting Alternate Currency Loans and (z) prior to 11:00
A.M. (New York time) at least one Business Day's prior written notice (or
telephone notice promptly confirmed in writing) each Borrowing of Base Rate
Loans. Each such notice (each, a "Notice of Borrowing") shall be in the form of
Exhibit A-1 and shall be irrevocable and shall specify (i) in the case of
Alternate Currency Loans, the Approved Currency for such Loans, (ii) the
aggregate principal amount of the Revolving Loans to be made pursuant to such
Borrowing (stated in the applicable Approved Currency), (iii) the date of
Borrowing (which shall be a Business Day) and (iv) whether the respective
Borrowing shall consist of Base Rate Loans or Eurodollar Loans. The
Administrative Agent shall promptly give each Bank written notice (or telephonic
notice promptly confirmed in writing) of each proposed Borrowing, of the portion
thereof to be funded by such Bank and of the other matters covered by the Notice
of Borrowing.
(b) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by it in good faith
to be from an Authorized Officer of the Borrower. In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent's record of
the terms of such telephonic notice absent manifest error.
1.04 Disbursement of Funds. (a) No later than 11:00 A.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank will
make available its pro rata share, if any, of such Borrowing requested to be
made on such date. All such amounts shall be made available to the
Administrative Agent in the relevant Approved Currency and immediately available
funds at the Payment Office and the Administrative Agent will make available to
the Borrower by depositing to the account designated by the Borrower, which
account shall be at an institution in the same city as the respective Payment
Office, the aggregate of the amounts so made available in the type of funds
received. Unless the Administrative Agent shall have been notified by any Bank
participating in a Borrowing prior to the date of such Borrowing that such Bank
does not intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative Agent
on such date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Bank
and the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower in writing or by telephone (promptly confirmed in
writing), and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such Bank, the
overnight Federal Funds Effective Rate or (y) if paid by the Borrower, the then
applicable rate of interest, calculated in accordance with Section 1.08, for the
type of respective Loans which were required to be repaid.
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(b) Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 Register. (a) The Administrative Agent shall maintain a
register for the recordation of the Revolving Loan Commitments and the L/C
Commitments of the Banks from time to time and, after the Conversion Date has
occurred, the principal amount of the Term Loans owing to each Bank (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error. The Register shall be available for inspection
by the Borrower, the Account Party or any Bank at any reasonable time and from
time to time upon reasonable prior notice.
(b) The Borrower hereby agrees to provide a Note, promptly
upon the request of any Bank, to the extent such Bank has requested such Note in
connection with any pledge or assignment by such Bank of any or all of its Loans
hereunder to a Federal Reserve Bank.
1.06 Conversions. The Borrower shall have the option to
convert on any Business Day occurring on or after the Restatement Effective Date
all or a portion at least equal to the applicable Minimum Borrowing Amount of
its outstanding Loans denominated in a single Approved Currency and constituting
Base Rate Loans or Eurodollar Loans into a Borrowing or Borrowings of Loans
denominated in such Approved Currency and constituting Eurodollar Loans or Base
Rate Loans, respectively, provided that (i) Eurodollar Loans denominated in a
currency other than Dollars may not be converted into Base Rate Loans, (ii) no
partial conversion shall reduce the outstanding principal amount of the
Eurodollar Loans made pursuant to a Borrowing to less than the Minimum Borrowing
Amount applicable thereto, (iii) Base Rate Loans may not be converted into
Eurodollar Loans when a Default or Event of Default is then in existence if the
Administrative Agent or the Required Banks shall have determined in its or their
sole discretion not to permit such conversion and (iv) Borrowings of Eurodollar
Loans resulting from this Section 1.06 shall be limited in number as provided in
Section 1.02. Each such conversion shall be effected by the Borrower giving the
Administrative Agent at the Notice Office, prior to 11:00 A.M. (New York time),
at least three Business Days' (or one Business Day in the case of a conversion
into Base Rate Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each, a "Notice of Conversion") specifying the Loans to
be so converted, the Type of Loans (as to interest option) to be converted into
and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Bank prompt notice of any such proposed conversion affecting any of its
Loans.
1.07 Pro Rata Borrowings. All Revolving Loans under the Credit
Agreement shall be made by the Banks pro rata on the basis of their Revolving
Loan Commitments. It is understood that no Bank shall be responsible for any
default by any other Bank in its obligation to make Loans hereunder and that
each Bank shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
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1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be equal
to the Applicable Margin then in effect for Base Rate Loans plus the Base Rate
in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such Eurodollar Loan or
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, at a rate per annum which shall at all times be equal to the
Applicable Margin then in effect for Eurodollar Loans plus the relevant LIBOR
for the Interest Period applicable to such Eurodollar Loan.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the Base Rate in
effect from time to time plus the sum of (i) 2% and (ii) the Applicable Margin
then in effect for Base Rate Loans; provided that Eurodollar Loans shall bear
interest after maturity (whether by acceleration or otherwise) until the end of
the applicable Interest Period at a rate per annum equal to 2% in excess of the
rate of interest then applicable thereto.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each calendar quarter, (ii) in respect of each Eurodollar Loan,
the last day of each Interest Period applicable thereto and, in the case of an
Interest Period of six months, on the date occurring three months after the
first day of such Interest Period and (iii) in respect of each Loan, on any
conversion or prepayment (on the amount so converted or prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made
in accordance with Section 13.07(a) and (b).
(f) The Administrative Agent, upon determining the interest
rate for any Borrowing of Eurodollar Loans for any Interest Period, shall
promptly notify the Borrower and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 11:00 A.M. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period to be applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six month period. Notwithstanding anything to the contrary contained above:
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(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period
expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) no Interest Period may be elected at any time when a
Default or Event of Default is then in existence if the Administrative
Agent or the Required Banks shall have determined in its or their sole
discretion not to permit such Interest Period;
(v) no Interest Period shall extend beyond the Term Loan
Maturity Date; and
(vi) no Interest Period with respect to any Borrowing of Term
Loans may be elected that would extend beyond any date upon which a
mandatory repayment of Term Loans is required to be made under Section
4.02(i)(a) if, after giving effect to the selection of such Interest
Period, the aggregate principal amount of Term Loans maintained as
Eurodollar Loans with Interest Periods ending after such date would
exceed the aggregate principal amount of Term Loans permitted to be
outstanding after such mandatory repayment.
If upon the expiration of any Interest Period, the Borrower has failed, or is
not permitted, to elect a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to
have elected to convert such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current Interest Period; provided
that if such Eurodollar Loans are denominated in a currency other than Dollars,
then such Eurodollar Loans shall not convert to Base Rate Loans but shall
instead be prepaid by the Borrower on the last day of such Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) or (iv) below, the Administrative Agent or (y) in
the case of clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto, provided that such determination has been made in good
faith):
(i) on any date for determining any LIBOR for any Interest
Period, that, by reason of any changes arising after the Restatement
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of the respective LIBOR; or
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(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Loans (other than any increased cost or reduction in
the amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) because of (x) any
change since the Restatement Effective Date in any applicable law,
governmental rule, regulation, guideline, order or request (whether or
not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (such as,
for example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the
respective LIBOR) and/or (y) other circumstances materially affecting
the interbank Eurodollar market generally; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful due to the compliance by such Bank
in good faith with any change since the Restatement Effective Date in
any law, governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Bank
customarily complies, or has become impracticable as a result of a
contingency occurring after the Restatement Effective Date which
materially adversely affects the interbank Eurodollar market; or
(iv) at any time that any Alternate Currency is not available in
sufficient amounts, as determined in good faith by the Administrative
Agent, to fund any Borrowing of Loans denominated in such Alternate
Currency;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) or (iv) above) shall (x) on such date and (y) within 10 Business
Days of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and, except in the case of clauses (i) and
(iv) above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (w) in the case of clause (i) above, Eurodollar Loans, priced in
respect of the affected LIBOR, shall no longer be available until such time as
the Administrative Agent notifies the Borrower and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower or, in the case of a Notice of Borrowing,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing for Base Rate Loans to be made on the date of Borrowing contained in
such Notice of Borrowing, (x) in the case of clause (ii) above, the Borrower
shall pay to such Bank, within 10 days of its receipt of written demand
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Bank shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing the basis for the calculation
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thereof, which basis shall be reasonable and consistently applied, submitted to
the Borrower by such Bank shall, absent manifest error, be final and conclusive
and binding upon all parties hereto), (y) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 1.10(b) as promptly
as possible and, in any event, within the time period required by applicable law
and (z) in the case of clause (iv) above, Loans in the affected Alternate
Currency shall no longer be available until such time as the Administrative
Agent notifies the Borrower and the Banks that the circumstances giving rise to
such notice by the Administrative Agent no longer exist in accordance with
clause (y) of the preceding sentence, and any Notice of Borrowing or Notice of
Conversion given by a Borrower with respect to such Alternate Currency Loans
which have not yet been incurred shall be deemed rescinded by the Borrower.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified in writing by a Bank pursuant to Section 1.10(a)(ii) or (iii), cancel
said Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Base Rate Loans or require the affected Bank to make its requested
Loan as a Base Rate Loan, or (ii) if the affected Eurodollar Loan is then
outstanding, upon at least three Business Days' notice to the Administrative
Agent, (A) in the case of a Eurodollar Loan denominated in Dollars, require the
affected Bank to convert each such Eurodollar Loan into a Base Rate Loan, and
(B) in the case of a Eurodollar Loan denominated in an Alternate Currency, repay
all such Eurodollar Loans in full, provided that if more than one Bank is
affected at any time, then all affected Banks must be treated in the same manner
pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the
Restatement Effective Date the adoption or effectiveness of any applicable law,
rule or regulation regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged by law with the
interpretation or administration thereof, or compliance by such Bank or its
parent corporation with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, in each case made subsequent to the
Restatement Effective Date, has or would have the effect of reducing the rate of
return on such Bank's or its parent corporation's capital or assets as a
consequence of such Bank's commitments or obligations hereunder to a level below
that which such Bank or its parent corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Bank's or its parent corporation's policies with respect to capital adequacy),
then from time to time, the Borrower shall within 10 days of its receipt of
written demand by such Bank (with a copy to the Administrative Agent), pay to
such Bank such additional amount or amounts as will compensate such Bank or its
parent corporation for such reduction. Each Bank, upon determining in good faith
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the Borrower, which notice shall set
forth in reasonable detail the basis of the calculation of such additional
amounts, which basis must be reasonable and consistently applied, although the
failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(c) upon the subsequent receipt of such notice.
-8-
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable 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 Bank to fund its Eurodollar Loans but excluding any loss of anticipated
profit with respect to such Loans) which such Bank may sustain: (i) if for any
reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any
repayment, prepayment or conversion of any of its Eurodollar Loans occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other failure by the Borrower to repay its Loans when
required by the terms of this Credit Agreement or (y) an election made pursuant
to Section 1.10(b). Calculation of all amounts payable to a Bank under this
Section 1.11 shall be made as though that Bank had actually funded its relevant
Eurodollar Loan through the purchase of a Eurodollar deposit bearing interest at
the relevant LIBOR in an amount equal to the amount of that Loan, having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of that Bank or other bank to a
domestic office of that Bank in the United States of America; provided, however,
that each Bank may fund each of its Eurodollar Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii) or Section 4.04 with respect to such Bank, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for any Loans affected by such
event; provided that such designation is made on such terms that, in the opinion
of such Bank, such Bank and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Bank provided in Section 1.10 or 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank or (y) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the other Banks,
the Borrower shall have the right, if no Default or Event of Default then
exists, to replace such Bank (the "Replaced Bank") with one or more other banks
or financial institutions, none of whom shall constitute a Defaulting Bank at
the time of such replacement (collectively, the "Replacement Bank") reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Bank shall enter into
one or more Assignment and Assumption Agreements pursuant to Section 13.04(b)
(and with all fees payable pursuant to said Section 13.04(b) to be paid by the
-9-
Replacement Bank) pursuant to which the Replacement Bank shall acquire all of
the Revolving Loan Commitments (if prior to the Conversion Date) and all of the
L/C Commitments and all of the outstanding Loans of the Replaced Bank and, in
connection therewith, shall pay to the Replaced Bank in respect thereof an
amount equal to (A) the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Bank plus (B) all accrued, but theretofore
unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01, and (ii) all
obligations (including, without limitation, all such amounts, if any, due and
owing under Section 1.11) of the Borrower due and owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreement, the payment of
amounts referred to in clauses (i) and (ii) above, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this Credit
Agreement (including, without limitation, Sections 1.10, 1.11, 4.04, 11.07 and
13.01), which shall survive as to such Replaced Bank.
SECTION 2. Letter of Credit Facility.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Account Party may request the Issuing Agent at
any time and from time to time on or after the Restatement Effective Date and on
or prior to the L/C Issuance Expiration Date to issue, for the benefit of
Lloyd's and in support of, on a standby basis, L/C Supportable Obligations, and
subject to and upon the terms and conditions herein set forth the Issuing Agent
agrees to issue at any time and from time to time on or after the Restatement
Effective Date and on or prior to the L/C Issuance Expiration Date, one or more
irrevocable standby letters of credit in the form of Exhibit B (each such letter
of credit, a "Letter of Credit" and, collectively, the "Letters of Credit").
Notwithstanding the foregoing, the Issuing Agent shall be under no obligation to
issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain the
Issuing Agent or any L/C Bank from issuing such Letter of Credit or any
requirement of law applicable to the Issuing Agent or any L/C Bank or
any request or directive (whether or not having the force of law) from
any governmental authority with jurisdiction over the Issuing Agent or
any L/C Bank shall prohibit, or request that the Issuing Agent or any
L/C Bank refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon the Issuing
Agent or any L/C Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing
Agent or any L/C Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was
not applicable, in effect or known to the Issuing Agent or any L/C Bank
as of the date hereof and which the Issuing Agent or any L/C Bank in
good xxxxx xxxxx material to it; or
(ii) the conditions precedent set forth in Section 5 are not
satisfied at that time.
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(b) Each Letter of Credit will be issued by the Issuing Agent
on behalf of the L/C Banks, and each L/C Bank will participate in each Letter of
Credit pro rata in accordance with its L/C Percentage. The obligations of each
L/C Bank under and in respect of each Letter of Credit are several, and the
failure by any L/C Bank to perform its obligations hereunder or under any Letter
of Credit shall not affect the obligations of the Account Party toward any other
party hereto nor shall any other such party be liable for the failure by such
L/C Bank to perform its obligations hereunder or under any Letter of Credit.
(c) Notwithstanding the foregoing, (i) the aggregate Stated
Amount of each Letter of Credit shall not exceed an amount which, when added to
the Letter of Credit Outstandings at the time of issuance thereof, equals the
Total L/C Commitment at the time of issuance thereof; (ii) no L/C Bank's L/C
Exposure shall exceed such L/C Bank's L/C Commitment at the time of issuance of
any Letter of Credit (and after giving effect to such issuance); (iii) each
Letter of Credit (x) issued after the Restatement Effective Date and prior to
the Lloyd's Coming in Line Date occurring in November, 2000 shall have an
initial expiration date of December 31, 2004 and (y) issued thereafter but prior
to the Lloyd's Coming in Line Date occurring in November, 2001 (to the extent
permitted to be issued hereunder) shall have an initial expiration date of
December 31, 2005; (iv) each Letter of Credit may be denominated in any Approved
Currency as determined by the Account Party at the time of issuance, and payable
on a sight basis; and (v) the Issuing Agent will not issue any Letter of Credit
after it has received notice from the Account Party or the Required Banks
stating that any condition precedent set forth in Section 5 is not satisfied at
that time until the Issuing Agent shall have received a written notice of (x)
rescission of such notice from the party or parties originally delivering the
same or (y) a waiver of such condition precedent by the Required Banks.
(d) Subject to and on the terms and conditions set forth
herein, the Issuing Agent is hereby authorized by the Account Party and the L/C
Banks to arrange for the issuance of any Letter of Credit pursuant to Section
2.01(a) and the amendment of any Letter of Credit pursuant to Section 2.06
and/or 13.04(b) by:
(i) completing the commencement date and the expiry date of
such Letter of Credit;
(ii) (in the case of an amendment increasing or reducing the
amount thereof) amending such Letter of Credit in such manner as
Lloyd's may agree;
(iii) completing Schedule 1 to such Letter of Credit with
the participation of each L/C Bank as allocated pursuant to the terms
hereof; and
(iv) executing such Letter of Credit on behalf of each L/C Bank
and following such execution delivering such Letter of Credit to
Lloyd's.
(e) Each L/C Bank hereby makes, constitutes and appoints the
Issuing Agent its true and lawful attorney-in-fact, in its name, place and
stead, giving the Issuing Agent full power to issue, amend and take other action
with respect to each Letter of Credit as contemplated by this Credit Agreement.
-11-
2.02 Letter of Credit Request; Notices of Issuance. (a)
Whenever it desires a Letter of Credit to be issued, the Account Party shall
give the Issuing Agent written notice that it desires such Letter of Credit to
be issued, which written notice shall be in the form of Exhibit A-2 (the "Letter
of Credit Request"). The Letter of Credit Request shall include any other
documents as the Administrative Agent customarily requires in connection
therewith.
(b) Upon its issuance of or amendment to any Letter of Credit,
the Issuing Agent shall promptly notify the Account Party and the L/C Banks of
such issuance or amendment, which notice shall include a summary description of
the Letter of Credit actually issued and any amendments thereto.
2.03 Agreement to Repay Letter of Credit Payments. (a) The
Account Party hereby agrees to reimburse each L/C Bank, by making payment
directly to each L/C Bank in immediately available funds, for any payment or
disbursement made by such L/C Bank under any Letter of Credit (each such amount
so paid or disbursed until reimbursed, an "Unpaid Drawing") no later than one
Business Day following the date that the Borrower receives notice in writing or
by telephone (promptly confirmed in writing) from the Issuing Agent of such
payment or disbursement, with interest on the amount so paid or disbursed by
such L/C Bank to the extent not reimbursed prior to 1:00 P.M. (New York time) on
the date of such payment or disbursement, from and including the date paid or
disbursed to but not including the date that such L/C Bank is reimbursed
therefor at a rate per annum which shall be the Applicable Margin plus the Base
Rate as in effect from time to time (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date the Borrower receives notice
from such L/C Bank of such payment or disbursement), such interest also to be
payable on demand, provided that if a Default or an Event of Default under
Section 9.05 shall have occurred and be continuing, such Unpaid Drawings shall
be due and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby waived by the Account Party) and shall bear
interest at a rate per annum which shall be the Base Rate plus the Applicable
Margin (plus an additional 2% on and after the third Business Day following the
respective drawing).
(b) The Account Party's obligation under this Section 2.03 to
reimburse each L/C Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Account Party may have or have had against such L/C Bank or the
Issuing Agent, including, without limitation, any defense based upon the failure
of any drawing under any Letter of Credit to substantially conform to the terms
of such Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that the Account
Party shall not be obligated to reimburse any L/C Bank for any wrongful payment
made by such L/C Bank under a Letter of Credit issued by it as a result of acts
or omissions constituting willful misconduct or gross negligence on the part of
such L/C Bank.
-12-
2.04 Increased Costs. If after the Restatement Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any L/C Bank with any
request or directive (whether or not having the force of law) by any such
Governmental Authority, central bank or comparable agency shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against letters of credit issued by or participated in by
such L/C Bank, or (ii) impose on such L/C Bank any other conditions affecting
this Credit Agreement or any Letter of Credit and the result of any of the
foregoing is to increase the cost to such L/C Bank, or to reduce the amount of
any sum received or receivable by such L/C Bank, then from time to time, the
Account Party shall within 10 days of its receipt of written demand by such L/C
Bank (with a copy to the Administrative Agent) pay to such L/C Bank such
additional amounts as will compensate such L/C Bank for such cost or reduction.
Each L/C Bank, upon determining in good faith that any additional amounts will
be payable pursuant to this Section 2.04, will give prompt written notice
thereof to the Account Party, which notice shall set forth in reasonable detail
the basis of the calculation of such additional amounts, which basis must be
reasonable and consistently applied, although the failure to deliver any such
notice shall not release or diminish the Account Party's obligations to pay
additional amounts pursuant to this Section 2.04 upon subsequent receipt of such
notice.
2.05 Letter of Credit Expiration Extensions. (a) Each L/C Bank
acknowledges that in accordance with the terms of each Letter of Credit the
expiration date of such Letter of Credit will be automatically extended for an
additional year, without written amendment, unless, at least 30 days prior to
December 31 of each year (commencing with December 31, 2000), notice is given by
the Issuing Agent in accordance with the terms of the respective Letter of
Credit (a "Notice of Non-Extension") that the Letter of Credit will not be
extended beyond its current expiration date.
(b) In connection with the first possible extension of Letters
of Credit (occurring in the year 2000), the Issuing Agent shall not give a
Notice of Non-Extension in respect of any Letter of Credit unless a Default or
Event of Default exists at such time, in which case the Issuing Agent may, and
if requested by the Required Banks will, give a Notice of Non-Extension to
Lloyd's in respect of each Letter of Credit no later than December 1, 2000. In
connection with any subsequent possible extension of the Letters of Credit, the
Issuing Agent may, and if requested by any L/C Bank (which request any L/C Bank
may make in its sole discretion) the Issuing Agent will, give a Notice of
Non-Extension to Lloyd's in respect of each Letter of Credit no later than
December 1st of such year.
(c) Each L/C Bank agrees that on or prior to the date
occurring 90 days prior to the Lloyd's Coming in Line Date occurring in
November, 2001, such L/C Bank will notify the Borrower as to whether such L/C
Bank intends to request the Issuing Agent to deliver Notices of Non-Extension in
respect of then outstanding Letters of Credit in accordance with the last
sentence of Section 2.05(b) above, provided that the failure of any L/C Bank to
give such notice to the Account Party shall not preclude such L/C Bank from
subsequently delivering such request to the Issuing Agent or the Issuing Agent
from giving any such Notices of Non-Extension to Lloyd's.
2.06 Changes to Stated Amount. At any time when any Letter of
Credit is outstanding, at the request of the Account Party, the Issuing Agent
will enter into an amendment increasing or reducing the Stated Amount of such
Letter of Credit, provided that (i) in no event shall the Stated Amount of such
Letter of Credit be increased to an amount which, when added to the Letter of
Credit Outstandings at such time, exceeds the Total L/C Commitment at such time,
(ii) the Stated Amount of a Letter of Credit may not be increased at any time if
the conditions precedent set forth in Section 5.02 are not satisfied at such
time, and (iii) the Stated Amount of a Letter of Credit may not be increased at
any time after the L/C Issuance Expiration Date.
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2.07 Representations and Warranties of L/C Banks. Each L/C
Bank represents and warrants that each Letter of Credit constitutes a legal,
valid and binding obligation of such L/C Bank enforceable in accordance with its
terms.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower shall pay a commitment fee (the
"RL Commitment Fee") to the Administrative Agent for distribution to each
Non-Defaulting Bank for the period from the Restatement Effective Date to but
not including the earlier of (A) the date the Total Revolving Loan Commitment
has been terminated and (B) the Conversion Date, computed at a rate per annum
for each day equal to the Applicable Commitment Fee Percentage then in effect on
the daily Unutilized Revolving Loan Commitment of such Bank. Accrued RL
Commitment Fees shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter and the earlier of the date the Total
Revolving Loan Commitment has been terminated and the Conversion Date.
(b) The Account Party shall pay a commitment fee (the "L/C
Commitment Fee") to the Administrative Agent for distribution to each
Non-Defaulting Bank for the period from the Restatement Effective Date to but
not including the date that such Bank's L/C Commitment has been terminated,
computed at a rate per annum for each day equal to the Applicable Commitment Fee
Percentage then in effect on the daily Unutilized L/C Commitment of such Bank.
Accrued L/C Commitment Fees shall be due and payable quarterly in arrears on the
last Business Day of each calendar quarter and the date the Total L/C Commitment
has been terminated.
(c) The Account Party shall pay a letter of credit fee (the
"Letter of Credit Fee") to the Administrative Agent for distribution to each
Non-Defaulting Bank with an L/C Commitment for the period from the date of
issuance of the initial Letter of Credit to but not including the date that such
Bank's L/C Commitment has been terminated, computed at a rate for each day equal
to the Applicable Margin then in effect for Eurodollar Loans on the daily L/C
Exposure of such Bank (provided that for purposes of this Section 3.01(c) only,
each L/C Bank's L/C Exposure shall be no less than such L/C Bank's L/C
Percentage of $150,000,000). Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
and the date the Total L/C Commitment has been terminated.
(d) The Account Party hereby agrees to pay to the Issuing
Agent upon each issuance of, payment under, and/or amendment of, any Letter of
Credit such amount as shall at the time of such issuance, payment or amendment
be the administrative charge which the Issuing Agent is customarily charging for
issuances of, payments under or amendments of, letters of credit issued by it.
-14-
(e) The Borrower and the Account Party shall pay to the
Administrative Agent, for its own account, such fees as may be agreed to from
time to time in writing between the Borrower and the Administrative Agent or the
Account Party and the Administrative Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 14.07(b).
3.02 Voluntary Reduction of Commitments. (a) At any time prior
to the Conversion Date, upon at least three Business Days' prior written notice
to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, at any time or from time to time, without premium or
penalty, to terminate or reduce the Total Unutilized Revolving Loan Commitment,
in whole or in part, pursuant to this Section 3.02(a), in an integral multiple
of $5,000,000, in the case of partial reductions to the Total Unutilized
Revolving Loan Commitment, provided that each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each
Bank.
(b) At any time, upon at least three Business Days' prior
written notice to the Administrative Agent at the Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks), the
Account Party shall have the right, at any time or from time to time, without
premium or penalty, to terminate or reduce the Total Unutilized L/C Commitment,
in whole or in part, pursuant to this Section 3.02(b), in an integral multiple
of $5,000,000, in the case of partial reductions to the Total Unutilized L/C
Commitment, provided that each such reduction shall apply proportionately to
permanently reduce the L/C Commitment of each Bank.
3.03 Mandatory Reductions of Commitments. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety at 9:00 a.m. (New York time) on the Conversion Date
(after giving effect to the conversion of outstanding Revolving Loans into Term
Loans at such time).
(b) The Total L/C Commitment (and the L/C Commitment of each
Bank) shall terminate on the later of (i) the L/C Maturity Date and (ii) the
date on which no Letters of Credit are outstanding and no Unpaid Drawings exist.
(c) On each date upon which a mandatory repayment of Revolving
Loans pursuant to Section 4.02(i)(c) or (d) is required or would be required if
(x) an unlimited amount of Revolving Loans were then outstanding and (y) the
conditions precedent to borrowing set forth in Section 5.02 are not satisfied at
such time, the Total Revolving Loan Commitment shall be permanently reduced by
the amount required to be applied pursuant to said Section (determined as if an
unlimited amount of Revolving Loans were actually outstanding); provided, that
except to the extent resulting from a mandatory prepayment of Revolving Loans
pursuant to Section 4.02(i)(d) with the portion of net cash proceeds of
Indebtedness incurred under Section 4.04(h) of the Holdings Guaranty exceeding
$150,000,000 (i) no mandatory reduction of the Total Revolving Loan Commitment
shall be required pursuant to this Section 3.03(c) at any time if Holdings'
senior unsecured debt rating from S&P is BBB+ or greater at such time, and (ii)
in no event shall the Total Revolving Loan Commitment be reduced below
$100,000,000 as a result of the operation of this Section 3.03(c).
-15-
(d) Each reduction or adjustment of the Total Revolving Loan
Commitment pursuant to this Section 3.03 shall apply proportionately to the
Revolving Loan Commitment of each Bank with such a Commitment.
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Loans, without premium or penalty (except for amounts payable pursuant
to Section 1.11), in whole or in part, from time to time on the following terms
and conditions: (i) the Borrower shall give the Administrative Agent at its
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans are Term Loans or
Revolving Loans, the amount of such prepayment and (in the case of Eurodollar
Loans) the specific Borrowing(s) pursuant to which such prepayment is made,
which notice shall be received by the Administrative Agent (x) in the case of
Base Rate Loans, no later than 11:00 A.M. (New York time) one Business Day prior
to the date of such prepayment, or (y) in the case of Eurodollar Loans, three
Business Days prior to the date of such prepayment, which notice shall promptly
be transmitted by the Administrative Agent to each of the Banks; (ii) each
partial prepayment of any Borrowing shall be in an aggregate Principal Amount of
at least $1,000,000, provided that no partial prepayment of Eurodollar Loans
made pursuant to a Borrowing shall reduce the aggregate principal amount of the
Loans outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount; (iii) each prepayment in respect of any Loans made pursuant to
a Borrowing shall be applied pro rata among such Loans; and (iv) each prepayment
of Term Loans pursuant to this Section 4.01 shall reduce the then remaining
Scheduled Repayments on a pro rata basis (based upon the then remaining
principal amount of each such Scheduled Repayment).
4.02 Mandatory Repayments and Prepayments.
------------------------------------
(i) Requirements:
(a) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each date set forth below, the Borrower shall be required
to repay the principal amount of Term Loans in an amount equal to the product of
(x) the aggregate Principal Amount of Revolving Loans converted to Term Loans on
the Conversion Date pursuant to Section 1.01(b) hereof multiplied by (y) the
percentage set forth below opposite such date (each such repayment, as the same
may be reduced pursuant to Sections 4.01 and/or 4.02(ii)(a), a "Scheduled
Repayment"):
Scheduled Repayment Date Percentage
------------------------ ----------
June 30, 2002 10.0%
December 31, 2002 12.5%
June 30, 2003 12.5%
December 31, 2003 15.0%
June 30, 2004 15.0%
December 31, 2004 17.5%
Term Loan Maturity Date 17.5%
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(b) In addition to any other mandatory repayments pursuant to
this Section 4.02, not later than the third Business Day following the date of
the receipt thereof by Holdings and/or any of its Subsidiaries, the Borrower
shall be required to repay an amount equal to 100% of the cash proceeds (net of
underwriting discounts and commissions and other reasonable fees and costs
associated therewith) of the sale or issuance of equity by, or cash capital
contributions to, Holdings or any Subsidiary of Holdings (other than (i) any
issuance of common stock or options to purchase common stock by Holdings to the
extent issued to the employees or agents of Holdings or its Subsidiaries, (ii)
issuances of common stock pursuant to warrants outstanding on the Restatement
Effective Date, (iii) issuances of preferred stock of Holdings pursuant to the
terms of the Cat E Put Securities and (iv) issuances of stock by Subsidiaries of
Holdings to Holdings or to Wholly-Owned Subsidiaries of Holdings, and capital
contributions by Holdings to its Subsidiaries), which shall be applied (i) if
prior to the Conversion Date, to repay the aggregate Principal Amount of
Revolving Loans, and (ii) if the Conversion Date has occurred, to repay the
aggregate Principal Amount of the Term Loans.
(c) In addition to any other mandatory repayments pursuant to
this Section 4.02, not later than the fifth Business Day following the date of
receipt thereof by Holdings and/or any of its Subsidiaries of the proceeds of
any Asset Sale, the Borrower shall be required to repay an amount equal to 100%
of the Net Available Proceeds of such Asset Sale, which shall be applied (i) if
prior to the Conversion Date (but only to the extent that the conditions
precedent to borrowing set forth in Section 5.02 are not satisfied at such
time), to repay the Principal Amount of Revolving Loans and (ii) if the
Conversion Date has occurred, to repay the aggregate Principal Amount of the
Term Loans; provided that (A) if the Net Available Proceeds of any such Asset
Sale are less than $5,000,000, such Net Available Proceeds shall not be required
to be so applied until such time as such Net Available Proceeds, when combined
with the Net Available Proceeds from additional subsequent Asset Sales, exceed
$5,000,000, at which time all such Net Available Proceeds shall be required to
be applied pursuant to this Section 4.02(i)(c), and (B) the Net Available
Proceeds from Asset Sales shall not be required to be so applied on such date
(i) to the extent that no Default or Event of Default then exists and the
Borrower delivers a certificate to the Administrative Agent on or prior to such
date stating that such Net Available Proceeds shall within 180 days following
the date of such Asset Sale be used to purchase assets used, or to be used, in
the business described in Section 8.01 (including, without limitation, the
equity interest of a Person engaged in any such business), which certificate
shall set forth the estimate of the proceeds to be so expended, it being
understood that (1) if all or any portion of such Net Available Proceeds not so
applied are not so used (or contractually committed to be used) within such 180
day period, such remaining portion shall be applied on the last day of such
period as provided above in this Section 4.02(i)(c) (without regard to the
proviso herein) and (2) if all or any portion of such Net Available Proceeds are
not required to be applied on the 180th day referred to in clause (1) above
because such amount is contractually committed to be used and subsequent to such
date such contract is terminated or expires without such portion being so used,
then such remaining portion shall be applied on the date of such termination or
expiration as provided in this Section 4.02(i)(c) (without regard to the proviso
herein).
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(d) In addition to any other mandatory repayments pursuant to
this Section 4.02, not later than the third Business Day following the date of
the receipt thereof by Holdings and/or any of its Subsidiaries, the Borrower
shall be required to repay an amount equal to 100% of the cash proceeds (net of
underwriting discounts and commissions and other reasonable fees and costs
associated therewith) of the incurrence of Indebtedness for borrowed money or
evidenced by bonds, notes, debentures or similar instruments by Holdings and/or
any of its Subsidiaries (other than Indebtedness permitted by Section 4.04 of
the Holdings Guaranty as such Section 4.04 is in effect on the Restatement
Effective Date, provided that notwithstanding the foregoing the net cash
proceeds of Indebtedness incurred under Section 4.04(h) of the Holdings Guaranty
shall be required to be applied pursuant to this Section 4.02(i)(d)), which
shall be applied (i) if prior to the Conversion Date (but only to the extent
that the conditions precedent to borrowing set forth in Section 5.02 are not
satisfied at such time), to repay the aggregate Principal Amount of Revolving
Loans and (ii) if the Conversion Date has occurred, to repay the aggregate
Principal Amount of the Term Loans.
(e) If on any date the aggregate outstanding Principal Amount
of Revolving Loans (after giving effect to all other repayments thereof on such
date) exceeds the Total Revolving Loan Commitment as then in effect (including,
without limitation, as a result of the determination of Dollar Equivalents
pursuant to Section 13.07(c)), the Borrower shall repay on such date the
principal of the Revolving Loans in an amount equal to such excess.
(f) If on any date the Letter of Credit Outstandings exceed
the Total L/C Commitment (including, without limitation, as a result of the
determination of Dollar Equivalents pursuant to Section 13.07(c)), the Account
Party agrees to pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to such excess and the Administrative Agent shall hold such
payment as security for the obligations of the Account Party hereunder pursuant
to a cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative Agent until
the proceeds are applied to the secured obligations).
(g) Notwithstanding anything to the contrary contained in this
Credit Agreement or in any other Credit Document, all then outstanding Term
Loans shall be repaid in full on the Term Loan Maturity Date.
(ii) Application:
(a) Each mandatory prepayment of Term Loans pursuant to
Section 4.02(i)(b), (c) or (d) shall be applied to reduce the then remaining
Scheduled Repayments on a pro rata basis (based upon the then remaining
principal amount of each such Scheduled Repayment).
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(b) With respect to each prepayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) pursuant to which made; provided that (i)
the Borrower shall first so designate all Base Rate Loans and Eurodollar Loans
with Interest Periods ending on the date of repayment prior to designating any
other Eurodollar Loans; (ii) if any prepayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount, such Borrowing
shall be immediately converted into Base Rate Loans; and (iii) each prepayment
of any Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11. Notwithstanding the foregoing
provisions of this Section 4.02, if at any time the mandatory prepayment of
Loans pursuant to Section 4.02(i)(b), (c) or (d) would result, after giving
effect to the first sentence of this clause (b), in the Borrower incurring
breakage costs under Section 1.11 as a result of Eurodollar Loans being repaid
other than on the last day of an Interest Period applicable thereto (the
"Affected Eurodollar Loans"), then the Borrower may, if it so elects by notice
to the Administrative Agent, deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Eurodollar Loans with
the Administrative Agent to be held pursuant to an escrow agreement to be
entered into in form and substance satisfactory to the Administrative Agent,
with such escrowed amounts to be released from such escrow (and applied to repay
the principal amount of such Loans) upon each occurrence thereafter of the last
day of an Interest Period applicable to the relevant Eurodollar Loans (or such
earlier date or dates as shall be requested by the Borrower), with the amount to
be so released and applied on the last day of each Interest Period to be the
amount of the Loans to which such Interest Period applies (or, if less, the
amount remaining in such escrow account).
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Credit Agreement shall be
made to the Administrative Agent for the ratable account of the Banks entitled
thereto, not later than 12:00 Noon (New York time) on the date when due and
shall be made in immediately available funds at the Payment Office in (x)
Dollars, if such payment is made in respect of any obligation of the Borrower or
the Account Party, as applicable, under this Credit Agreement except as provided
in the immediately succeeding clause (y), and (y) the appropriate Alternate
Currency, if such payment is made by the Borrower in respect of principal of or
interest on Alternate Currency Loans or if such payment is made by the Account
Party in respect of any Unpaid Drawing (or interest thereon) with respect to an
Alternate Currency Letter of Credit, it being understood that written or
facsimile notice by the Borrower or the Account Party, as applicable, to the
Administrative Agent to make a payment from the funds in the Borrower's or the
Account Party's account, as applicable, at the Payment Office shall constitute
the making of such payment to the extent of such funds held in such account. Any
payments under this Credit Agreement which are made later than 12:00 Noon (New
York time) shall be deemed to have been made on the next succeeding Business
Day. Whenever any payment to be made hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension period at the applicable rate in
effect immediately prior to such extension.
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4.04 Net Payments. (a) All payments made by the Borrower or
the Account Party hereunder or by the Borrower under any Note will be made
without setoff, counterclaim or other defense. Except as provided in Section
4.04(b), all such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
net profits of a Bank pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of such Bank is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower or the Account Party, as applicable, agrees to
pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Credit Agreement
or under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such Note. If
any amounts are payable in respect of Taxes pursuant to the preceding sentence,
the Borrower or the Account Party, as applicable, agrees to reimburse each Bank,
upon the written request of such Bank, for taxes imposed on or measured by the
net income or net profits of such Bank pursuant to the laws of the jurisdiction
in which such Bank is organized or in which the principal office or applicable
lending office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Bank is
organized or in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank, in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence. The
Borrower or the Account Party, as applicable, will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts, evidencing such payment by the
Borrower or the Account Party, as applicable. Without duplication of amounts
payable pursuant to the foregoing provisions of this Section 4.04(a), each of
the Borrower and the Account Party agrees to indemnify and hold harmless each
Bank, and reimburse such Bank upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower, the Account Party and the
Administrative Agent on or prior to the Restatement Effective Date, or in the
case of a Bank that is an assignee or transferee of an interest under this
Credit Agreement pursuant to Section 13.04(b) (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer to such Bank, (i) two accurate and
complete original signed copies of Internal Revenue Service Form W-8ECI or Form
W-8BEN (with respect to a complete exemption under an income tax treaty) (or
successor forms) certifying to such Bank's entitlement as of such date to a
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complete exemption from United States withholding tax with respect to payments
to be made under this Credit Agreement and under any Note, or (ii) if the Bank
is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and
cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) pursuant to clause
(i) above, (x) a certificate substantially in the form of Exhibit E (any such
certificate, a "Section 4.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (with
respect to the portfolio interest exemption) (or successor form) certifying to
such Bank's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Credit Agreement and under any Note. In addition, each Bank agrees that
from time to time after the Restatement Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower, the Account
Party and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty), or Form W-8BEN (with respect to
the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Credit Agreement and any Note, or it shall immediately notify the Borrower, the
Account Party and the Administrative Agent of its inability to deliver any such
Form or Certificate, in which case such Bank shall not be required to deliver
any such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to Section
14.04(b) and the immediately succeeding sentence, (x) the Borrower and the
Account Party shall be entitled, to the extent it is required to do so by law,
to deduct or withhold income or similar taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower or the Account Party U.S. Internal Revenue Service
Forms that establish a complete exemption from such deduction or withholding and
(y) neither the Borrower nor the Account Party shall be obligated pursuant to
Section 4.04(a) hereof to gross-up payments to be made to a Bank in respect of
income or similar taxes imposed by the United States if (I) such Bank has not
provided to the Borrower or the Account Party the Internal Revenue Service Forms
required to be provided to the Borrower and the Account Party pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes.
SECTION 5. Conditions Precedent. The occurrence of the
Restatement Effective Date pursuant to Section 13.10 and the obligation of each
Bank to make Revolving Loans to the Borrower hereunder and the obligation of the
Issuing Agent to issue or increase the Stated Amount of any Letter of Credit
hereunder, is subject, on the Restatement Effective Date or at the time of each
such Credit Event (except as otherwise hereinafter indicated), to the
satisfaction of each of the following conditions:
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5.01 Execution of Agreement. On or prior to the Restatement
Effective Date, this Credit Agreement shall have been executed and delivered as
provided in Section 13.10.
5.02 No Default; Representations and Warranties. At the time
of each Credit Event and also after giving effect thereto, (i) there shall exist
no Default or Event of Default and (ii) all representations and warranties of
each Credit Party contained herein or in the other Credit Documents shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
5.03 Officer's Certificate. On the Restatement Effective Date,
the Administrative Agent shall have received an officer's certificate from each
of Holdings, the Borrower and the Account Party dated such date, signed by an
Authorized Officer of each of Holdings, the Borrower and the Account Party,
respectively, stating that all of the applicable conditions set forth in
Sections 5.02, 5.06, 5.07, 5.09 and 5.13 exist as of such date.
5.04 Opinions of Counsel. On the Restatement Effective Date,
the Administrative Agent shall have received an opinion, in form and substance
reasonably satisfactory to the Administrative Agent, addressed to each of the
Banks and dated the Restatement Effective Date, from (i) Xxxxxxx, Xxxxxxxx &
Xxxxx, Bermuda counsel to Holdings, which opinion shall cover the matters
contained in Exhibit C-1 with respect to Holdings, (ii) Xxxxxxx Xxxx & Xxxxxxx,
counsel to LaSalle Re Holdings which opinion shall cover matters contained in
Exhibit C-2 with respect to LaSalle Re Holdings, (iii) Xxxxx & XxXxxxxx, counsel
to the Borrower, which opinion shall cover the matters contained in Exhibit C-3,
(iv) Lovells, United Kingdom counsel to the Account Party, which opinion shall
cover the matters contained in Exhibit C-4, (v) Xxxx X. Del Col, General Counsel
of Holdings and the Borrower, which opinion shall cover the matters contained in
Exhibit C-5 and (vi) White & Case LLP, counsel to the Administrative Agent,
which opinion shall cover the matters contained in Exhibit C-6.
5.05 Corporate Proceedings. (a) On the Restatement Effective
Date, the Banks shall have received from each Credit Party an officer's
certificate, dated the Restatement Effective Date, signed by the President or
any Vice President of such Credit Party, and attested to by the Secretary or any
Assistant Secretary of such Credit Party, in the form of Exhibit D hereto with
appropriate insertions, together with (x) copies of the Certificate of
Incorporation and By-Laws (or equivalent organizational documents) of such
Credit Party and (y) the resolutions of such Credit Party and the other
documents referred to in such certificate, and the foregoing shall be reasonably
satisfactory to the Administrative Agent.
(b) All corporate, tax and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Credit Agreement, the other Credit Documents and the Transaction Documents
shall be reasonably satisfactory in form and substance to the Administrative
Agent, and the Administrative Agent shall have received all information and
copies of all certificates, documents and papers, including good standing
certificates and any other records of corporate proceedings and governmental
approvals, if any, which the Administrative Agent reasonably may have requested
in connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
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5.06 Adverse Change, etc. On the Restatement Effective Date,
the Administrative Agent shall not have become aware of any facts or conditions
not previously known or disclosed, whether occurring prior to or after the
Restatement Effective Date, and since December 31, 1999 nothing shall have
occurred, in either case which, when taken as a whole, the Administrative Agent
shall reasonably determine (i) has, or is reasonably likely to have, a material
adverse effect on the rights or remedies of the Banks or the Administrative
Agent under this Credit Agreement or any other Credit Document, or on the
ability of any Credit Party to perform its obligations hereunder or thereunder,
or (ii) has or is reasonably likely to have a Material Adverse Effect.
5.07 Litigation. On the Restatement Effective Date, no
actions, suits or proceedings shall be pending or, to the knowledge of any of
Holdings, the Borrower or the Account Party, threatened (i) with respect to this
Credit Agreement or any other Credit Document, the Transaction Documents or the
transactions contemplated hereby or thereby (including the LaSalle Business
Combination) or (ii) which either the Administrative Agent or the Required Banks
shall reasonably determine has, or is reasonably likely to have, (x) a Material
Adverse Effect or (y) a material adverse effect on the rights or remedies of the
Banks or the Administrative Agent hereunder or under any other Credit Document
or on the ability of any Credit Party to perform its obligations hereunder or
thereunder.
5.08 Subsidiary Guaranty. On the Restatement Effective Date,
each Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiary Guaranty in the form of Exhibit F (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in full force
and effect.
5.09 Consummation of the LaSalle Business Combination. (a) On
or before the Restatement Effective Date, the LaSalle Business Combination shall
have been consummated in accordance with the LaSalle Business Combination
Documents, which LaSalle Business Combination Documents shall be in form and
substance reasonably satisfactory to the Administrative Agent, and all Legal
Requirements and each of the conditions precedent to the consummation of the
LaSalle Business Combination shall have been satisfied in all material respects
and not waived, except with the reasonable consent of the Administrative Agent,
to the reasonable satisfaction of the Administrative Agent.
(b) On or before the Restatement Effective Date, there shall
have been delivered to the Banks true and correct copies of all LaSalle Business
Combination Documents, and all of the material terms and conditions of such
LaSalle Business Combination Documents shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(c) On or before the Restatement Effective Date, all
commitments under the LaSalle Credit Agreement shall have been terminated and
all amounts owing thereunder shall have been paid in full.
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5.10 The Original Credit Agreement. On the Restatement
Effective Date and concurrently with the initial incurrence of Loans and
issuance of Letters of Credit hereunder, (i) all Original Loans shall have been
repaid in full in cash, together with accrued but unpaid interest thereon, and
all Original Letters of Credit shall have been returned to the Original Banks,
it being understood and agreed, however, that any Continuing Bank may net fund
any Loans required to be made by it on the Restatement Effective Date by
permitting the principal amount of the Original Loans made by such Continuing
Bank to remain outstanding on the Restatement Effective Date to satisfy such
Continuing Bank's obligation to fund a like principal amount of Loans to be
incurred hereunder by the Borrower on the Restatement Effective Date, and for
purposes of this Section 5.10 only such outstanding principal amount shall be
deemed outstanding as Revolving Loans under this Credit Agreement and such
corresponding Original Loans shall be deemed to have been so repaid in full, and
(ii) there shall have been paid in cash in full all accrued but unpaid Fees
under, and as defined in, the Original Credit Agreement (including, without
limitation, commitment fees, letter of credit fees and facing fees) accrued but
unpaid prior to but excluding the Restatement Effective Date and all other
amounts, costs and expenses (including, without limitation, breakage costs, if
any, with respect to eurodollar rate loans) then owing to any of the Original
Banks and/or the Administrative Agent, as agent under the Original Credit
Agreement, in each case to the satisfaction of the Administrative Agent or the
Original Banks, as the case may be, regardless of whether or not such amounts
would otherwise be due and payable at such time pursuant to the terms of the
Original Credit Agreement and (iii) all outstanding Notes (as defined in the
Original Credit Agreement) issued by Trenwick to the Original Banks under the
Original Credit Agreement shall be deemed canceled.
5.11 Financial Statements; Projections. Prior to the
Restatement Effective Date, each of Holdings, the Borrower and the Account Party
shall have delivered or caused to be delivered to the Administrative Agent with
copies for each Bank:
(a) the audited Annual Statement of each Regulated Insurance
Company which is a Material Subsidiary for the fiscal year ended
December 31, 1999, prepared in accordance with SAP and as filed with
the respective Applicable Insurance Regulatory Authority, which Annual
Statements shall be satisfactory in form and substance to the
Administrative Agent;
(b) the unaudited Quarterly Statement of each Regulated
Insurance Company which is a Material Subsidiary for the fiscal quarter
ended March 31, 2000, prepared in accordance with SAP and as filed with
the respective Applicable Insurance Regulatory Authority, which
Quarterly Statements shall be satisfactory in form and substance to the
Administrative Agent;
(c) the audited balance sheet of Trenwick and its Subsidiaries
(on a consolidated basis) for the fiscal year ended December 31, 1999,
and the related statements of income, of stockholders' equity and of
cash flows, in each case prepared in accordance with GAAP;
(d) the audited balance sheet of LaSalle Re Holdings and its
Subsidiaries (on a consolidated basis) for the fiscal year ended
September 30, 1999, and the related statements of income, of
stockholders' equity and of cash flows, in each case prepared in
accordance with GAAP;
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(e) the unaudited balance sheet of (i) Trenwick and its
Subsidiaries (on a consolidated basis) and (ii) LaSalle Re Holdings and
its Subsidiaries (on a consolidated basis), in each case for the fiscal
quarter ended March 31, 2000, and the related unaudited statements of
income, of stockholders' equity and of cash flows, in each case
prepared in accordance with GAAP;
(f) projected financial statements for Holdings and its
Subsidiaries, reflecting the projected financial condition, income and
expenses of Holdings and its Subsidiaries, after giving effect to the
Transaction and the other transactions contemplated hereby, which
projected financial statements shall be reasonably satisfactory in form
and substance to the Administrative Agent; and
(g) a pro forma balance sheet of Holdings and its Subsidiaries
as of March 31, 2000, after giving effect to the Transaction (as if the
Transaction had occurred prior to such date) and the other transactions
contemplated hereby.
5.12 Approvals, etc. On the Restatement Effective Date the
following approvals shall have been obtained to the satisfaction of the
Administrative Agent:
(i) all necessary and material governmental and third party
approvals, permits and licenses in connection with the Transaction and
this Credit Agreement and the transactions contemplated by the
Transaction Documents and otherwise referred to herein or therein
(including without limitation the LaSalle Business Combination), to the
extent such approvals, consents, permits and licenses are required to
be obtained or made prior to the Restatement Effective Date, shall have
been obtained and remain in full force and effect, and all applicable
waiting periods shall have expired, in each case without any action
being taken by any competent authority (including any court having
jurisdiction) which restrains, prevents or imposes, in the reasonable
judgment of the Required Banks or the Administrative Agent, materially
adverse conditions upon the consummation of the Transaction or any such
agreement or transaction; and
(ii) all necessary shareholder approvals in connection with the
Transaction shall have been obtained and remain in full force and
effect.
5.13 Indebtedness. On the Restatement Effective Date and after
giving effect to the consummation of the Transaction, the only Indebtedness for
borrowed money of Holdings and its Subsidiaries, other than Indebtedness
permitted under Sections 4.04(b)-(i) of the Holdings Guaranty, shall consist of
the Indebtedness incurred pursuant to the Credit Documents.
5.14 Payment of Fees. On the Restatement Effective Date, all
costs, fees and expenses (including, without limitation, legal fees and
expenses), and all other compensation contemplated by this Credit Agreement or
the other Credit Documents, due to the Administrative Agent or any Banks shall
have been paid to the extent due.
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5.15 Letter of Credit Request; Notice of Borrowing. Prior to
the issuance of the Letter of Credit, the Administrative Agent shall have
received a Letter of Credit Request satisfying the requirements of Section 2.02;
and prior to the incurrence of any Revolving Loans, the Administrative Agent
shall have received a Notice of Borrowing satisfying the requirements of Section
1.03.
5.16 Capital Structure. On or prior to the Restatement
Effective Date, the corporate and capital structure (and all agreements related
thereto) of Holdings and its Subsidiaries and all organizational documents of
Holdings and its Subsidiaries shall be reasonably satisfactory to the
Administrative Agent (after giving effect to the Transaction).
5.17 Solvency Certificate. On the Restatement Effective Date,
Holdings shall have delivered to the Administrative Agent a solvency certificate
from the Chief Financial Officer of Holdings in the form of Exhibit G.
5.18 A.M. Best Rating. On the Restatement Effective Date,
each Rated Ongoing Regulated Subsidiary of Holdings shall have an A.M. Best
claims paying rating of at least A-.
5.19 Holdings Guaranty. On the Restatement Effective Date,
Holdings shall have duly authorized, executed and delivered a Holdings Guaranty
in the form of Exhibit I (as modified, amended or supplemented from time to time
in accordance with the terms hereof and thereof, the "Holdings Guaranty"), and
the Holdings Guaranty shall be in full force and effect.
The acceptance of the benefits of each Credit Event occurring
on the Restatement Effective Date shall constitute a representation and warranty
by each of the Borrower and the Account Party to each of the Banks that all of
the applicable conditions specified in this Section 5 exist or have been
satisfied as of such date. The acceptance of the benefits of each Credit Event
occurring after the Restatement Effective Date shall constitute a representation
and warranty by each of the Borrower and the Account Party to each of the Banks
that all of the applicable conditions specified in Sections 5.02 and 5.15 exist
or have been satisfied as of such date. All of the certificates, legal opinions
and other documents and papers referred to in this Section 5, unless otherwise
specified, shall be delivered to the Administrative Agent at its Notice Office
for the account of each of the Banks.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Administrative Agent and the Banks to enter into this Credit
Agreement and to make the Loans and issue the Letters of Credit as provided
herein, each of the Borrower and the Account Party hereby makes the
representations and warranties set forth in Section 2 of the Holdings Guaranty
on behalf of themselves and their respective Subsidiaries, all of which
representations and warranties shall survive the execution and delivery of this
Credit Agreement and the making of the Loans and the issuance of the Letters of
Credit (with the occurrence of the Restatement Effective Date and the occurrence
of each Credit Event being deemed to constitute a representation and warranty
that the matters specified in Section 2 of the Holdings Guaranty are true and
correct in all material respects on and as of the Restatement Effective Date and
on the date of each such Credit Event (after giving effect to the consummation
of the Transaction) unless such representation and warranty expressly indicates
that it is being made as of any other specific date in which case such
representation and warranty shall be true and correct in all material respects
as of such other specified date).
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SECTION 7. Affirmative Covenants. Each of the Borrower and the
Account Party hereby covenants and agrees that on the Restatement Effective Date
and thereafter, for so long as this Credit Agreement is in effect and until the
Total Commitment and all Letters of Credit are terminated and all the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full, it will, and will cause each of its Subsidiaries
to, comply with the covenants set forth in Section 3 of the Holdings Guaranty,
in each case as and to the extent applicable to them.
SECTION 8. Negative Covenants. Each of the Borrower and the
Account Party hereby covenants and agrees that on the Restatement Effective Date
and thereafter, for so long as this Credit Agreement is in effect and until the
Total Commitment and all Letters of Credit are terminated and all Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full, it will, and will cause each of its Subsidiaries to
comply with the covenants set forth in Section 4 of the Holdings Guaranty, in
each case as and to the extent applicable to them.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower or the Account Party shall (i) in
the case of the Borrower, default in the payment when due of any principal of
the Loans, and in the case of the Account Party, default in the payment when due
of any Unpaid Drawing, (ii) default, and such default shall continue for three
or more Business Days, in the payment when due of any interest on the Loans or
any Fees or (iii) default, and such default shall continue for five or more
Business Days in the payment of any other amounts owing hereunder or under any
other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made or deemed made by the Borrower or the Account Party herein or by
any Credit Party in any other Credit Document or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made;
or
9.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 3.10 or 4 of the Holdings Guaranty (except for Sections 4.01, 4.07 and
4.09 of the Holdings Guaranty), or (b) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Section 9.01 or clause (a) of this Section 9.03) contained in this Credit
Agreement or in the Holdings Guaranty and such default shall continue unremedied
for a period of at least 30 days; or
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9.04 Default Under Other Agreements. (a) Holdings or any of
its Subsidiaries shall (i) default in any payment with respect to Indebtedness
(other than the Obligations), in excess of $10,000,000 individually or in the
aggregate, for Holdings and its Subsidiaries (collectively, "Material
Indebtedness"), beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any such
Material Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Material Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause any such Material
Indebtedness to become due prior to its stated maturity; or (b) any such
Material Indebtedness of Holdings or any of its Subsidiaries shall be declared
to be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment or as a mandatory prepayment (unless such required
prepayment or mandatory prepayment results from a default thereunder or an event
of the type that constitutes an Event of Default), prior to the stated maturity
thereof; or
9.05 Bankruptcy, etc. Holdings or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against Holdings or any of its Subsidiaries and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of Holdings or any of
its Subsidiaries; or Holdings or any of its Subsidiaries commences (including by
way of applying for or consenting to the appointment of, or the taking of
possession by, a rehabilitator, receiver, custodian, trustee, conservator or
liquidator (collectively, a "conservator") of itself or all or any substantial
portion of its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency,
liquidation, rehabilitation, conservatorship or similar law of any jurisdiction
whether now or hereafter in effect relating to Holdings or any of its
Subsidiaries; or any such proceeding is commenced against Holdings or any of its
Subsidiaries and remains undismissed for a period of 60 days; or Holdings or any
of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is entered; or (a) any
Regulated Insurance Company which is engaged in the business of underwriting
insurance and/or reinsurance in the United States suffers any appointment of any
conservator or the like for it or any substantial part of its property, or (b)
Holdings or any of its Subsidiaries (other than any Regulated Insurance Company
described in the immediately preceding clause (a)) suffers any appointment of
any conservator or the like for it or any substantial part of its property which
continues undischarged or unstayed for a period of 60 days; or Holdings or any
of its Subsidiaries makes a general assignment for the benefit of creditors; or
any corporate action is taken by Holdings or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
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(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed by the PBGC to administer such Plan, any Plan or Multiemployer Plan
which is subject to Title IV of ERISA is, shall have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, a contribution required to be made
with respect to a Plan, Multiemployer Plan or Foreign Pension Plan has not been
timely made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate has
incurred or is likely to incur any liability to or on account of a Plan or
Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or Holdings
or any Subsidiary of Holdings has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans or Foreign
Pension Plans, a "default," within the meaning of Section 4219(5) of ERISA,
shall occur with respect to any Multiemployer Plan; any applicable law, rule or
regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
governmental authority or agency or by any court (a "Change in Law"), or, as a
result of a Change in Law, an event occurs following a Change in Law, with
respect to or otherwise affecting any Plan or Multiemployer Plan; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, individually
and/or in the aggregate, in the opinion of the Required Banks has had, or could
reasonably be expected to have, a Material Adverse Effect; or
9.07 Guaranties. (a) The Holdings Guaranty or any provision
thereof shall cease to be in full force and effect, or Holdings or any Person
acting by or on behalf of Holdings shall deny or disaffirm Holdings' obligations
under the Holdings Guaranty; or
(b) The Trenwick America Guaranty or any provision thereof
shall cease to be in full force and effect, or the Borrower or any Person acting
by or on behalf of the Borrower shall deny or disaffirm the Borrower's
obligations under the Trenwick America Guaranty or the Borrower shall default in
the due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to the Trenwick America Guaranty; or
(c) The Subsidiary Guaranty or any provision thereof shall
cease to be in full force and effect, or any Subsidiary Guarantor or any Person
acting by or on behalf of such Subsidiary Guarantor shall deny or disaffirm such
Subsidiary Guarantor's obligations under the Subsidiary Guaranty or any
Subsidiary Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
the Subsidiary Guaranty; or
9.08 Judgments. One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries involving a liability, net
of undisputed reinsurance, of $10,000,000 or more in the case of any one such
judgment or decree or in the aggregate for all such judgments and decrees for
Holdings and its Subsidiaries and any such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or
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9.09 Change of Control. A Change of Control shall occur; or
9.10 Senior Unsecured Debt Ratings. By the 90th day following
the Restatement Effective Date, Holdings shall not have received a confirmed S&P
Credit Rating (taking into account the LaSalle Business Combination) of at least
BBB- and a confirmed Xxxxx'x Credit Rating (taking into account the LaSalle
Business Combination) of at least Baa3; or
9.11 A.M. Best Ratings. Any Rated Ongoing Regulated
Subsidiary shall fail to have an A.M. Best claims paying rating of at least A-;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower and the Account
Party, take any or all of the following actions, without prejudice to the rights
of the Administrative Agent or any Bank to enforce its claims against the
Borrower, the Account Party or any other Credit Party, except as otherwise
specifically provided for in this Credit Agreement (provided that if an Event of
Default specified in Section 9.05 shall occur with respect to Holdings, the
Borrower or the Account Party, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (i), (ii),
(iii) and (v) below shall occur automatically without the giving of any such
notice): (i) declare the Total Revolving Loan Commitment terminated, whereupon
the Revolving Loan Commitment of each Bank shall forthwith terminate
immediately, (ii) declare the Total Unutilized L/C Commitment terminated,
whereupon the Unutilized L/C Commitment of each Bank shall forthwith terminate
immediately, (iii) declare the principal of and any accrued interest in respect
of all Loans and all other Obligations owing hereunder and under the other
Credit Documents to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each of the Borrower and the Account Party, (iv)
terminate any Letter of Credit if permitted in accordance with its terms, and
(v) direct the Account Party to pay (and the Account Party hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05, to pay) to the Administrative Agent at the Payment Office an
amount of cash to be held as security for the Account Party's reimbursement
obligations in respect of all Letters of Credit then outstanding, equal to the
aggregate Stated Amount of all Letters of Credit at such time.
SECTION 10. Definitions. Defined terms used in this Credit
Agreement shall have the meanings set forth in Schedule I attached hereto.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular.
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SECTION 11. The Administrative Agent.
11.01 Appointment. Each Bank hereby irrevocably designates and
appoints Chase as Administrative Agent (such term as used in this Section 11 to
include Chase Manhattan International Limited, acting as the Issuing Agent under
this Credit Agreement and the Letters of Credit) to act as specified herein and
in the other Credit Documents, and each such Bank hereby irrevocably authorizes
Chase, as the Administrative Agent for such Bank, to take such action on its
behalf under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Credit Agreement and
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this Section 11. Notwithstanding any provision
to the contrary elsewhere in this Credit Agreement, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in the other Credit Documents, nor any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Credit Agreement or otherwise exist
against the Administrative Agent. The provisions of this Section 11 are solely
for the benefit of the Administrative Agent and the Banks, and no Credit Party
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Credit Agreement, the
Administrative Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation or relationship of agency
or trust with or for the Credit Party.
11.02 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Credit Agreement or any other Credit
Document by or through its affiliates, agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Credit Agreement
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by Holdings or any of its Subsidiaries or any
of their respective officers contained in this Credit Agreement, any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Credit Agreement or any other Credit Document or for
any failure of Holdings or any of its Subsidiaries or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Bank to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Credit Agreement, or to inspect the properties, books or
records of Holdings or any of its Subsidiaries. The Administrative Agent shall
not be responsible to any Bank for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement or any
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the
Administrative Agent to the Banks or by or on behalf of Holdings, the Borrower
or the Account Party to the Administrative Agent or any Bank or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
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11.04 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Holdings, the Borrower or the Account Party), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or any other Credit Document unless it shall
first receive such advice or concurrence of the Required Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Credit Agreement and the other Credit Documents in accordance with a
request of the Required Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.
11.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Bank or any Credit Party referring to this Credit Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks, provided
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.
11.06 Non-Reliance. Each Bank expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of Holdings or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Bank. Each Bank represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of Holdings and its Subsidiaries and made its own
decision to make its Loans hereunder, participate in the Letter of Credit issued
hereunder and enter into this Credit Agreement. Each Bank also represents that
it will, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Credit Agreement, and to
make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of Holdings and its Subsidiaries. The
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
assets, property, financial and other conditions, prospects or creditworthiness
of Holdings or any Subsidiary which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys- in-fact or affiliates.
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11.07 Indemnification. Each Bank agrees to indemnify the
Administrative Agent in its capacity as such ratably according to such Bank's
percentage used in determining Required Banks from time to time, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Administrative Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or any other Credit
Document, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Administrative Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by Holdings or any of
its Subsidiaries, provided that no Bank shall be liable to the Administrative
Agent for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful
misconduct. If any indemnity furnished to the Administrative Agent for any
purpose shall, in the opinion of the Administrative Agent, be insufficient or
become impaired, the Administrative Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section 11.07 shall survive the
payment of all Obligations.
11.08 The Administrative Agent in its Individual Capacity.
Chase and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with Holdings and its Subsidiaries as though
Chase were not acting as Administrative Agent hereunder. With respect to the
Loans made by it and all Obligations owing to it, Chase shall have the same
rights and powers under this Credit Agreement as any Bank and may exercise the
same as though it were not the Administrative Agent, and the terms "Bank" and
"Banks" shall include the Administrative Agent in its individual capacity.
11.09 Successor Administrative Agent. The Administrative Agent
may resign as the Administrative Agent upon 20 days' notice to the Banks,
Holdings, the Borrower and the Account Party. Upon such resignation, the
Required Banks shall, with the consent of each of Holdings, the Borrower and the
Account Party (such consent not to be unreasonably withheld), appoint from among
the Banks a successor Administrative Agent for the Banks, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Credit Agreement. After the
retiring Administrative Agent's resignation hereunder as the Administrative
Agent, the provisions of this Section 11 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Credit Agreement.
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11.10 Other Agents. Nothing in this Credit Agreement or any
other Credit Document shall impose on the Documentation Agent or the Syndication
Agent, in each case in such capacity, any duties or obligations.
SECTION 12. Trenwick America Guaranty.
12.01 The Trenwick America Guaranty. In order to induce the
Administrative Agent, the Issuing Agent and the Banks to enter into this Credit
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Borrower from the issuance of the Letters of Credit
on behalf of the Account Party, the Borrower hereby agrees with the Banks as
follows: the Borrower hereby unconditionally and irrevocably guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all indebtedness
of the Account Party to the Guaranteed Creditors under this Credit Agreement and
the other Credit Documents and all Interest Rate Agreement or Other Hedging
Agreements entered into by a Guaranteed Creditor or a Lending Affiliate of a
Guaranteed Creditor. If any or all of the indebtedness of the Account Party to
the Guaranteed Creditors becomes due and payable hereunder or under such other
Credit Documents or Interest Rate Agreement or Other Hedging Agreements, the
Borrower unconditionally promises to pay such indebtedness to the Guaranteed
Creditors, on demand, together with any and all reasonable out-of-pocket
expenses which may be incurred by the Administrative Agent or the Guaranteed
Creditors in collecting any of the indebtedness. The word "indebtedness" is used
in this Section 12 in its most comprehensive sense and means any and all
advances, debts, obligations and liabilities of the Account Party arising in
connection with this Credit Agreement or any other Credit Documents or under any
Interest Rate Agreement or Other Hedging Agreement with a Guaranteed Creditor or
a Lending Affiliate of a Guaranteed Creditor, in each case, heretofore, now, or
hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether or not such indebtedness is from time to time reduced, or extinguished
and thereafter increased or incurred, whether the Account Party may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
12.02 Bankruptcy. Additionally, the Borrower unconditionally
and irrevocably guarantees the payment of any and all indebtedness of the
Account Party to the Guaranteed Creditors whether or not due or payable by upon
the occurrence of any of the events specified in Section 9.05, and
unconditionally and irrevocably promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, in the respective Approved Currency.
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12.03 Nature of Liability. The liability of the Borrower
hereunder is exclusive and independent of any security for or other guaranty of
the indebtedness of the Account Party whether executed by the Borrower, any
other guarantor or by any other party, and the liability of the Borrower
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Account Party or by any other party, or (b) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the indebtedness of the Account Party, or
(c) any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel by
the Account Party, or (e) any payment made to any Guaranteed Creditor on the
indebtedness which such Guaranteed Creditor repays to the Account Party pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and the Borrower waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding.
12.04 Trenwick America Guaranty Absolute. No invalidity,
irregularity or unenforceability of all or any part of the indebtedness
guaranteed hereby or of any security therefor shall affect, impair or be a
defense to this Trenwick America Guaranty, and this Trenwick America Guaranty
shall be primary, absolute and unconditional notwithstanding the occurrence of
any event or the existence of any other circumstances which might constitute a
legal or equitable discharge of a surety or guarantor except payment in full of
the indebtedness guaranteed herein.
12.05 Independent Obligation. The obligations of the Borrower
hereunder are independent of the obligations of any other guarantor or the
Account Party, and a separate action or actions may be brought and prosecuted
against the Borrower whether or not action is brought against any other
guarantor or the Account Party and whether or not any other guarantor or the
Account Party be joined in any such action or actions. The Borrower waives, to
the fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the
Account Party or other circumstance which operates to toll any statute of
limitations as to the Account Party shall operate to toll the statute of
limitations as to the Borrower.
12.06 Authorization. The Borrower authorizes the Guaranteed
Creditors without notice or demand, and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the indebtedness (including any increase or decrease in
the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and this Trenwick
America Guaranty herein made shall apply to the indebtedness as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness
and sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the
indebtedness or any liabilities (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and/or
any offset there against;
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(c) exercise or refrain from exercising any rights against
the Account Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Account Party or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and subordinate
the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Account Party to its creditors other than
the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Account Party to the Guaranteed
Creditors regardless of what liability or liabilities of the Account
Party remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Credit Agreement or any of the instruments or
agreements referred to herein, or otherwise amend, modify or supplement
this Credit Agreement or any of such other instruments or agreements;
and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of the Borrower from its liabilities under this Section 12.
12.07 Reliance. It is not necessary for any Guaranteed
Creditors to inquire into the capacity or powers of the Account Party or its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on their behalf, and any indebtedness made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.
12.08 Subordination. Any indebtedness of the Account Party now
or hereafter held by the Borrower is hereby subordinated to the indebtedness of
the Account Party to the Guaranteed Creditors; and such indebtedness of the
Account Party to the Borrower, if the Administrative Agent (at the direction of
the Required Banks), after an Event of Default has occurred, so requests, shall
be collected, enforced and received by the Borrower as trustee for the
Guaranteed Creditors and be paid over to the Guaranteed Creditors on account of
the indebtedness of the Account Party to the Guaranteed Creditors, but without
affecting or impairing in any manner the liability of the Borrower under the
other provisions of this Trenwick America Guaranty. Prior to the transfer by the
Borrower of any note or negotiable instrument evidencing any indebtedness of the
Account Party to the Borrower, the Borrower shall xxxx such note or negotiable
instrument with a legend that the same is subject to this subordination.
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12.09 Waivers. (a) The Borrower waives any right to require
any Guaranteed Creditors to (i) proceed against the Account Party, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from the Account Party, any other guarantor or any other party or (iii) pursue
any other remedy in any Guaranteed Creditor's power whatsoever. The Borrower
waives any defense based on or arising out of any defense of the Account Party,
any other guarantor or any other party other than payment in full of the
indebtedness, including, without limitation, any defense based on or arising out
of the disability of the Account Party, any other guarantor or any other party,
or the unenforceability of the indebtedness or any part thereof from any cause,
or the cessation from any cause of the liability of the Account Party other than
to the extent of payment in full of the indebtedness. The Guaranteed Creditors
may, in accordance with the Credit Documents, at their election, foreclose on
any security held by the Administrative Agent, the Collateral Agent or any other
Guaranteed Creditors by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against any Borrower or any other party, or any
security, without affecting or impairing in any way the liability of the
Borrower hereunder except to the extent the indebtedness has been paid. The
Borrower waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of the Borrower against
the Account Party or any other party or any security.
(b) Except as otherwise specifically required hereunder, the
Borrower waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Trenwick America Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. The Borrower assumes all responsibility for being and keeping
itself informed of the Account Party's financial condition and assets, and of
all other circumstances bearing upon the risk of non-payment of the indebtedness
and the nature, scope and extent of the risks which the Borrower assumes and
incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty to
advise the Borrower of information known to them regarding such circumstances or
risks.
(c) The Borrower warrants and agrees that each of the waivers
set forth above in this Section 12.09 is made with full knowledge of its
significance and consequences and that if any of such waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the maximum extent permitted by law.
12.10 Trenwick America Guaranty Continuing. This Trenwick
America Guaranty is a continuing one and all liabilities to which it applies or
may apply under the terms hereof shall be conclusively presumed to have been
created in reliance hereon. No failure or delay on the part of any Guaranteed
Creditors in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Guaranteed Creditors or any subsequent holder of a Note, or issuer of,
or participant in, a Letter of Credit would otherwise have. No notice to or
demand on 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 rights of the Guaranteed Creditors or any holder, creator or
purchaser to any other or further action in any circumstances without notice or
demand.
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12.11 Binding Nature of Guaranties. This Trenwick America
Guaranty shall be binding upon the Borrower and its successors and assigns and
shall inure to the benefit of the Guaranteed Creditors and their successors and
assigns.
12.12 Judgments Binding. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the indebtedness and such Guaranteed Creditor
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property, or (b) any settlement or compromise of any such claim effected
by such Guaranteed Creditor with any such claimant (including the Account Party)
then and in such event the Borrower agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon the Borrower,
notwithstanding any revocation hereof or the cancellation of any Note, or other
instrument evidencing any liability of the Account Party, and the Borrower shall
be and remain liable to the Guaranteed Creditors hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. Each of the Borrower and the
Account Party, jointly and severally, hereby agree to: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, syndication, execution and delivery of the Credit
Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of White & Case LLP); (ii) pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent and each
of the Banks in connection with the enforcement of the Credit Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent
and for each of the Banks); (iii) pay and hold each of the Banks harmless from
and against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each of the Banks harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission to pay such taxes; and (iv) indemnify the Administrative Agent and each
Bank, and their respective officers, directors, employees, representatives and
agents (each, an "indemnified person") from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses
(collectively, "Claims") incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not the Administrative Agent or any Bank is a party
thereto) related to the entering into and/or performance of any Credit Document
or any other Transaction Document or the use of the proceeds of any Loans or the
Letter of Credit hereunder or the Transaction or the consummation of any other
transactions contemplated in any Credit Document, including, without limitation,
the reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). No Bank shall be liable for any damages arising from the use by
others of information or other materials obtained through electronic,
telecommunications or other information transmission systems.
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13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and continuance of an Event
of Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of such Credit Party against and on account of
the Obligations and liabilities of such Credit Party to such Bank or any other
Bank under this Credit Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of such Credit Party
purchased by such Bank or any other Bank pursuant to Section 13.06(b), and all
other claims of any nature or description arising out of or connected with this
Credit Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured. Each
Bank is hereby designated the agent of all other Banks for purposes of effecting
set off pursuant to this Section 13.02 and each Credit Party hereby grants to
each Bank for such Bank's own benefit and as agent for all other Banks a
continuing security interest in any and all deposits, accounts or moneys of such
Credit Party maintained from time to time with such Bank.
13.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including facsimile communication) and mailed, telecopied or delivered, if to
any Credit Party, at the address specified opposite its signature below; if to
any Bank, at its address specified for such Bank on Annex II hereto; or, at such
other address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be mailed,
telecopied, sent by overnight courier or delivered by hand and shall be deemed
to have been given on the date of receipt if delivered by hand or overnight
courier or sent by telecopy, or the date that is five Business Days after being
deposited in the mail, postage prepaid, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 13.03 or in
accordance with the last unrevoked notice from such party given in accordance
with this Section 13.03; provided that notices and communications to the
Administrative Agent shall be effective when received by the Administrative
Agent.
13.04 Benefit of Agreement. (a) This Credit Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that no Credit
Party may assign or transfer any of its rights or obligations hereunder without
the prior written consent of the Banks. Each Bank may at any time grant
participations in any of its rights hereunder or under any of its Notes to any
bank or other financial institution; provided that in the case of any such
participation, (i) such Bank's obligations under this Credit Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participant
shall agree to be bound by the confidentiality provisions contained in Section
13.15 and (iv) the participant shall not have any rights under this Credit
Agreement or any of the other Credit Documents, including rights of consent,
approval or waiver (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such Bank
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in favor of the participant relating thereto) and all amounts payable by the
Borrower and the Account Party hereunder shall be determined as if such Bank had
not sold such participation, except that the participant shall be entitled to
receive the additional amounts under Sections 1.10, 1.11 and 4.04 of this Credit
Agreement to, and only to, the extent that, and in no greater amount than, such
Bank would be entitled to such benefits if the participation had not been
entered into or sold; and provided further, that no Bank shall transfer, grant
or assign any participation under which the participant shall have rights to
approve any amendment to or waiver of this Credit Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend any
Scheduled Repayment or the final scheduled maturity of any Loan, Note or Letter
of Credit in which such participant is participating (it being understood that
any waiver of the application of any prepayment or the method of application of
any prepayment to the amortization of, the Loans shall not constitute an
extension of a Scheduled Repayment or the final scheduled maturity date), or
reduce the rate or extend the time of payment of interest thereon or Fees, or
reduce the principal amount thereof, or increase such participant's
participating interest in any Commitment, Loan or Letter of Credit over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitment or of a
mandatory repayment or prepayment shall not constitute a change in the terms of
any Commitment and that an increase in any Commitment shall be permitted without
the consent of any participant if such participant's participation is not
increased as a result thereof), or (ii) consent to the assignment or transfer by
Holdings, the Borrower or the Account Party of any of their respective rights
and obligations under this Credit Agreement or any other Credit Document except
in accordance with the terms hereof and thereof.
(b) Notwithstanding the foregoing, any Bank may assign all or
a portion of its rights and obligations hereunder to a bank or other financial
institution with the prior written consent of the Administrative Agent, the
Borrower and the Account Party, which consents shall not be unreasonably
withheld or delayed (provided that (i) no such consents shall be required in
connection with an assignment to a Person which is already a Bank hereunder or
an affiliate of a Bank hereunder and (ii) the consent of the Borrower and the
Account Party shall not be required at any time when a Default or Event of
Default exists). No assignment of less than all of a Bank's rights and
obligations hereunder pursuant to the immediately preceding sentence shall, to
the extent such transaction represents an assignment to an institution other
than one or more Banks hereunder, be in an aggregate amount less than the
minimum of $5,000,000 unless otherwise agreed to by the Administrative Agent,
the Borrower and the Account Party in writing. No assignment of all or any
portion of a Bank's L/C Commitment shall be made to an institution which is not
an Approved Credit Institution, and no such assignment shall be effective until
all then outstanding Letters of Credit are returned by Lloyd's to the Issuing
Agent for cancellation in exchange for new or amended Letters of Credit having a
Schedule 1 thereto which gives effect to such assignment. If any Bank so sells
or assigns all or a part of its rights hereunder or under the Notes, any
reference in this Credit Agreement or the Notes to such assigning Bank shall
thereafter refer to such Bank and to the respective assignee to the extent of
their respective interests and the respective assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights,
obligations and benefits as it would if it were such assigning Bank. Each
assignment pursuant to this Section 13.04(b) shall be effected by the assigning
Bank and the assignee Bank executing an Assignment and Assumption Agreement
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substantially in the form of Exhibit H (appropriately completed) (the
"Assignment and Assumption Agreement"). At the time of any such assignment, (i)
Annex I shall be deemed to be amended to reflect the Commitments, if any, and
outstanding Loans of the respective assignee (which shall result in a direct
reduction to the Commitments, if any, and outstanding Loans of the assigning
Bank) and of the other Banks, (ii) if any such assignment occurs after the
Restatement Effective Date, at the request of the assignor or the assignee the
Borrower will issue new Notes to the respective assignee and to the assigning
Bank in conformity with the requirements of Section 1.05, (iii) the
Administrative Agent shall receive from the assigning Bank and/or the assignee
Bank or financial institution at the time of each assignment (other than an
assignment to an affiliate of a Bank hereunder) the payment of a nonrefundable
assignment fee of $3,500, (iv) the Administrative Agent shall receive from the
assignee Bank the Administrative Agent's administrative questionnaire completed
by such assignee Bank and (v) if any such assignment is of all or a portion of
the assigning Bank's L/C Commitment, all then outstanding Letters of Credit
shall be amended or returned by the Account Party to the Issuing Agent for
cancellation and reissued to reflect such assignment. At the time of each
assignment pursuant to this Section 13.04(b) to a Person which is not already a
Bank hereunder and which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Bank shall provide to the Borrower, the Account Party and
the Administrative Agent the appropriate Internal Revenue Service forms (and, if
applicable a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). Each
Bank, the Borrower and the Account Party agrees to execute such documents
(including, without limitation, amendments to the Credit Agreement and the other
Credit Documents) as shall be necessary to effect the foregoing. Promptly
following any assignment pursuant to this Section 13.04(b), the assigning Bank
shall promptly notify the Borrower, the Account Party and the Administrative
Agent thereof. Nothing in this Section 13.04 shall prevent or prohibit any Bank
from pledging its Loans or Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section
13.04, no transfer or assignment of the interests or obligations of any Bank
hereunder or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require the Borrower or the Account Party to
file a registration statement with the SEC or to qualify the Loans under the
"Blue Sky" laws of any state.
(d) Each Bank initially party to this Credit Agreement hereby
represents, and each Person that becomes a Bank pursuant to an assignment
permitted by clause (b) above will upon its becoming party to this Credit
Agreement represent, that it is a commercial lender, other financial institution
or other "accredited investor" (as defined in SEC Regulation D) which makes
loans in the ordinary course of its business or is acquiring the Loans without a
view to distribution of the Loans within the meaning of the federal securities
laws, and that it will make or acquire Loans for its own account in the ordinary
course of such business, provided that, subject to the preceding clauses (a)
through (c), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Bank shall at all times be within its
exclusive control.
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13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between any Credit Party and the Administrative Agent or any Bank shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Bank would otherwise have. No notice to or demand on
the Borrower or the Account Party in any case shall entitle such Person to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Banks to
any other or further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of Holdings,
the Borrower or the Account Party in respect of any Obligations of such Persons,
it shall distribute such payment to the Banks (other than any Bank that has
consented in writing to waive its pro rata share of such payment) pro rata based
upon their respective shares, if any, of the Obligations with respect to which
such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of Holdings, the Borrower and the Account Party to such Banks in such amount as
shall result in a proportional participation by all of the Banks in such amount,
provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 13.06(a) and (b) shall be subject to
the express provisions of this Credit Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to Defaulting
Banks.
13.07 Computations. (a) All computations of interest
on Eurodollar Loans and Fees hereunder shall be made on the actual number of
days elapsed over a year of 360 days.
(b) All computations of interest on Base Rate Loans hereunder
shall be made on the actual number of days elapsed over a year of 365/366 days.
(c) For purposes of this Credit Agreement, the Dollar
Equivalent of each Loan that is an Alternate Currency Loan and the Dollar
Equivalent of the stated amount of each Letter of Credit that is an Alternate
Currency Letter of Credit shall be calculated on the date when any such Loan is
made or such Letter of Credit is issued, on the first Business Day of each month
and at such other times as designated by the Administrative Agent at any time
when a Default or an Event of Default exists. Such Dollar Equivalent shall
remain in effect until the same is recalculated by the Administrative Agent as
provided above and notice of such recalculation is received by the Borrower or
the Account Party, as the case may be, it being understood that until such
notice is received, the Dollar Equivalent shall be that Dollar Equivalent as
last reported to the Borrower and the Account Party by the Administrative Agent.
The Administrative Agent shall promptly notify the Borrower, the Account Party
and the Banks of each such determination of the Dollar Equivalent.
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13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a)
THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS CREDIT AGREEMENT, EACH CREDIT PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT PARTY HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH
CREDIT PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION
OVER SUCH CREDIT PARTY. EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH CREDIT PARTY AT ITS ADDRESS FOR NOTICES PURSUANT TO
SECTION 13.03, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO
IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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13.09 Counterparts. This Credit Agreement may be executed in
any number of counterparts and by the 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. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower, the Account Party and the Administrative Agent.
13.10 Effectiveness. (a) This Credit Agreement shall become
effective on the date (the "Restatement Effective Date") on which (i) the
Borrower, the Account Party and each of the Banks shall have signed a copy
hereof (whether the same or different copies) and shall have delivered the same
to the Administrative Agent at the Administrative Agent's Notice Office or, in
the case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written, telex or telecopy notice (actually received) at
such office that the same has been signed and mailed to it and (ii) the
conditions contained in Sections 5 and 13.10(b) are met to the satisfaction of
the Administrative Agent and the Required Banks (determined immediately after
the occurrence of the Restatement Effective Date). Unless the Administrative
Agent has received actual notice from any Bank that the conditions contained in
Section 5 have not been met to its satisfaction, upon the satisfaction of the
conditions described in clause (i) of the immediately preceding sentence and
upon the Administrative Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met,
then the Restatement Effective Date shall have been deemed to have occurred,
regardless of any subsequent determination that one or more of the conditions
thereto have not been met (although the occurrence of the Restatement Effective
Date shall not release the Borrower or the Account Party from any liability for
failure to satisfy one or more of the applicable conditions contained in Section
5). The Administrative Agent will give the Borrower, the Account Party and each
Bank prompt written notice of the occurrence of the Restatement Effective Date.
(b) On the Restatement Effective Date, each New Bank and each
Continuing Bank shall deliver to the Administrative Agent for the account of the
Borrower an amount equal to (i) in the case of each New Bank, the Revolving
Loans to be made by such New Bank on the Restatement Effective Date and (ii) in
the case of each Continuing Bank, the amount by which the principal amount of
Revolving Loans to be made by such Continuing Bank on the Restatement Effective
Date exceeds the amount of the Original Loans of such Continuing Bank
outstanding on the Restatement Effective Date (it being understood and agreed
that to the extent the amount by which the principal amount of Revolving Loans
to be made by such Continuing Bank on the Restatement Effective Date is less
than the amount of the Original Loans of such Continuing Bank outstanding on the
Restatement Effective Date the difference between such amounts shall be returned
to such Continuing Bank). Notwithstanding anything to the contrary contained in
this Section 13.10(b), in satisfying the foregoing condition, unless the
Administrative Agent shall have been notified by any Bank prior to the
occurrence of the Restatement Effective Date that such Bank does not intend to
make available to the Administrative Agent such Bank's Revolving Loans required
to be made by it on such date, then the Administrative Agent may, in reliance on
such assumption, make available to the Borrower the corresponding amounts in
accordance with the provisions of Section 1.04, and the making available by the
Administrative Agent of such amounts shall satisfy the condition in this Section
13.10(b).
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13.11 Headings Descriptive. The headings of the several
sections and subsections of this Credit Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Credit Agreement.
13.12 Amendment or Waiver. Neither this Credit Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks, provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank affected thereby (other than
a Defaulting Bank), (i) extend any Scheduled Repayment or the scheduled final
maturity of any Loan, Letter of Credit or Note (it being understood that any
waiver of the application of any prepayment or the method of application of any
prepayment to the amortization of the Loans shall not constitute an extension of
any Scheduled Repayment or the scheduled final maturity thereof), or reduce the
rate, or extend the time of payment, of interest thereon or Fees or reduce the
principal amount thereof, (ii) increase the Commitments of any Bank over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitment or
mandatory repayment or prepayment shall not constitute a change in the terms of
any Commitment of any Bank), (iii) amend, modify or waive any provision of this
Section 13.12, (iv) reduce any percentage specified in, or otherwise modify, the
definition of Required Banks or (v) consent to the assignment or transfer by
Holdings, the Borrower or the Account Party of any of their respective rights
and obligations under this Credit Agreement or the other Credit Documents. No
provision of Section 11 or any other provision relating to the rights and/or
obligations of the Administrative Agent may be amended without the consent of
the Administrative Agent.
13.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 4.04, 11.07 or 13.01 shall survive
the execution and delivery of this Credit Agreement and the making of the Loans,
the repayment of the Obligations and the termination of the Total Commitment.
13.14 Domicile of Loans. Subject to Section 13.04, each Bank
may transfer and carry its Loans at, to or for the account of any branch office,
subsidiary or affiliate of such Bank, provided that neither the Borrower nor the
Account Party shall be responsible for costs arising under Section 1.10 or 4.04
resulting from any such transfer to the extent not otherwise applicable to such
Bank prior to such transfer.
-45-
13.15 Confidentiality. The Administrative Agent and each Bank
shall hold all non-public information furnished by or on behalf of the Borrower
and the Account Party in connection with such Bank's evaluation of whether to
become a Bank hereunder or obtained by such Bank pursuant to the requirements of
the Credit Documents ("Confidential Information") in accordance with its
customary procedure for handling confidential information of this nature and in
accordance with safe and sound banking or lending practices; provided that any
Bank and/or its affiliates may disclose any such Confidential Information (a) to
their respective affiliates, directors, officers, employees, auditors or counsel
for purposes related to the Credit Documents and the transactions contemplated
thereby, provided that the Bank disclosing such confidential information
pursuant to this clause (a) shall remain liable for any non-permitted disclosure
of such information by any such employee, director, agent, attorney, accountant
or professional advisor, (b) as has become generally available to the public
other than as a result of disclosure in violation of this Section 13.15, (c) as
has become available to such Bank or any such affiliate on a non-confidential
basis from a source other than the Borrower or the Account Party and their
respective affiliates, provided that the source is not known by such Bank to be
prohibited from transmitting such information to such Bank by a contractual,
legal or fiduciary obligation, (d) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank and/or
its affiliates, (e) as may be required or appropriate in respect to any summons
or subpoena or in connection with any litigation or other judicial process (it
being understood that, to the extent reasonably practicable and legally
permitted under the circumstances, the Borrower or the Account Party, as the
case may be, shall be given prior notice and an opportunity to contest any
proposed disclosure pursuant to this clause (e)), (f) in order to comply with
any law, order, regulation or ruling applicable to such Bank and/or its
affiliates, and (g) to any permitted prospective or actual syndicate member or
participant in the Loans, provided that such prospective or actual syndicate
member or participant agrees with the respective assigning Bank to be bound by
the provisions of this Section 13.15. The provisions of this Section 13.15 shall
survive any termination of the Credit Agreement.
13.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS CREDIT
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT,
THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.17 Judgment Currency. (a) Each of the Borrower's and the
Account Party's Obligations hereunder and under the other Credit Documents to
make payments in the applicable Approved Currency (the "Obligation Currency")
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Administrative Agent or the respective Bank of the full
amount of the Obligation Currency expressed to be payable to the Administrative
Agent or such Bank under the Credit Agreement or the other Credit Documents. If,
for the purpose of obtaining or enforcing judgment against the Borrower or the
Account Party in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount
due, in the Obligation Currency, the conversion shall be made at the Relevant
Currency Equivalent, and, in the case of other currencies, the rate of exchange
(as quoted by the Administrative Agent or if the Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent) determined, in each case, as of the
Business Day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
-46-
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrower and the Account Party jointly and severally
covenant and agree to pay, or cause to be paid, such additional amounts, if any
(but in any event not a lesser amount) as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Relevant Currency
Equivalent or any other rate of exchange for this Section, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.
13.18 Euro. (a) If at any time that an Alternate Currency Loan
or an Alternate Currency Letter of Credit is outstanding, the relevant Alternate
Currency is fully replaced as the lawful currency of the country that issued
such Alternate Currency (the "Issuing Country") by the Euro so that all payments
are to be made in the Issuing Country in Euros and not in the Alternate Currency
previously the lawful currency of such country, then such Alternate Currency
Loan or Alternate Currency Letter of Credit shall be automatically converted
into a Loan or Letter of Credit denominated in Euros in a principal amount or
stated amount equal to the amount of Euros into which the principal amount or
stated amount of such Alternate Currency Loan or Letter of Credit would be
converted pursuant to the EMU Legislation and thereafter no further Loans will
be available in such Alternate Currency, with the basis of accrual of interest,
notices requirements and payment offices with respect to such converted Loans or
Letters of Credit to be that consistent with the convention and practices in the
London interbank market for Euro denominated Loans or Letters of Credit.
(b) Each of the Borrower and the Account Party shall from time
to time, at the request of any Bank, pay to such Bank the amount of any losses,
damages, liabilities, claims, reduction in yield, additional expense, increased
cost, reduction in any amount payable, reduction in the effective return of its
capital, the decrease or delay in the payment of interest or any other return
forgone by such Bank or its affiliates as a result of the tax or currency
exchange resulting from the introduction, changeover to or operation of the Euro
in any applicable nation or Eurocurrency market.
-47-
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as of the
date first above written.
Address:
-------
One Canterbury Green TRENWICK AMERICA CORPORATION
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxx
---------------------------------
Title: Executive Vice President
and Treasurer
TRENWICK HOLDINGS LIMITED
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Title: Finance Director
THE CHASE MANHATTAN BANK,
Individually and as
Administrative Agent
By: /s/ Xxxxxx Xxxxx
---------------------------------
Title: Vice President
CHASE MANHATTAN INTERNATIONAL
LIMITED, as Issuing Agent
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Title: Vice President
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Title: Vice President
-48-
FIRST UNION NATIONAL BANK,
Individually and as Syndication
Agent
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Title: Senior Vice President
FLEET NATIONAL BANK, Individually
and as Documentation Agent
By: /s/ Jan-Gee XxXxxxxx
---------------------------------
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxxxxx Xxxxx
---------------------------------
Title: Senior Vice President
DRESDNER BANK AG, New York
and Grand Cayman Branches
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxxx, XX
---------------------------------
Title: Assistant Vice President
NATIONAL WESTMINSTER BANK PLC
By: /s/ Xxx Xxxxxxxx
---------------------------------
Title: Head of Insurance, City
Markets Group
-49-
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Xxxx Xxxxxxx
--------------------------------
Title: Managing Director
THE FUJI BANK, LIMITED
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Title: Vice President & Manager
ING BANK, N.V., LONDON BRANCH
By: /s/ Xxxxxxxxxxx Xxxxx
--------------------------------
Title: Managing Director
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Title: Director
BARCLAYS BANK PLC
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Title: Relationship Director
-50-
CITIBANK, N.A.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Title: Vice President
DLJ CAPITAL FUNDING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Title: Vice President
-51-
ANNEX I
LIST OF BANKS AND COMMITMENTS
Bank Revolving Loan Commitment L/C Commitment
---- ------------------------- --------------
The Chase Manhattan Bank $ 43,541,666.67 $ 18,125,000.00
First Union National Bank $ 43,541,666.67 $ 18,125,000.00
Fleet National Bank $ 43,541,666.66 $ 18,125,000.00
Credit Lyonnais New York Branch $ 14,875,000.00 $ 20,125,000.00
Dresdner Bank AG, New York and $ 14,875,000.00 $ 20,125,000.00
Grand Cayman Branches
National Westminster Bank PLC $ 0 $ 40,000,000.00
State Street Bank and Trust Company $ 10,625,000.00 $ 14,375,000.00
The Bank of Nova Scotia $ 17,000,000.00 $ 23,000,000.00
The Fuji Bank, Limited $ 6,375,000.00 $ 8,625,000.00
Citibank, N.A. $ 10,625,000.00 $ 14,375,000.00
DLJ Capital Funding, Inc. $ 25,000,000.00 $ 0
ING Bank, N.V. $ 0 $ 35,000,000.00
Barclays Bank PLC $ 30,000,000.00 $ 0
Total $ 260,000.000.00 $ 230,000,000.00
=============== ==============
-52-
ANNEX II
BANK ADDRESSES
Bank Address
-------------
The Chase Manhattan Bank Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Ms. Xxxxx Xxxx
Xxxxx Manhattan International Limited 0 Xxxxxx Xxxx Xxxxxx
Xxxxxx X0XX
Tel: 00-000-000-0000
Fax: 00-000-000-0000
Attention: Xx. Xxxxxxx Xxxxxxx
First Union National Bank First Union Securities, Inc.
Financial Institutions Group
0000 Xxxxxxxx Xxxxxx, XX 0000
Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx XxXxxxxxxxx
Fleet National Bank 000 Xxxx Xxxxxx
Mail Code XXXX0000
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Ms. Jan-Gee XxXxxxxx
Credit Lyonnais New York Branch 1301 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Mr. Xxxxx Xxxxxxxxx
-00-
Xxxxxxxx Xxxx XX, Xxx Xxxx Dresdner Bank AG, New York Branch
and Grand Cayman Branches 00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx X.
Xxxxxxxx, XX
National Westminster Bank PLC Institutional Banking Group
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxx XX0X0XX
Tel: 00-000-000-0000
Fax: 00-000-000-0000
Attention: Xx. Xxx Xxxxxxxx
State Street Bank and Trust Company Citizens Bank
Xxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxx
The Bank of Nova Scotia Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxx
The Fuji Bank, Limited Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxx
Citibank, N.A. 33 Canada Square
Xxxxxx Xxxxx
Xxxxxx, X00 0XX
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attention: Mr. Xxxxxxx Xxxxxx
-54-
DLJ Capital Funding, Inc. 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxx Xxxxx
ING Bank, N.V. 00 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attention: Xxxxxx Miners
Barclays Bank PLC 00 Xxxxxxx Xxxxxx
Xxxxxx, XX0X 0XX
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attention: Xxxxxx Xxxxx
-55-
EXHIBIT A-1
FORM OF NOTICE OF BORROWING
[Date]
The Chase Manhattan Bank, as Administrative Agent for the Banks party to the
Credit Agreement referred to below
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 000000
Attention:
The undersigned, Trenwick America Corporation, a Delaware
corporation (the "Borrower"), refers to the Credit Agreement, dated as of
November 24, 1999, and amended and restated as of September 27, 2000, among the
Borrower, Trenwick Holdings Limited (the "Account Party"), the lenders from time
to time party thereto (the "Banks"), First Union National Bank, as Syndication
Agent, Fleet National Bank, as Documentation Agent and you, as Administrative
Agent for such Banks (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and hereby gives you irrevocable notice, pursuant to Section 1.03(a)
of the Credit Agreement, that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
1.03(a) of the Credit Agreement.
(i) The Business Day of the Proposed Borrowing is
__________ , ____.(2)
(ii) The aggregate principal amount of the Proposed
Borrowing is $______. (3)
-------------------------------------------
1 Shall be addressed to the following for a Proposed Borrowing of Alternate
Currency Loans: Chase Manhattan International Limited, 9 Xxxxxx Xxxx
Street, London E9YT, Attention: Xxxxx Xxxxxxx.
2 Shall be a Business Day at least one Business Day in the case of Base Rate
Loans, (ii) three Business Days in the case of Eurodollar Loans in Dollars
or (iii) four Business Days in the case of Eurodollar Loans constituting
Alternate Currency Loans, in each case, after the date hereof.
3 This amount (A) shall be stated in the applicable Approved Currency and
(B) (i) for Revolving Loans that are any Dollar denominated shall not be
less than $5,000,000 and if in excess thereof, shall be in an integral
Dollar denominated multiple of $1,000,000 and (ii) for any Revolving Loans
that are Alternate Currency Loans, shall be in an amount in the respective
Approved Currency having a Dollar Equivalent (determined on the date
hereof) of $5,000,000 and if in excess thereof, shall be in a Dollar
Equivalent multiple of $1,000,000 in the respective currency (provided
that in all cases, Base Rate Loans shall be Dollar denominated).
Exhibit A-1
Page 2
(iii) The Proposed Borrowing is to consist of [Base Rate
Loans] [Eurodollar Loans].
[(iv) The initial Interest Period for the Proposed
Borrowing is ____ month(s).](4)
[(v) The Approved Currency is _____________________.](5)
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement or in the other Credit Documents are
and will be true and correct in all material respects, both before and
after giving effect to the Proposed Borrowing and to the application of
the proceeds thereof, as though made on and as of such date, unless
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
TRENWICK AMERICA CORPORATION
By____________________________
Title:
-------------------------------------------
4 To be included for a Proposed Borrowing of Eurodollar Loans and shall
specify an Interest Period of one, two, three or six months.
5 To be included for a Proposed Borrowing of Alternate Currency Loans in the
case of Eurodollar Loans only.
Exhibit A-2
Page 1
FORM OF LETTER OF CREDIT REQUEST
No. 1 Dated 2
----- -------------
ChaseManhattan International Limited, as Issuing Agent under the Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement"), dated as of November 24, 1999, and amended and restated as of
September 27, 2000, among Trenwick America Corporation (the "Borrower"),
Trenwick Holdings Limited (the "Account Party"), the lending institutions from
time to time party thereto (the "Banks"), First Union National Bank, as
Syndication Agent, Fleet National Bank, as Documentation Agent and The Chase
Manhattan Bank, as Administrative Agent
9 Xxxxxx Xxxx Street
London E9YT
Attention: Xxxxx Xxxxxxx
Dear Sir or Madam:
We hereby request that Chase Manhattan International Limited,
as Issuing Agent for the Banks, on behalf of the Banks, issue a Letter of Credit
for the benefit of Lloyds on 3 (the "Date of Issuance") in the aggregate stated
amount of 4 .
The Letter of Credit will be issued for the account of the
Account Party on behalf of it's Subsidiary, 5 ].
------------------------
1 Letter of Credit Request Number.
2 Date of Letter of Credit Request.
3 Date of Issuance which shall be at any time and from time to time on or
after the Restatement Effective Date and on or prior to the L/C Issuance
Expiration Date.
4 Aggregate Stated Amount of the Letter of Credit shall not exceed, when
added to the Letter of Credit Outstandings at such time, the Total L/C
Commitment at such time.
1
Exhibit A-2
Page Two
For purposes of this Letter of Credit Request, unless
otherwise defined herein, all capitalized terms used herein which are defined in
the Credit Agreement shall have the respective meaning provided therein.
The Letter of Credit will have a stated expiration date of 6 .
We hereby certify that:
(1) The representations and warranties of the Credit Parties
contained in the Credit Agreement or in the other Credit Documents will be true
and correct in all material respects on the Date of Issuance, both before and
after giving effect to the issuance of the Letter of Credit requested hereby, as
though made on and as of such date, unless stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date; and
(2) no Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of Credit
requested hereby, would such a Default or an Event of Default occur.
----------------------------
5 If not issued on behalf of the Account Party, insert name of Subsidiary of
the Account Party that the Letter of Credit is being issued on behalf of.
6 Insert last date upon which drafts may be presented, which may not be
later than the L/C Maturity Date.
Exhibit A-2
Page Three
Copies of all documentation with respect to the supported
transaction are attached hereto.
TRENWICK HOLDINGS LIMITED
By_________________________
Title:
3
EXHIBIT B
Page 1
FORM OF LETTER OF CREDIT
To: The Council of Lloyd's
x/x Xxx Xxxxxxx Xxxxxx'x Xxxxx Xxxxxxxxxx
Xxxxxxx, Xxxx XX0 0XX
Dated ________ (1)
Dear Sirs:
Irrevocable Standby Letter of Credit No. [ ]
Re: Trenwick Holdings Limited (the "Applicant") on behalf of
[Name of Corporate Member of Lloyd's]
This Clean Irrevocable Standby Letter of Credit (the "Credit") is issued by the
banks whose names are set out in Schedule 1 hereto (the "Issuing Banks", and
each an "Issuing Bank") in favour of the Society of Lloyd's ("Lloyd's") on the
following terms:
1. Subject to the terms hereof, the Issuing Banks shall make
payments within two business days of demand on Chase Manhattan International
Limited (the "Agent") in accordance with paragraph 4 below.
2. Upon a demand being made by Lloyd's pursuant to paragraph 4
below each Issuing Bank shall pay that proportion of the amount demanded which
is equal to the proportion which its Commitment set out in Schedule 1 hereto
bears to the aggregate Commitments of all the Issuing Banks set out on Schedule
1 hereto provided that the obligations of the Issuing Banks under this Credit
shall be several and no Issuing Bank shall be required to pay an amount
exceeding its Commitment set out in Schedule 1 hereto and the Issuing Banks
shall not be obliged to make payments hereunder in aggregate amount exceeding a
maximum amount of [amount in Dollars]. Any payment by an Issuing Bank hereunder
shall be made in [Dollars] to Lloyd's account specified in the demand made by
Lloyd's pursuant to paragraph 4 below.
3. The initial expiry date of this Credit is December 31,
2004. This Credit will be extended automatically for a further year, without
written amendment, on the first day of January of every future year from the
commencement date, so that it is always valid for a minimum period of four years
unless, at least thirty days prior to December 31 of the first year of the then
current validity period, notice is given in writing, sent by registered mail for
the attention of the Manager, Members Funds Department, at the above address,
that this Credit will not be extended beyond the then current expiry date.
--------------------------------
(1) Date of Letter of Credit
EXHIBIT B
Page 2
4. Subject to paragraph 3 above, the Issuing Banks shall pay
to Lloyd's under this Credit upon presentation of a demand by Lloyd's on Chase
Manhattan International Limited, 9 Xxxxxx Xxxx Street, London E9YT,
substantially in the form set out in Schedule 2 hereto the amount specified
therein (which amount shall not, when aggregated with all other amounts paid by
the Issuing Banks to Lloyd's under this Credit, exceed the maximum amount
referred to in paragraph 2 above).
5. The Agent has signed this Credit as agent for disclosed
principals and accordingly shall be under no obligation to Lloyd's hereunder
other than in its capacity as an Issuing Bank.
6. All charges are for the Applicant's account.
7. Subject to any contrary indication herein, this
Letter of Credit is subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision) International Chamber of Commerce Publication No. 500.
8. This Credit shall be governed by and interpreted in
accordance with English law and the Issuing Banks hereby irrevocably submit to
the jurisdiction of the High Court of Justice in England.
9. Each of the Issuing Banks engages with Lloyd's that demands
made under and in compliance with the terms and conditions of this Credit will
be duly honored on presentation.
Very truly yours,
CHASE MANHATTAN INTERNATIONAL LIMITED
for and on behalf of
[Names of all Issuing Banks including
Agent ]
By:_______________________________
Name:
Title:
SCHEDULE 1
Issuing Banks' Commitments
Name and Address of Issuing Bank Commitment
(Dollars)
SCHEDULE 2
Form of Demand (Dollars)
[on Lloyd's letterhead]
Dear Sir/Madam
THE SOCIETY OF LLOYD'S
TRUSTEE OF
LETTER OF CREDIT NO.
With reference to the above, we enclose for your attention a Xxxx of Exchange,
together with the respective Letter of Credit. Payment should be made by way of
CHAPS. The account details are as follows:
[National Westminster Bank Plc Sort Code 60-00-01
City of London Office Account 00000000
X.X. Xxx 00000
0 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX]
Please quote Member Code:
Very truly yours,
for Manager
Members' Funds Department
Members' Services Unit
By:___________________
Name:
Title:
Your ref:
Our ref: MEM/ / / /C911f
Extn:
XXXX OF EXCHANGE
The Society of Lloyd's
Trustee of
Letter of Credit No.
Please pay in accordance with the terms of the Letter of Credit to our order the
amount of $____________.
For and on behalf of
Authorised Signatory
Members' Fund Department
To: Chase Manhattan International Limited
as Issuing Agent
EXHIBIT C-1
[Letterhead of Xxxxxxx Xxxxxxxx & Xxxxx]
27 September 2000
To: The Financial Institutions named in the Second Schedule to this opinion
Dear Sirs
We have acted as legal counsel in Bermuda to the Company in connection with the
execution and delivery of a credit agreement, dated as of 24 November 1999 and
amended and restated as of 27 September 2000, among Trenwick America Holdings
Corporation (the "Borrower"), Trenwick Holdings Ltd. (the "Account Party") and
the Financial Institutions named in the Second Schedule (the "Financial
Institutions") (the "Credit Agreement"), and the transactions contemplated
thereby.
The Company has requested that we provide this opinion, which is required
pursuant to Clause 5.04 of the Credit Agreement, in connection with the
following agreements:
(i) the Credit Agreement;
(ii) the Holdings Guaranty between the Company and the Chase Manhattan Bank
as Administrative Agent (the "Holdings Guaranty"); and
(iii) the Subsidiary Guaranty made by the Guarantors (the "Subsidiary
Guaranty").
(The Credit Agreement, the Holdings Guaranty and the Subsidiary
Guaranty are hereinafter collectively referred to as the "Subject
Agreements").
For the purposes of this opinion we have examined and relied upon the documents
listed, and in some cases defined, in the First Schedule to this opinion (the
"Documents"). Unless otherwise defined herein, capitalised terms have the
meanings assigned to them in the Credit Agreement.
Assumptions
In stating our opinion we have assumed:-
(a) the authenticity, accuracy and completeness of all Documents submitted
to us as originals and the conformity to authentic original Documents
of all Documents submitted to us as certified, conformed, notarised,
faxed or photostatic copies;
(b) the genuineness of all signatures on the Documents;
(c) the authority, capacity and power of each of the persons signing the
Documents (other than the Company in respect of the Subject
Agreements);
(d) that any representation, warranty or statement of fact or law, other
than as to the laws of Bermuda, made in any of the Documents is true,
accurate and complete;
(e) that the Subject Agreements constitute the legal, valid and binding
obligations of each of the parties thereto, other than the Company,
under the laws of its jurisdiction of incorporation or its jurisdiction
of formation;
(f) that the Subject Agreements have been validly authorised, executed and
delivered by each of the parties thereto, other than the Company, and
the performance thereof is within the capacity and powers of each such
party thereto;
(g) that the Subject Agreements will effect, and will constitute legal,
valid and binding obligations of each of the parties thereto,
enforceable in accordance with their terms, under the laws of the State
of New York by which they are expressed to be governed;
(h) that the Subject Agreements are in the proper legal form to be
admissible in evidence and enforced in the courts of the State of New
York and in accordance with the laws of the State of New York;
(i) that there are no provisions of the laws or regulations of any
jurisdiction other than Bermuda which would be contravened by the
execution or delivery of the Subject Agreements or which would have any
implication in relation to the opinion expressed herein and that, in so
far as any obligation under, or action to be taken under, the Subject
Agreements is required to be performed or taken in any jurisdiction
outside Bermuda, the performance of such obligation or the taking of
such action will constitute a valid and binding obligation of each of
the parties thereto under the laws of that jurisdiction and will not be
illegal by virtue of the laws of that jurisdiction;
(j) that the records which were the subject of the Company Search were
complete and accurate at the time of such search and disclosed all
information which is material for the purposes of this opinion and such
information has not since the date of the Company Search been
materially altered;
(k) that the records which were the subject of the Litigation Search were
complete and accurate at the time of such search and disclosed all
information which is material for the purposes of this opinion and such
information has not since the date of the Litigation Search been
materially altered;
(l) that the Company is not carrying on investment business in or from
within Bermuda under the provisions of the Xxxxxxxxxx Xxxxxxxx Xxx 0000
as amended from time to time (the "IBA");
2
(m) that the Resolutions are in full force and effect, have not been
rescinded, either in whole or in part, and accurately record the
resolutions passed by the Board of Directors of the Company in a
meeting which was duly convened and at which a duly constituted quorum
was present and voting throughout and that there is no matter affecting
the authority of the Directors to enter into the Subject Agreements,
not disclosed by the Constitutional Documents or the Resolutions, which
would have any adverse implication in relation to the opinions
expressed herein;
(n) that the Financial Institutions have no express or constructive
knowledge of any circumstance whereby any Director of the Company, when
the Board of Directors of the Company passed the Resolutions, failed to
discharge his fiduciary duty owed to the Company and to act honestly
and in good faith with a view to the best interests of the Company;
(o) that the Company has entered into its obligations under the Subject
Agreements in good faith for the purpose of carrying on its business
and that, at the time it did so, there were reasonable grounds for
believing that the transactions contemplated by the Subject Agreements
would benefit the Company;
(p) that each transaction to be entered into pursuant to the Subject
Agreements is entered into in good faith and for full value and will
not have the effect of preferring one creditor over another;
(q) that, when executed and delivered, the Subject Agreements will be in a
form which does not differ in any material respect from the drafts
which we have examined for the purposes of this opinion.
Opinion
Based upon and subject to the foregoing and subject to the reservations set out
below and to any matters not disclosed to us, we are of the opinion that:-
(1) The Company is an exempted company incorporated with limited liability
and existing under the laws of Bermuda. The Company possesses the
capacity to xxx and be sued in its own name and is in good standing
under the laws of Bermuda.
(2) The Company has all requisite corporate power and authority to enter
into, execute, deliver, and perform its obligations under the Subject
Agreements to which it is a party and to take all action as may be
necessary to complete the transactions contemplated thereby.
(3) The execution, delivery and performance by the Company of the Subject
Agreements to which it is a party and the transactions contemplated
thereby have been duly authorised by all necessary corporate action on
the part of the Company.
3
(4) The Subject Agreements to which the Company is a party will, upon due
execution by the Company, each constitute legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with its terms.
(5) Subject as otherwise provided in this opinion, no consent, licence or
authorisation of, filing with, or other act by or in respect of, any
governmental authority or court of Bermuda is required to be obtained
by the Company in connection with the execution, delivery or
performance by the Company of the Subject Agreements or to ensure the
legality, validity, admissibility into evidence or enforceability as to
the Company, of the Subject Agreements.
(6) The execution, delivery and performance by the Company of the Subject
Agreements and the transactions contemplated thereby do not and will
not violate, conflict with or constitute a default under (i) any
requirement of any law or any regulation of Bermuda or (ii) the
Constitutional Documents.
(7) The transactions contemplated by the Subject Agreements are not subject
to any currency deposit or reserve requirements in Bermuda. The Company
has been designated as "non-resident" for the purposes of the Exchange
Control Xxx 0000 and regulations made thereunder and there is no
restriction or requirement of Bermuda binding on the Company which
limits the availability or transfer of foreign exchange (i.e. monies
denominated in currencies other than Bermuda dollars) for the purposes
of the performance by the Company of its obligations under the Subject
Agreements.
(8) The financial obligations of the Company under the Subject Agreements
rank at least pari passu in priority of payment with all other
unsecured and unsubordinated indebtedness (whether actual or
contingent) issued, created or assumed by the Company other than
indebtedness which is preferred by virtue of any provision of Bermuda
law of general application.
Competing priorities between creditors of an insolvent company which is
a company in liquidation in Bermuda are generally determined in the
following order:-
(i) claims of secured creditors under fixed charges rank first in
priority;
(ii) pursuant to Section 236 of the Companies Xxx 0000, claims by
creditors in respect of taxes owing to the Bermuda Government
and rates owing to any municipality, as well as specified
wages accrued and unpaid, holiday remuneration and amounts due
under the Contributory Pensions Xxx 0000, the Workmen's
Compensation Xxx 0000, will rank second in priority;
4
(iii) claims of secured creditors under floating charges rank third
in priority;
(iv) claims by unsecured creditors rank fourth in priority; and
(v) claims in the nature of capital claims (generally the claims
of shareholders) or subordinated claims rank last and, amongst
themselves, in accordance with the bye-laws of the company or
any shareholders agreement of the company or the terms of any
subordination agreement in the liquidation.
On the winding up of a pension plan maintained by a company which is in
liquidation, under the National Pension Scheme (Occupational Xxxxxxxx)
Xxx 0000 as amended, the property or proceeds of sale of any property
seized or sold in pursuance of a court order as provided in the
statute, will not be distributed to a secured creditor until
contributions due from the employer have been provided for.
(9) The choice of the laws of the State of New York as the proper law to
govern the Subject Agreements is a valid choice of law under Bermuda
law and such choice of law would be recognised, upheld and applied by
the courts of Bermuda as the proper law of the Subject Agreements in
proceedings brought before them in relation to the Subject Agreements,
provided that (i) the point is specifically pleaded; (ii) such choice
of law is valid and binding under the laws of the State of New York;
and (iii) recognition would not be contrary to public policy as that
term is understood under Bermuda law.
(10) The submission by the Company to the jurisdiction of the courts of the
State of New York pursuant to the Subject Agreements is not contrary to
Bermuda law and would be recognised by the courts of Bermuda as a
legal, valid and binding submission to the jurisdiction of the courts
of the State of New York, if such submission is accepted by such courts
and is legal, valid and binding under the laws of the State of New
York.
(11) A final and conclusive judgment of a foreign court against the Company
based upon the Subject Agreements (other than a court of jurisdiction
to which The Judgments (Reciprocal Enforcement) Act, 1958 applies, and
it does not apply to the courts of the State of New York) under which a
sum of money is payable (not being a sum payable in respect of taxes or
other charges of a like nature, in respect of a fine or other penalty,
or in respect of multiple damages as defined in The Protection of
Trading Interests Act 1981) may be the subject of enforcement
proceedings in the Supreme Court of Bermuda under the common law
doctrine of obligation by action on the debt evidenced by the foreign
court's judgment. A final opinion as to the availability of this remedy
should be sought when the facts surrounding the foreign court's
judgment are known, but, on general principles, we would expect such
proceedings to be successful provided that:-
5
(i) the court which gave the judgment was competent to hear the
action in accordance with private international law
principles as applied in Bermuda; and
(ii) the judgment is not contrary to public policy in Bermuda, has
not been obtained by fraud or in proceedings contrary to
natural justice and is not based on an error in Bermuda law.
Enforcement of such a judgment against assets in Bermuda may involve
the conversion of the judgment debt into Bermuda dollars, but the
Bermuda Monetary Authority has indicated that its present policy is to
give the consents necessary to enable recovery in the currency of the
obligation.
No stamp duty or similar or other tax or duty is payable in Bermuda on
the enforcement of a foreign judgment. Court fees will be payable in
connection with proceedings for enforcement.
(12) According to the records maintained in the Register of Companies at the
office of the Registrar of Companies as revealed by the Company Search
the current address of the registered office of the Company is 00 Xxxxx
Xxxxxx, Xxxxxxxx XX 12, Bermuda.
(13) Neither the Company nor any of its assets or property enjoys, under
Bermuda law, immunity on the grounds of sovereignty from any legal or
other proceedings whatsoever or from enforcement, execution or
attachment in respect of its obligations under the Subject Agreements.
(14) Based solely upon the Company Search and the Litigation Search:
(i) no litigation, arbitration or administrative or other
proceeding of or before any arbitrator or governmental
authority of Bermuda is pending against or affecting the
Company or against or affecting any of its properties, rights,
revenues or assets; and
(ii) no notice to the Registrar of Companies of the passing of a
resolution of members or creditors to wind up or the
appointment of a liquidator or receiver has been given. No
petition to wind up the Company or application to reorganise
its affairs pursuant to a Scheme of Arrangement or application
for the appointment of a receiver has been filed with the
Supreme Court.
6
(15) The Company has received an assurance from the Ministry of Finance
granting an exemption, until 28 March 2016, from the imposition of tax
under any applicable Bermuda law computed on profits or income or
computed on any capital asset, gain or appreciation, or any tax in the
nature of estate duty or inheritance tax, provided that such exemption
shall not prevent the application of any such tax or duty to such
persons as are ordinarily resident in Bermuda and shall not prevent the
application of any tax payable in accordance with the provisions of the
Land Tax Xxx 0000 or otherwise payable in relation to land in Bermuda
leased to the Company. There are, subject as otherwise provided in this
opinion, no Bermuda taxes, stamp or documentary taxes, duties or
similar charges now due, or which could in the future become due, in
connection with the execution, delivery, performance or enforcement of
the Subject Agreements or the transactions contemplated thereby, or in
connection with the admissibility in evidence thereof and the Company
is not required by any Bermuda law or regulation to make any deductions
or withholdings in Bermuda from any payment it may make thereunder.
(16) Charges over the assets of Bermuda companies (other than real property
in Bermuda or a ship or aircraft registered in Bermuda) wherever
situated, and charges on assets situated in Bermuda (other than real
property in Bermuda or a ship or aircraft registered in Bermuda) which
are granted by or to companies incorporated outside Bermuda, are
capable of being registered in Bermuda in the office of the Registrar
of Companies pursuant to the provisions of Part V of the Companies Xxx
0000 (the "Act"). Registration under the Act is the only method of
registration of charges over the assets of Bermuda companies in Bermuda
except charges over real property in Bermuda or ships or aircraft
registered in Bermuda. Registration under the Act is not compulsory and
does not affect the validity or enforceability of a charge and there is
no time limit within which registration of a charge must be effected.
However, in the event that questions of priority fall to be determined
by reference to Bermuda law, any charge registered pursuant to the Act
will take priority over any other charge which is registered
subsequently in regard to the same assets, and over all other charges
created over such assets after 1 July 1983, which are not registered.
Reservations
We have the following reservations:-
(a) The term "enforceable" as used in this opinion means that there is a
way of ensuring that each party performs an agreement or that there are
remedies available for breach.
(b) We express no opinion as to the availability of equitable remedies such
as specific performance or injunctive relief, or as to any matters
which are within the discretion of the courts of Bermuda in respect of
any obligations of the Company as set out in the Subject Agreements. In
particular, we express no opinion as to the enforceability of any
present or future waiver of any provision of law (whether substantive
or procedural) or of any right or remedy which might otherwise be
available presently or in the future under the Subject Agreements.
7
(c) Enforcement of the obligations of the Company under the Subject
Agreements may be limited or affected by applicable laws from time to
time in effect relating to bankruptcy, insolvency or liquidation or any
other laws or other legal procedures affecting generally the
enforcement of creditors' rights.
(d) Enforcement of the obligations of the Company may be the subject of a
statutory limitation of the time within which such
proceedings may be brought.
(e) We express no opinion as to any law other than Bermuda law and none of
the opinions expressed herein relates to compliance with or matters
governed by the laws of any jurisdiction except Bermuda. This opinion
is limited to Bermuda law as applied by the Courts of Bermuda at the
date hereof.
(f) Where an obligation is to be performed in a jurisdiction other than
Bermuda, the courts of Bermuda may refuse to enforce it to the extent
that such performance would be illegal under the laws of, or contrary
to public policy of, such other jurisdiction.
(g) We express no opinion as to the validity, binding effect or
enforceability of any provision incorporated into any of the Subject
Agreements by reference to a law other than that of Bermuda, or as to
the availability in Bermuda of remedies which are available in other
jurisdictions.
(h) Where a person is vested with a discretion or may determine a matter in
his or its opinion, such discretion may have to be exercised reasonably
or such an opinion may have to be based on reasonable grounds.
(i) Any provision in the Subject Agreements that certain calculations or
certificates will be conclusive and binding will not be effective if
such calculations or certificates are fraudulent or erroneous on their
face and will not necessarily prevent juridical enquiries into the
merits of any claim by an aggrieved party.
(j) We express no opinion as to the validity or binding effect of any
provision in the Subject Agreements for the payment of interest at a
higher rate on overdue amounts than on amounts which are current, or
that liquidated damages are or may be payable. Such a provision may not
be enforceable if it could be established that the amount expressed as
being payable was in the nature of a penalty; that is to say a
requirement for a stipulated sum to be paid irrespective of, or
necessarily greater than, the loss likely to be sustained. If it
cannot be demonstrated to the Bermuda court that the higher payment
was a reasonable pre-estimate of the loss suffered, the court will
determine and award what it considers to be reasonable damages.
Section 9 of The Interest and Credit Charges (Regulations) Xxx 0000
provides that the Bermuda courts have discretion as to the amount of
interest, if any, payable on the amount of a judgment after date of
judgment. If the Court does not exercise that discretion, then
interest will accrue at the statutory rate which is currently 7% per
annum.
8
(k) We express no opinion as to the validity or binding effect of any
provision of the Subject Agreements which provides for the severance of
illegal, invalid or unenforceable provisions.
(l) A Bermuda court may refuse to give effect to any provisions of the
Subject Agreements in respect of costs of unsuccessful litigation
brought before the Bermuda court or where that court has itself made an
order for costs.
(m) Searches of the Register of Companies at the office of the Registrar of
Companies and of the Supreme Court Causes Book at the Registry of the
Supreme Court are not conclusive and it should be noted that the
Register of Companies and the Supreme Court Causes Book do not reveal:
(i) whether an application to the Supreme Court for a winding up
petition or for the appointment of a receiver or manager has
been prepared but not yet been presented or has been presented
but does not appear in the Causes Book at the date and time
the Search is concluded;
(ii) whether any arbitration or administrative proceedings are
pending or whether any proceedings are threatened, or
whether any arbitrator has been appointed;
(iii) details of matters which have been lodged for filing or
registration which as a matter of general practice of the
Registrar of Companies would have or should have been
disclosed on the public file but have not actually been
registered or to the extent that they have been registered
have not been disclosed or do not appear in the public records
at the date and time the search is concluded;
(iv) details of matters which should have been lodged for
registration but have not been lodged for registration at the
date the search is concluded; or
(v) whether a receiver or manager has been appointed privately
pursuant to the provisions of a debenture or other security,
unless notice of the fact has been entered in the Register of
Charges in accordance with the provisions of the Act.
(n) In order to issue this opinion we have carried out the Company Search
as referred to in the First Schedule to this opinion and have not
enquired as to whether there has been any change since the date of such
search.
(o) In order to issue this opinion we have carried out the Litigation
Search as referred to in the First Schedule to this opinion and have
not enquired as to whether there has been any change since the date of
such search.
9
(p) In paragraph (1) above, the term "good standing" means that the Company
has received a Certificate of Compliance from the Registrar of
Companies.
Disclosure
This opinion is addressed to you solely for your benefit and is neither to be
transmitted to any other person, nor relied upon by any other person or for any
other purpose nor quoted or referred to in any public document nor filed with
any governmental agency or person, without our prior written consent, except as
may be required by law or regulatory authority. Further, this opinion speaks as
of its date and is strictly limited to the matters stated herein and we assume
no obligation to review or update this opinion if applicable law or the existing
facts or circumstances should change.
All of the attorneys practising as such at Xxxxxxx Xxxxxxxx & Xxxxx are members
of the Bermuda Bar Association. This opinion is governed by and is to be
construed in accordance with Bermuda law. It is given on the basis that it will
not give rise to any legal proceedings with respect thereto in any jurisdiction
other than Bermuda.
Yours faithfully
/s/ Xxxxxxx Xxxxxxxx & Xxxxx
-------------------------
Xxxxxxx Xxxxxxxx & Xxxxx
FIRST SCHEDULE
1. The entries and filings shown in respect of the Company on the file of
the Company maintained in the Register of Companies at office of the
Registrar of Companies in Hamilton, Bermuda, as revealed by a search on
22 September 2000 (the "Company Search").
2. The entries and filings shown in respect of the Company in the Supreme
Court Causes Book maintained at the Registry of the Supreme Court in
Hamilton, Bermuda, as revealed by a search on 22 September 2000 in
respect of the Company (the "Litigation Search").
3. Originals of the Certificate of Incorporation, Memorandum of
Association and the revised Bye-laws adopted 22 March 2000 for the
Company (collectively referred to as the "Constitutional Documents").
4. Certified copy of the Minutes of the Meeting of the Board of Directors
of the Company held on [DATE] (the "Resolutions").
5. The original "Foreign Exchange Letter", dated 14 December 1999, issued
by the Bermuda Monetary Authority, Xxxxxxxx Bermuda in relation to the
Company.
6. The original "Tax Assurance", dated 13 January 2000, issued by the
Registrar of Companies for the Minister of Finance in relation to the
Company.
7. A Certificate of Compliance, dated 21 September 2000, issued by the
Ministry of Finance in respect of the Company.
12. A draft Credit Agreement.
13. A draft Holdings Guaranty.
14. A draft Subsidiary Guaranty.
SECOND SCHEDULE
Financial Institutions
The Chase Manhattan Bank Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Ms. Xxxxx Xxxx
Xxxxx Manhattan International Limited 0 Xxxxxx Xxxx Xxxxxx
Xxxxxx X0XX
Tel: 00-000-000-0000
Fax: 00-000-000-0000
Attention: Xx. Xxxxxxx Xxxxxxx
First Union National Bank First Union Securities, Inc.
Financial Institutions Group
0000 Xxxxxxxx Xxxxxx, XX 0000
Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx XxXxxxxxxxx
Fleet National Bank 000 Xxxx Xxxxxx
Mail Code XXXX0000
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxxxxx Xxxxxxx
Credit Lyonnais New York Branch 1301 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Mr. Xxxxx Xxxxxxxxx
Dresdner Bank AG, New York Dresdner Bank AG, New York Branch
and Grand Cayman Branches 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxx
1
National Westminster Bank PLC Institutional Banking Group
X.X. Xxx 00000
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxx XX0X0XX
Tel: 00-000-000-0000
Fax: 00-000-000-0000
Attention: Xx. Xxx Xxxxxxxx
State Street Bank and Trust Company 0 Xxxxxx Xx Xxxxxxxxx-XXX0X
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxx
The Bank of Nova Scotia Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxx Xxxxxx
The Fuji Bank, Limited Xxx Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxx
2
EXHIBIT C-2
Xxxxxxx Xxxx &Pearman
BARRISTERS & ATTORNEYS
27 September 2000
The Chase Manhattan Bank, as
Administrative Agent under the
Credit Agreement referred to below,
whose address is set out in the Schedule attached hereto (the
"Administrative Agent")
And each of the parties whose names and addresses are set out in the Schedule
attached hereto (together, the "Lenders").
Dear Sirs
LaSalle Re Holdings Limited (the "Company")
We have acted as special legal counsel in Bermuda to the Company in connection
with a guarantee dated 27 September, 2000 given by the Company in favour of The
Chase Manhattan Bank as Administrative Agent in respect of the obligations of
Trenwick Holdings Limited and Trenwick America Corporation under a credit
agreement dated 27 September, 2000 among Trenwick America Corporation, Trenwick
Holdings Limited, the various lending institutions party thereto, The Chase
Manhattan Bank as Administrative Agent, First Union National Bank as Syndication
Agent and Fleet National Bank as Documentation Agent (the "Credit Agreement").
For the purposes of giving this opinion, we have examined a facsimile copy of
the executed Guarantee.
The reference in this opinion to the Guarantee does not include any other
instrument or agreement whether or not specifically referred to therein or
attached as an exhibit or schedule thereto.
We have also reviewed the memorandum of association and the bye-laws of the
Company, each certified by the Assistant Secretary of the Company on 27
September, 2000, minutes of a meeting of its directors held on 25 September,
2000 (the "Minutes"), and such other documents and made such enquiries as to
questions of law as we have deemed necessary in order to render the opinion set
forth below.
1
The Chase Manhattan Bank
27 September 2000
Page: 2
--------------------------------------------------------------------------------
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Guarantee, other than the Company, to
enter into and perform its respective obligations under the Guarantee, (d) the
due execution of the Guarantee by each of the parties thereto, other than the
Company, and the delivery thereof by each of the parties thereto, (e) the
accuracy and completeness of all factual representations made in the Guarantee
and other documents reviewed by us, (f) that the resolutions contained in the
Minutes remain in full force and effect and have not been rescinded or amended,
(g) that the Company is entering into the Guarantee pursuant to the business
purposes set out in its memorandum of association, (h) that there is no
provision of the law of any jurisdiction, other than Bermuda, which would have
any implication in relation to the opinions expressed herein, (i) the validity
and binding effect under New York law (the "Foreign Laws") of the Guarantee
which is expressed to be governed by such Foreign Laws in accordance with its
terms, (j) the validity and binding effect under the Foreign Laws of the
submission by the Company pursuant to the Guarantee to the non-exclusive
jurisdiction of the courts of the State of New York or of the United States of
America for the Southern District of New York (the "Foreign Courts"), (k) that
none of the parties to the Guarantee has carried on or will carry on activities,
other than the performance of its obligations under the Guarantee, which would
constitute the carrying on of investment business in or from within Bermuda and
that none of the parties to the Guarantee, other than the Company, will perform
its obligations under the Guarantee in or from within Bermuda.
The obligations of the Company under the Guarantee (a) will be subject to the
laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise, generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought, (c)
will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or not
applying the Foreign Laws, if and to the extent they constitute the payment of
an amount which is in the nature of a penalty and not in the nature of
liquidated damages. Notwithstanding any contractual submission to the
jurisdiction of specific courts, a Bermuda court has inherent discretion to stay
or allow proceedings in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the Guarantee
which provides for the payment of a specified rate of interest on the amount of
a judgment after the date of judgment or which purports to xxxxxx the statutory
powers of the Company.
2
The Chase Manhattan Bank
27 September, 2000
Page: 3
--------------------------------------------------------------------------------
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and is not to be relied upon by any other person, firm
or entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are of the opinion that:
1. The Company is duly incorporated and existing under the laws of Bermuda
in good standing (meaning solely that it has not failed to make any
filing with any Bermuda governmental authority or to pay any Bermuda
government fee or tax which would make it liable to be struck off the
Register of Companies and thereby cease to exist under the laws of
Bermuda).
2. The Company has the necessary corporate power and authority to enter
into and perform its obligations under the Guarantee. The execution and
delivery of the Guarantee by the Company and the performance by the
Company of its obligations thereunder will not violate the memorandum
of association or bye-laws of the Company or any applicable law,
regulation, order or decree in Bermuda.
3. The Company has taken all corporate action required to authorise its
execution, delivery and performance of the Guarantee. The Guarantee has
been duly executed and delivered by or on behalf of the Company, and
constitutes the valid and binding obligations of the Company in
accordance with the terms thereof.
4. No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or
any sub-division thereof is required to authorise or is required in
connection with the execution, delivery, performance and enforcement of
the Guarantee.
5. There is no income or other tax of Bermuda imposed by withholding or
otherwise on any payment to be made to or by the Company pursuant to
the Guarantee.
6. It is not necessary or desirable to ensure the enforceability in
Bermuda of the Guarantee that it be registered in any register kept
by, or filed with, any governmental authority or regulatory body in
Bermuda. However, to the extent that the Guarantee creates a charge
over assets of the Company, it may be desirable to ensure the priority
in Bermuda of the charge that it be registered in the Register of
Charges in
accordance with Section 55 of the Companies Xxx 0000. On registration,
to the extent that Bermuda law governs the priority of a charge, such
charge will have priority in Bermuda over any unregistered charges
created after 11 July 1984, and over any subsequently registered
charges, in respect of the assets which are the subject of the charge.
A registration fee of $446 will be payable in respect of the
registration.
The Chase Manhattan Bank
27 September, 2000
Page: 4
--------------------------------------------------------------------------------
While there is no exhaustive definition of a charge under Bermuda law,
a charge normally has the following characteristics:
(i) it is a proprietary interest granted by way of security which
entitles the chargee to resort to the charged property only
for the purposes of satisfying some liability due to the
chargee (whether from the chargor or a third party); and
(ii) the chargor retains an equity of redemption to have the
property restored to him when the liability has been
discharged.
However, as the Guarantee is governed by the Foreign Laws, the question
of whether it would possess these particular characteristics would be
determined under the Foreign Laws.
7. The Guarantee wi11 not be subject to ad valorem stamp duty or other
documentary tax in Bermuda.
8. The Lenders and the Administrative Agent will not be deemed to be
resident, domiciled or carrying on business in Bermuda by reason only
of the execution, performance and/or enforcement of the Guarantee by
the Lenders and the Administrative Agent.
9. Each of' the Lenders and the Administrative Agent has standing to bring
an action or proceedings before the appropriate courts in Bermuda for
the enforcement of the Guarantee. It is not necessary or advisable in
order for the Lenders or the Administrative Agent to enforce their
respective fights under the Guarantee, including the exercise of
remedies thereunder, that they be licensed, qualified or otherwise
entitled to carry on business in Bermuda.
10. The Company is not entitled to any immunity under the laws of Bermuda,
whether characterised as sovereign immunity or otherwise, from any
legal proceedings to enforce the Guarantee in respect of itself or its
property.
11. The choice of the Foreign Laws as the governing law of the Guarantee is
a valid choice of law and would be recognised and given effect lo in
any action brought before a court of competent jurisdiction in Bermuda,
except for those laws (i) which such court considers to be procedural
in nature, (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy, as such
term is interpreted under the laws of Bermuda. The submission in the
Guarantee to the non-exclusive jurisdiction of the Foreign Courts is
valid and binding upon the Company.
12. The courts of Bermuda would recognise as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against
the Company based upon the Guarantee under which a sum of money is
payable (other than a sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a
fine or other penalty) and would give a judgment based thereon provided
that (a) such courts had proper
The Chase Manhattan Bank
27 September, 2000
Page 5
--------------------------------------------------------------------------------
jurisdiction over the parties subject to such judgment, (b) such courts did not
contravene the rules of natural justice of Bermuda, (c) such judgment was not
obtained by fraud, (d) the enforcement of the judgment would not be contrary to
the public policy of Bermuda (e) no new admissible evidence relevant to the
action is submitted prior to the rendering of the judgment by the courts of
Bermuda and (f) there is due compliance with the correct procedures under the
laws of Bermuda.
Yours faithfully
/s/ Xxxxxxx Xxxx & Xxxxxxx
-----------------------
Xxxxxxx Xxxx & Xxxxxxx
The Chase Manhattan Bank
27 September, 2000
Page: 6
--------------------------------------------------------------------------------
The Chase Manhattan Bank One Chase Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Chase Manhattan International Limited 0 Xxxxxx Xxxx Xxxxxx
Xxxxxx X0 XX
Xxxxxx Xxxxxxx
First Union National Bank First Union Securities, Inc.
Financial Institutions Group
0000 Xxxxxxxx Xxxxxx, XX 4819
Xxxxxxxxxxxx, XX 00000
X.X.X.
Fleet National Bank 000 Xxxx Xxxxxx Mail
Code XXXX0000
Xxxxxxxx, XX 00000
X.X.X.
Credit Lyonnais New York Branch 1301 Avenue of the Americas,
00xx Xxxxx
Xxx Xxxx, XX 00000
X.X.X.
Dresdner Bank AG, New York Dresdner Bank AG, New York
and Grand Cayman Branches Branch
00 Xxxx Xxxxxx
Xxx Xxxx XX 00000
X.X.X.
National Westminster Bank PLC Institutional Banking Group
X.X. Xxx 00000
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx XX0X 0XX
United Kingdom
State Street Bank and Trust Company 0 Xxxxxx Xx Xxxxxxxxx - XXX0X
Xxxxxx, XX 00000
X.X.X.
The Chase Manhattan Bank
27 September: 2000
Page: 7
--------------------------------------------------------------------------------
SCHEDULE
The Bank of Nova Scotia Xxx Xxxxxxx Xxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
U.S.A.
The Fuji Bank, Limited Two World Trade Center,
79th Floor
New York, NY 10048
U.S.A.
Citibank, NA. 33 Canada Square
Canary Wharf
Xxxxxx Xx0 0XX
Xxxxxx Xxxxxxx
DLJ Capital Funding, Inc. 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X.X.
lNG Bank N.V. 00 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Barclays Bank PLC 00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
EXHIBIT C-3
XXXXX & XxXXXXXX
ATTORNEYS AT LAW
September 27, 2000
To the Administrative Agent
and each of the Banks party to
the Credit Agreement referred to below
Ladies & Gentlemen:
We have acted as special counsel to Trenwick America
Corporation Inc., a Delaware corporation (the "Borrower") and Trenwick Holdings
Limited, a company organized under the laws of the United Kingdom (the "Account
Party"), in connection with the execution and delivery of the Credit Agreement,
dated as of November 24, 1999 and amended and restated as of September 27, 2000,
among the Borrower, the Account Party, the lending institutions listed on the
signature pages thereto (the "Banks"), First Union National Bank, as Syndication
Agent, Fleet National Bank, as Documentation Agent and The Chase Manhattan Bank,
as Administrative Agent (the "Credit Agreement"), and the transactions
contemplated thereby. This opinion is delivered to you at the request of the
Borrower and the Account Party pursuant to Section 5.04 of the Credit Agreement.
Unless otherwise indicated, capitalized terms used herein but not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such documents
as we have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, the following (the documents referred to
in (a), (b), (c) and (d) below, collectively, the "Credit Documents"): (a) the
Credit Agreement, (b) the Notes, (c) the Holdings Guaranty, (d) the Subsidiary
Guaranty, and (e) such other public and corporate documents and records as we
deem necessary or appropriate in connection with this opinion.
In our examination we have assumed that (i) the due
authorization, execution and delivery of the Credit Documents by each party
thereto (other than the Credit Parties), (ii) the Credit Documents constitute
the legal, valid and binding obligation of each party thereto (other
1
than the Credit Parties), (iii) the genuineness of all signatures (other than as
to the Credit Parties), and (iv) the authenticity of all documents submitted to
us as originals and the conformity to original document's of all documents
submitted to us as certified or photostatic copies. In connection with the
opinion set forth in paragraph 1 below, we have with your permission relied
exclusively upon the opinions of (i) Xxxx X. Del Col, General Counsel of the
Borrower, (ii) Lovells, United Kingdom counsel to the Account Party, (iii)
Xxxxxxx, Xxxxxxxx & Xxxxx, Bermuda counsel to Holdings for all matters stated
therein, and (iv) Xxxxxxx, Xxxx & Xxxxxxx, Bermuda, counsel to the Subsidiary
Guarantor. As to questions of fact not independently verified by us we have
relied, to the extent we deemed appropriate, upon representations and
certificates of officers of the Borrower and the Credit Parties, public
officials and other appropriate persons.
Based upon the foregoing, we are of the opinion that:
1. Each Credit Document to which each Credit Party is a party
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms.
2. Neither the execution, delivery or performance by any
Credit Party of the Credit Documents to which it is a party, nor compliance by
it with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein will contravene any applicable provision of
any law, statute, rule or regulation (including, without limitation, Regulations
T, U and X of the Board of Governors of the Federal Reserve System).
3. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
Governmental Authority of the State of New York or the United States (except as
have been obtained or made prior to the date hereof), is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of any Credit Document by any Credit Party or (ii) the legality, validity,
binding effect or enforceability of any such Credit Document against such Credit
Party.
4. No Credit Party is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
5. No Credit Party is a "holding company," or 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.
We are members of the Bar of the State of New York, and we
express no opinion as to the laws of any jurisdiction other than those of the
State of New York and the United States of America.
The foregoing opinions are subject to the following
qualifications and exceptions: (i) the enforceability of the Credit Documents
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting creditors' rights
2
generally, and by general principles of equity, regardless of whether
enforcement is pursuant to a proceeding in equity or at law; (ii) the
enforceability of the indemnification rights in the Credit Documents may be
limited in certain respects by considerations of public policy; (iii) we express
no opinion as to the enforceability of Section 13.17 of the Credit Agreement
relating to an indemnity against loss from a court judgment in another currency;
and (iv) we express no opinion concerning the enforceability of any provision in
the Credit Agreement which requires the Borrower or the Account Party to make
any or all payments thereunder without setoff or counterclaim or any other right
which the Borrower or the Account Party may have.
This opinion is being furnished only to the addressees and is
solely for your benefit in connection with the above transaction. This opinion
may not be relied upon for any other purpose, or relied upon by any other person
for any purpose, without our prior written consent.
Very truly yours,
/s/ Xxxxx & XxXxxxxx
-------------------
Xxxxx & XxXxxxxx
EXHIBIT X-0
Xxxxxxx
00 Xxxxxxx Xxxxxxx
Xxxxxx XX0X 0XX
Tel: x00 (0) 00 0000 0000
Fax: x00 (0) 00 0000 0000
6 October 2000
The Administrative Agent and each of the Banks party to the Credit Agreement
referred tO below as at the date of this tatter
(the "Addressees")
Dear Sirs
TRENWICK HOLDINGS LIMITED
We refer to our opinion latter dated 27 September 2000 (the "Original Opinion
Letter") relating to Trenwick Holdings Limited (the "Account Party") and the
Credit Agreement, dated as of 24 November 1999 and amended and restated as of 27
September 2000 among Trenwick America Corporation (the "Borrower"). the Account
Party, the lending institutions party thereto (the "Banks"). First Union
National Bank, as Syndication Agent, Fleet National Bank, as Documentation Agent
and The Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement').
Unless otherwise indicated capitalised terms used herein but not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
We xxxx now received and reviewed copies of the following documents:
1. the Credit Agreement executed on behalf of Trenwick Holdings Limited,
including Schedule I and Annex I and Annex II thereto, but excluding
any of the exhibits thereto;
2. the Holdings Guaranty executed on behalf of Trenwick Group Limited and
dated as of 27 September 2000 including Schedule 1 thereto, but
excluding any of the annexures thereto.
(together the "Agreements").
We confirm that, having reviewed the Agreements, our opinion as set out in the
Original Opinion Letter remains unchanged, subject to the qualifications and
observations and on the basis of the assumptions set out in the Original Opinion
Letter, save that assumption(s) no longer applies.
This letter is given on the basis that it is to be governed by and construed in
accordance with English law. It is addressed to the Addressees and given for
their sole benefit for the purposes of the Agreements only and may not be
disclosed or quoted to or relied upon by any other person, without our prior
written consent in each specific case. No person (other than the Addressees)
into whose possession a copy of this letter comes may rely on this letter
without our express written consent addressed to him.
Yours faithfully
/s/ Lovells
------------
LOVELLS
Lovells
27 September 2000
The Administrative Agent and each of the Banks party to the Credit Agreement
referred to below as at the date of this opinion letter
(the "Addressees")
Dear Sirs
TRENWICK HOLDINGS LIMITED
1. We have acted as English legal advisers to Trenwick Holdings Limited
(registered number 24883~0) (the "Account Party") in connection with
the entry by the Account Party into the Credit Agreement defined below.
This opinion is delivered to you at the request of the Account Party
pursuant to Section 5.04 of the Credit Agreement, dated as of 24
November 1999 and amended and restated as of 27 September 2000 among
Trenwick America Corporation (the "Borrower"), the Account Party,
the lending institutions party thereto (the "Banks"), First Union
National Bank, as Syndication Agent. Fleet National Bank, as
Documentation Agent and The Chase Manhattan Bank, as Administrative
Agent (the 'Credit Agreement'}. Unless otherwise indicated,
capitalised terms used herein but not otherwise defined herein shall
have the respective meanings set forth in the Credit Agreement.
DOCUMENTS EXAMINED
2. For the purposes of giving this opinion, we have examined the following
documents:
(a) (i) a facsimile copy of the Credit Agreement executed on behalf of
Trenwick Holdings Limited, including Schedule 1 and Annex I and
Annex II thereto, but excluding any of the exhibits hereto;
(ii)a draft of the Holdings Guaranty (document reference: 09/14/00
9:01 Ag/Pg Xxx Xxxx 000000x0) including Schedule 1 thereto, but
excluding any of the annexures thereto;
(b) copies, certified by the Secretary of the Account Party to be true
copies, of its Memorandum and Articles of Association and its
Certificate of Incorporation and Certificate(s) of Incorporation
on Change of Name;
(c) a copy, certified by the Secretary of the Account Party to be a
true copy, of an extract of minutes of a meeting of its Board of
Directors held on 26 September 2000; and
-2 - 27 September 2000
(d) a copy, certified by the Secretary of the Account Party to be a
true copy, of a certificate dated 27 September 2000 of the
Managing Director of the Account Party containing, amongst
other things, specimen signatures of the officers of the Account
Party and certain confirmations in relation to the Agreements.
The documents listed in paragraph 2(a) are referred to collectively as
the "Agreements" and individually as an "Agreement".
3. Except for the documents listed in paragraph 2 above, we have not
examined any contracts or other documents entered into by or affecting
the Account Party or any corporate records of the Account Party. We
have not made any other enquiries or searches concerning the Account
Party (whether within this firm or otherwise), except as mentioned in
paragraph 4 below. In giving this opinion, we have also relied, without
further enquiry, upon the certificate referred to in paragraph 2(d)
above as to all matters set out in such certificate.
SEARCHES
4. We have carried out a search of a microfiche relating to the Account
Party supplied to us by the Companies Registration Office on 25
September 2000 timed at 17:34 which reveals no order or resolution to
wind up the Account Party and no notice of the appointment of an
administrator or receiver of the Account Party. We made a telephone
enquiry to the Companies Registry at the Companies Court in London at
approximately 4:07 pm on 26 September 2000 and requested the Clerk to
carry out a search of the register of winding-up petitions and the
register of administration petitions in relation to the Account Party.
The Clerk confirmed that there were no entries against the Account
Party. We have not conducted any further search, or any search in any
District Registry of the High Court where winding-up petitions may
also be presented in certain cases, and accordingly this opinion is
given on the assumption that such searches (if made) would not reveal
any circumstances which would require amendment of this opinion.
SCOPE OF OPINION
5. This opinion is given only with respect to English law in force at the
date of this letter as applied by English Courts. No opinion is
expressed or implied as to the laws of any other territory as to which
no enquiries have been made or as to European Union law as it affects
any jurisdiction except England and Wales. Statements relating to
United Kingdom taxation are based on English law as currently applied
by the English courts and on generally published practice of the Inland
Revenue applying at the date of this opinion.
ASSUMPTIONS
6. This opinion is based on the assumptions set out in the appendix to
this letter, which we have taken no steps to verify independently.
OPINIONS
7. Based upon and subject to the foregoing, and subject to the
qualifications and observations set out below and to any matters not
disclosed to us, we are of the opinion that:
(a) The Account Party is duly incorporated and validly existing under
English law and has the necessary corporate power to enter into
the Agreements and to exercise its rights and perform its
obligations thereunder. All corporate and other action required by
its Memorandum and Articles of Association to authorise the
execution of the Agreements by the Account Party and the
performance of its obligations thereunder has been duly taken. The
Account Party has duly executed and delivered each Agreement to
which it is a party. Neither the execution, delivery nor
performance by the Account Party of the Agreements to which it is
a party will violate any provision of the Memorandum and Articles
of Association of the Account Party in the form provided to us, as
referenced to a 2(b) above.
-3 - 27 September 2000
(b) Subject to the Agreements being in a proper legal form under the
laws of the State of New York (by which they are expressed to be
governed) and the obligations of the Account Party thereunder
constituting valid and legally binding obligations enforceable
under the laws of the State of New York, then there is no reason
under English law why the obligations of the Account Party
contained in the Agreements will not constitute valid and legally
binding obligations of the Account Party enforceable against it
under English law.
(c) No filings or registrations with any registration office in
England and Wales are necessary to ensure the validity and
legality of the Agreements or their enforceability against the
Account Party.
(d) No approvals, consents, licences, authorisations or exemptions
from any governmental authority or regulatory body in England and
Wales are necessary for the execution, delivery and performance of
any Agreement by the Account Party or to ensure the validity and
Iegally of the Agreements or their enforceability against the
Account Party.
(e) No United Kingdom ad valorem stamp duty or sleep duty reserve tax
is payable by the Account Party on the execution of the Credit
Agreement.
(f) No deduction or withholding for or on account of United Kingdom
taxes will be required to be made from any payment of interest due
by the Account Party to each L/C Bank under the Credit Agreement.
(g) The express choice of the laws of the State of New York to govern
the Agreements and the submission to the non-exclusive
jurisdiction of the courts of the State of New York and the United
States for the Southern District of New York (the "New York
Courts") will be recognised and upheld by an English Court, but
such choice of law and submission will not displace mandatory
rules of law applicable in another jurisdiction with which the
relevant transaction is otherwise solely connected or in which
any dispute with respect to the Agreements is being adjudicated.
To the extent that such mandatory rules affect any part of the
transaction, an English Court is likely to restrict the
application of those rules to the relevant part of the transaction
and to treat the laws of the State of New York as applicable to,
and the New York Courts as having jurisdiction in respect of, the
remainder.
(h) A judgment obtained against the Account Party in the Courts of the
State of New York could not be enforced by registration in the
English Courts, but such judgment would be treated as itself
constituting a cause of action against the Account Party and could
be sued upon in the English Courts. The English Courts should
enter judgment against the Account Party in such proceedings,
provided that:
(i)the original Court had jurisdiction to deliver the original
judgment under its own rules and under the rules of the English
Courts and the original judgment is final and conclusive
between the parties:
(ii) there is payable under the original judgment a definite sum of
money in respect of a cause of action known to English law;
(iii) the original judgment is not for multiple damages or for
taxes or charges of a like nature or fines or other penalties;
- 4 - 27 September 2000
(iv)the original judgment was not obtained by or in proceedings
contrary to natural justice and its enforcement is not
contrary to English public policy;
(v) restrictions have not been imposed under the Protection of
Trading Xxxxxxxxx Xxx 0000 prior to judgment being enforced;
and
(vi)enforcement proceedings are instituted within six years after
the date of the original judgment.
QUALIFICATIONS
8. This opinion is subject to the qualifications stated below. The
expression "enforceable" as used above means that the obligations of
the Account Party created by the Agreements are of a type which English
Courts enforce. It does not mean that those obligations will
necessarily be enforced in all circumstances in accordance with their
terms. In addition, but without limitation:
(a) The opinion set forth above as regards the binding effect and
validity of the Agreements and their enforceability against the
Account Party is subject to all limitations resulting from the
laws of administration, liquidation, insolvency, reorganisation,
suretyship or similar laws of general application affecting
creditors' rights.
(b) The power of an English Court to order specific performance of an
obligation or to grant injunctive relief or any equitable remedy
is discretionary and, accordingly, we express no opinion as to
whether such remedies would be available in respect of any of the
obligations of the Account Party. Specific performance is not
usually ordered and an injunction not usually granted where
damages would be regarded by the Court as an adequate alternative
remedy.
(c) Where any obligations of any person are to be performed or
observed in jurisdictions outside England and Wales, or by a
person subject to the laws of a jurisdiction outside England and
Wales, such obligations may not be enforceable under English law
to the extent that their performance or observance would be
illegal or contrary to public policy under the laws of any such
jurisdiction.
(d) Where any party to the Agreements is vested with a discretion, or
may determine any matter in its opinion, English law may require
that such discretion is exercised reasonably or that such opinion
is based on reasonable grounds.
(e) Enforcement of the rights of the parties under the Agreements may
become time-barred under the Limitation Xxx 0000 or may be or
become subject to defences of set-off or counterclaim, depending
on the relevant facts.
(f) An English Court may refuse to give effect to clause 13.01 of the
Credit Agreement dealing with the cost of litigation brought
before an English Court where such litigation is unsuccessful or
where the Court itself has made an order for costs.
(g) An English Court may enforce a foreign judgment debt denominated
in a currency other than sterling, as a matter of current
procedural practice. However, the judgment debtor may settle the
judgment debt in sterling, applying the rate of exchange current
at the time of payment. Further, in the event of the Account
Party's insolvent liquidation under English law, any foreign
currency claim against the Account Party would be converted into
starting at the date on which the liquidation commenced or is
deemed to have commenced.
(h) Except in those cases where jurisdiction is determined in
accordance with the provisions of the Brussels convention on
Jurisdiction in Civil and Commercial Matters of 1968, an English
Court will normally stay an action where it is shown that it can,
without injustice to the
- 5 - 27 September 2000
claimant, be tried in a more convenient forum. An English Court
may also, at its discretion, order a claimant in an action, if he
is not ordinarily resident in the United Kingdom, to provide
security for costs.
(i) Any provision in the Agreements providing that any calculation,
certification or determination will be conclusive and binding will
not be effective if such calculation, certification or
determination is fraudulent or made on an unreasonable basis, and
it will not necessarily prevent judicial enquiry into the merits
of any claims by any party thereto.
(j) If any provision for the payment or liquidated damages,
compensation, additional interest or similar amounts does not
represent a genuine pre-estimate of the loss or the aggrieved
party, then that provision might be held to be unenforceable on
the grounds that it is a penalty.
(k) We express no opinion on any provisions of the Agreements which
refer to specific laws or regulations of any jurisdiction (other
than England and Wales).
(I) The effectiveness of contract terms seeking to exclude or restrict
the liability of a party for negligence or breach of duty is
limited by the Unfair Contract Terms Xxx 0000.
(m) Provisions as to severability in the Agreements may not be binding
and the question of whether or not any invalid provision may be
severed from other provisions in order to save such ether
provisions would be determined by an English Court at its
discretion.
(n) A term of a written agreement may be varied by oral agreement of
the parties, notwithstanding that such written agreement requires
variations to be made only in writing.
(o) Where a judgment has been given by an English Court or a foreign
Court in respect of the Agreements (or any part of them), the
English Court may hold that the effect of that judgment may
subsume some or all of the obligations under the Agreements. For
example, where a judgment has been given by an English Court in
respect of an obligation contained in the Agreements, the English
Court will assist the aggrieved party to enforce the judgment
debt, but will not permit the aggrieved party to bring fresh
proceedings in respect of the original obligation under the
Agreements. Where the judgment was given lawfully by a foreign
Court of competent jurisdiction, the English Court, even if not
bound to follow the decision of the foreign Court, will be
reluctant to permit the matter to be re-tried in England.
(p) An undertaking to assume liability for non-payment or
insufficiency of United Kingdom stamp duty on any instrument or to
indemnify any person against such liability or such non-payment or
insufficiency is void under Section 117 of the Stamp Xxx 0000. In
addition, an unstamped or insufficiently stamped document is not
admissible in evidence in civil proceedings before an English
Court.
(q) We have taken no account of the effect of the Human Rights Act
1998 (the "Act") (which comes into force on 2 October 2000) on any
laws applicable to the interpretation or enforcement of any
Agreement or on the action by any party in entering into or
performing that Agreement. The Act gives effect to rights and
fundamental freedoms guaranteed under the European Convention on
Human Rights ("Convention rights"). In particular, it is unlawful
for a public authority to act in a way which is incompatible with
a Convention right and, insofar as it is possible to do so,
primary and subordinate legislation must be read and given effect
in a way which is compatible with Convention rights. There is at
present little English case law to provide guidance on how the
overarching Iaw introduced by the Act will apply to different
factual cases.
- 6 - 27 September 2000
OBSERVATIONS
9. We also make the following observations:
(a) We have not consulted the parliamentary debates in Hansard on any
statutory provision relevant to this opinion.
(b) We have assumed that all statutory provisions relevant to this
opinion were validly adopted and are fully enforceable. In
particular, we have not investigated whether any such statutory
provision is contrary to overriding provisions of the law of the
European Union.
(c) We express no opinion as to the correctness of any warranties
given by the Account Party (expressly or impliedly) under or by
virtue of the Agreements, save if and insofar as the matters
warranted are the subject-matter of specific opinions in this
letter.
(d) We have not considered the particular circumstances of any party
to the Agreements (save the Account Party to the extent expressly
stated in thls opinion letter) or the effect of such particular
circumstances on the Agreements or the transactions contemplated
thereby.
(e) The searches referred to in paragraph 4 above will not necessarily
reveal whether or not a resolution has been passed, an appointment
made or proceedings commenced, or a charge or other registrable
document created, since particulars or such matters are not
required to be recorded immediately but only within a specified
period.
BENEFIT OF OPINION
This opinion is given on the basis that it is to be governed by and construed in
accordance with English law. It is addressed to the Addressees and given for
their sole benefit for the purposes of the Agreements only and may not be
disclosed or quoted to or relied upon by any other person, without our prior
written consent in each specific case. No person (other than the Addressees)
into whose possession a copy of this Opinion comes may rely on this opinion
without our express written consent addressed to him.
Yours faithfully
/s/ Lovells
----------------
Lovells
- 7 - 27 September 2000
APPENDIX TO OPINION
in this opinion letter, we have assumed that:
(a) All documents submitted to us as originals are authentic and
complete and all signatures and seals are genuine.
(b) All documents supplied to us as photocopies or facsimile
transmitted copies or other copies conform to the originals and
such originals are authentic and complete.
(c) All documents, forms and notices which should have been delivered
to the Companies Registration Office on behalf of or relating to
the Account Party have been so delivered and the file of records
maintained at the Companies Registration Office concerning the
Account Party, and reproduced on microfiche for public inspection,
was complete, accurate and up-to-date at the time of the search
referred to in paragraph 4 of this opinion letter.
(d) The resolutions contained in the minutes referred to in paragraph
2(c) of this opinion letter were duly passed at a properly
convened, constituted and conducted meeting of duly appointed
directors of the Account Party at which all constitutional,
statutory and other formalities were duly observed (including, if
applicable, those relating to the declaration of directors'
interests or the power of interested directors to vote); such
resolutions have not been amended or rescinded and are in full
force and effect; and the minutes of such meeting referred to in
paragraph 2(c) of this opinion letter are a true record of the
proceedings at such meeting.
(e) The Account Party has entered into the Agreements in good faith
for the purposes of its business and there are reasonable grounds
for believing that the transactions contemplated in the Agreements
will benefit the Account Party.
(f) The Account Party has not passed a resolution for its winding-up
and no proceedings have been instituted or steps taken for the
winding-up of the Account Party or the appointment of an
administrator or receiver in respect of all or any assets of the
Account Party.
(g) No proceedings have been instituted or injunction granted against
the Account party to restrain it from performing any of its
obligations under the Agreements.
(h) The Agreements accurately record all terms agreed between the
parties and none of the Agreements has been terminated or varied
and no obligation under them has been waived.
(i) The documents listed in paragraph 2 of this opinion letter contain
all relevant information which is material for the purposes of our
opinion and there is no other agreement, undertaking,
representation or warranty (oral or written) and no other
arrangement (whether legally binding or not) between all or any of
the parties or any other matter which renders such information
inaccurate, incomplete or misleading or which affects the
conclusions stated in this opinion letter.
(j) Each of the parties (other than the Account Party) to the
Agreements has full corporate capacity, power, authority and legal
right to enter into and perform its obligations under the
Agreements and each such Agreement has been duly authorised,
executed and delivered by such party.
(k) All copies certified and all documents dated earlier than the date
of this opinion letter on which we have expressed reliance remain
accurate, complete and in full force and effect at the date of
this opinion letter.
- 8 - 27 September 2000
(l) The binding effect of the Agreements on the Account Party is not
affected by duress, undue influence or mistake and no Agreement
has been entered into by any party in connection with money
laundering or any other unlawful activity.
(m) All formalities and requirements of the laws of any relevant state
(other than England and Wales), and of any regulatory authority
therein, applicable to the execution, performance, delivery and
enforceability of the Agreements, have been or will be duly
complied with.
(n) No party to the Agreements is resident in or connected with a
territory which is subject to any embargo, sanction or similar
restriction imposed by the United Nations, the Council of the
European Union or the Parliament of the United Kingdom or any
person or body to whom their powers are delegated.
(o) There is no reason under any foreign law applicable to the
Agreements why the selection of the laws of the State of New York
as the governing law of the Agreements and the submission of the
parties to the Agreements to the jurisdiction of the Courts of the
State of New York could be successfully challenged or held to be
invalid.
(p) No law (other than English law) affects any of the conclusions
stated in this opinion letter.
(q) The parties to the Credit Agreement intend the Account Party will
repay each L/C Bank within 364 days for any payment or
disbursement made by such L/C Bank under any Letter of Credit.
(r) The Letters of Credit issued or to be issued under the Credit
Agreement are in a form approved by Lloyd's.
(s) The Holdings Guaranty as executed will not, differ in form and
content from the draft referred to in paragraph 2(a) of this
opinion letter.
Exhibit C-5
September 27, 2000
To the Administrative Agent
and each of the Banks party to
the Credit Agreement referred to below
Ladies and Gentlemen:
I am the General Counsel of Trenwick America Corporation, a Delaware
corporation (the "Borrower"). This opinion is delivered to you pursuant to
Section 5.04 of the Credit Agreement, dated as of November 24, 1999 and amended
and restated as of September 27, 2000 among the Borrower, Trenwick Holdings
Limited, a company organized under the laws of the United Kingdom (the "Account
Party"), the lending institutions party thereto (the "Banks"), First Union
National Bank, as Syndication Agent, Fleet National Bank, as Documentation Agent
and The Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement").
Unless otherwise indicated, capitalized terms used herein but not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of such documents as I
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, the following (the documents referred to
in (a), (b), (c) and (d) below, collectively, the "Credit Documents"): (a) the
Credit Agreement, (b) the Notes, (c) the Holdings Guaranty, (d) the Subsidiary
Guaranty, and (e) such other public and corporate documents and records as I
deem necessary or appropriate in connection with this opinion.
In my examination, I have assumed the genuineness of all signatures
(other than as to the Credit Parties), the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. As to questions of fact not
independently verified by me, I have relied, to the extent I deemed appropriate,
upon representations and certificates of officers of the Borrower, public
officials and other appropriate persons.
1
To the Administrative Agent
and each of the Banks party to
the Credit Agreement
September 27, 2000
Page 2
Based upon the foregoing, I am of the opinion that:
1. Holdings and each of its Subsidiaries (i) is a duly organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its organization, and has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where the failure to be so
qualified is reasonably likely to have a Material Adverse Effect.
2. Each Credit Party has the corporate power and authority to execute,
deliver and carry out the terms and provisions of each of the Credit Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Credit Documents to which it is a
party. Each Credit Party has duly executed and delivered each Credit Document to
which it is a party.
3. Neither the execution, delivery or performance by any Credit Party
of the Credit Documents to which it is a party, nor compliance by it with the
terms and provisions thereof, nor the consummation of the transactions
contemplated therein, (i) will, to the best of my knowledge after due inquiry,
contravene any order, writ, injunction or decree of any court or governmental
instrumentally, (ii) will conflict or be inconsistent with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
Holdings or any of its Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, credit agreement, loan agreement or other material
agreement or instrument to which Holdings or any of its Subsidiaries is a party
or by which it or any of its property or assets are bound or to which it may be
subject of (iii) will violate any provision of the Certificate of Incorporation
or By-Laws of Holdings or any of its Subsidiaries.
4. To the best of my knowledge after due inquiry, there are no actions,
suits or proceedings pending or threatened (i) with respect to any Credit
Document or (ii) with respect to Holdings or any of its Subsidiaries (a) that
could reasonably be expected to have a material adverse effect on the business,
property, assets, operations, liabilities or condition (financial or otherwise)
of Holdings, or of Holdings and its Subsidiaries taken as a whole or (b) that
could reasonably be expected to have a material adverse effect on the rights or
remedies of the Banks or on the ability of any Credit Party to perform its
obligations under the Credit Documents to which it is a party.
2
5. Each Regulated Insurance Company possesses the insurance licenses
which each such Regulated Insurance Company needs to operate its businesses as
presently conducted.
I am a member of the Bar of the State of New York, and I do not hold
myself out as being conversant with, and express no opinion as to, the laws of
any jurisdiction other than those of the United States of America, the State of
New York and the General Corporation Law of the State of Delaware. This opinion
is rendered only with respect to the laws and the rules, regulations and orders
thereunder that are currently in effect.
This opinion is being furnished only to the addresses and is solely for
their benefit in connection with the transaction contemplated by the Credit
Agreement. This opinion may not be relied upon for any other purpose, or relied
upon by any other person, firm or corporation for any purpose, without my prior
written consent.
Very truly yours,
Xxxx X. Del Col
Senior Vice President,
General Counsel and Secretary
EXHIBIT C-6
WHITE & CASE
September 27, 2000
The Administrative Agent and various
lending institutions (collectively, the "Banks") party to the
Credit Agreement referred to below
re: Credit Agreement, dated as of November 24, 1999 and amended and
restated as of September 27, 2000 (the "Credit Agreement"), among
Trenwick America Corporation (the "Borrower"), Trenwick Holdings
Limited (the "Account Party") and the Banks
Ladies and Gentlemen:
We have acted as special counsel to the Banks party to the
Credit Agreement in connection with the execution and delivery of the Credit
Agreement. This opinion is delivered to you pursuant to Section 5.04(v) of the
Credit Agreement. Terms used herein which are defined in the Credit Agreement
shall have the respective meanings set forth in the Credit Agreement unless
otherwise defined herein.
In connection with this opinion, we have examined the
originals, or certified, conformed or reproduction copies, of all records,
agreements, instruments and documents as we have deemed relevant or necessary as
the basis for the opinions hereinafter expressed. In stating our opinion, we
have assumed the genuineness of all signatures on original or certified copies,
the authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed
herein, that the parties to the Credit Agreement have the corporate power and
authority to enter into and perform
the Credit Agreement and that the Credit Agreement has been duly authorized,
executed and delivered by each such party.
Based upon the foregoing, and subject to the limitations set
forth herein, we are of the opinion that the Credit Agreement constitutes the
legal, valid and binding obligation of the Borrower and the Account Party
enforceable in accordance with its terms, except to the extent that enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally and by equity principles
(regardless of whether enforcement is sought in equity or at law).
We have not been requested to render and, with your
permission, we express no opinion as to the applicability to the obligations of
the Borrower and the Account Party under the Credit Agreement of Section 548 of
the Bankruptcy Code and Article 10 of the New York Debtor & Creditor Law
relating to fraudulent transfers and obligations.
This opinion is limited to the federal law of the United
States of America and the law of the State of New York.
Very truly yours,
/s/ White & Case LLP
------------------
White & Case LLP
EXHIBIT D
FORM OF OFFICERS' CERTIFICATE
I, the undersigned, [President/Vice President] of __________,
a [corporation] organized and existing under the laws of ____________ (the
"Company"), do hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to Section 5.05 of
the Credit Agreement, dated as of November 24, 1999, and amended and restated as
of September 27, 2000, among Trenwick America Corporation (the "Borrower"),
Trenwick Holdings Limited (the "Account Party"), the lenders from time to time
party thereto, First Union National Bank, as Syndication Agent, Fleet National
Bank, as Documentation Agent and The Chase Manhattan Bank, as Administrative
Agent (such Credit Agreement, as in effect on the date of this Certificate,
being herein called the "Credit Agreement"). Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his or her name
and has held such office since _________ __, ____.1 The signature written
opposite the name and title of each such officer is his or her genuine
signature.
Name2 Office Signature
-------------- ----------- ------------
-------------- ----------- ------------
-------------- ----------- ------------
-------------- ----------- ------------
3. Attached hereto as Exhibit A is a certified copy of the
[Certificate of Incorporation] of the Company, as filed in [the Office of the
Secretary of State of the State of ________] on ___________, ____, together with
all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the [By-Laws] of the Company which were duly adopted, are in full force and
effect on the date hereof, and have been in effect since
-------------, ----.
------------------------
1 Insert a date prior to the time of any corporate action relating to the Credit
Documents or related documentation.
2 Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate or related documentation.
1
EXHIBIT D
Page 2
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, ____ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Credit Documents to which the Company is party.
[6. On the date hereof, all of the applicable conditions set
forth in Sections 5.02, 5.06, 5.07, 5.09, and 5.13 of the Credit Agreement have
been satisfied.]3
[7. Attached hereto as Exhibit D are true and correct copies
of all LaSalle Business Combination Documents.]4
[6.] [8.] On the date hereof, the representations and
warranties of the Credit Parties contained in the Credit Agreement or in the
other Credit Documents are true and correct in all material respects with the
same effect as though such representations and warranties had been made on the
date hereof, both before and after giving effect to the incurrence of Revolving
Loans and Letters of Credit on the date hereof and the application of the
proceeds thereof, unless stated to relate to a specific earlier date, in which
case such representations and warranties were true and correct in all material
respects as of such earlier date.
[7.] [9.] On the date hereof, no Default or Event of Default
has occurred and is continuing or would result from the Borrowing or the
issuance of the Letters of Credit to occur on the date hereof or from the
application of the proceeds thereof.
[8.] [10.] There is no proceeding for the dissolution or
liquidation of the Company or threatening its existence.
-----------------------------------
3 Insert in Officer's Certificate of Holdings, the Borrower and the Account
Party only.
4 Insert in Officer's Certificate of Holdings only.
2
EXHIBIT D
Page 3
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day
of _________, 2000.
[Name of Credit Party]
By _______________________
Name:
Title:
3
EXHIBIT D
Page 4
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Vice President] of the Company and the
signature above is his or her genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4, 5, and [8] [10] above
are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day
of _______, 2000.
[Name of Credit Party]
By _____________________
Name:
Title:
4
EXHIBIT E
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
November 24, 1999, and amended and restated as of September 27, 2000, among
Trenwick America Corporation (the "Borrower"), Trenwick Holdings Limited (the
"Account Party"), the lending institutions from time to time party thereto,
First Union Bank, as Syndication Agent, Fleet National Bank, as Documentation
Agent and The Chase Manhattan Bank, as Administrative Agent (as amended,
modified or supplemented from time to time, the "Credit Agreement"). Pursuant to
the provisions of Section 4.04(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By
--------------------
Title:
Date: ________ ___, 2000
EXHIBIT F
SUBSIDIARY GUARANTY
GUARANTY, dated as of September 27, 2000 (as amended, modified
or supplemented from time to time, this "Guaranty"), made by each of the
undersigned guarantors (each, a "Guarantor" and, together with any other entity
that becomes a party hereto pursuant to Section 26 hereof, the "Guarantors").
Except as otherwise defined herein, terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Trenwick America Corporation (the "Borrower"),
Trenwick Holdings Limited (the "Account Party" and together with the Borrower,
collectively, the "Obligors"), the financial institutions from time to time
party thereto (the "Banks"), First Union National Bank, as Syndication Agent,
Fleet National Bank, as Documentation Agent and The Chase Manhattan Bank, as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of
November 24, 1999, and amended and restated as of September 27, 2000 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Loans to the Borrower and the issuance of Letters of
Credit for the account of the Account Party, all as contemplated therein (the
Banks and the Administrative Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower may from time to time be party to one or
more Interest Rate Agreements and Other Hedging Agreements with a Bank or an
affiliate of a Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, collectively,
the "Other Creditors," and together with the Bank Creditors, are herein called
the "Creditors");
WHEREAS, each Guarantor is a Subsidiary of Holdings and/or the
Borrower;
WHEREAS, it is a condition to the making of Loans to the
Borrower and the issuance of Letters of Credit for the account of the Account
Party under the Credit Agreement that each Guarantor shall have executed and
delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans by the Borrower and the issuance of Letters of Credit for
the account of the Account Party under the Credit Agreement and the entering
into by the Borrower of Interest Rate Agreements or Other Hedging Agreements
and, accordingly, desires to execute this Guaranty in order to satisfy the
conditions described in the preceding paragraph and to induce the Banks to make
Loans to the Borrower and issue Letters of Credit for the account of the Account
Party and Other Creditors to enter into Interest Rate Agreements or Other
Hedging Agreements with the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:
1
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and all reimbursement obligations
and Unpaid Drawings (including interest thereon) with respect to all Letters of
Credit and (y) all other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities owing by each Obligor to the Bank Creditors under the Credit
Agreement (including, without limitation, indemnities, Fees and interest
thereon) and the other Credit Documents, whether now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement or any
such other Credit Document and the due performance and compliance with the terms
of the Credit Documents by each Obligor (all such principal, interest,
liabilities and obligations under this clause (i), except to the extent
consisting of obligations or liabilities with respect to Interest Rate
Agreements or Other Hedging Agreements, being herein collectively called the
"Credit Document Obligations"); and (ii) to each Other Creditor the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities owing by the Borrower under any Interest Rate Agreements or
Other Hedging Agreements, whether now in existence or hereafter arising, and the
due performance and compliance by the Borrower with all terms, conditions and
agreements contained therein (all such obligations and liabilities being herein
collectively called the "Other Obligations," and together with the Credit
Document Obligations are herein collectively called the "Guaranteed
Obligations"). Each Guarantor understands, agrees and confirms that the
Creditors may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against each Guarantor without proceeding against any other
Guarantor, any Obligor, against any security for the Guaranteed Obligations, or
under any other guaranty covering all or a portion of the Guaranteed
Obligations. All payments by each Guarantor under this Guaranty shall be made on
the same basis as payments by the Obligors are made under Sections 4.02 and 4.03
of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of each Obligor to the Creditors whether or not due or
payable by such Obligor upon the occurrence in respect of such Obligor of any of
the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or to their order, on demand, in lawful
money of the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of any Obligor whether executed by such Guarantor, any other Guarantor, any
other guarantor of the Guaranteed Obligations or by any other party, and the
liability of each Guarantor hereunder shall not be affected or impaired by (a)
any direction as to application of payment by any Obligor or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the Guaranteed Obligations of the
Obligor, (c) any payment on or in reduction of any such other guaranty or
undertaking, (d) any dissolution or termination of, or increase, decrease or
change in personnel by, any Obligor or (e) any payment made to any Creditor on
the Guaranteed Obligations which such Creditor repays any Obligor pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
2
4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor of the Guaranteed
Obligations, or any Obligor, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against any
other Guarantor, any other guarantor of the Guaranteed Obligations, or any
Obligor and whether or not any other Guarantor, any other guarantor of the
Guaranteed Obligations, or any Obligor be joined in any such action or actions.
Each Guarantor waives, to the fullest extent permitted by law, the benefit of
any statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by any Obligor or other circumstance which operates to toll
any statute of limitations as to any Obligor shall operate to toll the statute
of limitations as to each Guarantor.
5. Each Guarantor hereby waives (to the fullest extent
permitted by applicable law) notice of acceptance of this Guaranty and notice of
any liability to which it may apply, and waives promptness, diligence,
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liability, suit or taking of other action by the Administrative Agent or
any other Creditor against, and any other notice to, any party liable thereon
(including such Guarantor or any other guarantor of the Guaranteed Obligations,
or any Obligor).
6. Any Creditor may (except as shall be required by applicable
statute and cannot be waived) at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations, any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the
guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
any Obligor or others or otherwise act or refrain from acting;
3
(d) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Obligor to
creditors of such Obligor;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of any Obligor to the Creditors regardless
of what liabilities of such Obligor remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Agreements or Other Hedging
Agreements entered into by any Obligor and an Other Creditor, the
Credit Documents or any of the instruments or agreements referred to
therein, or otherwise amend, modify or supplement any of the Interest
Rate Agreements or Other Hedging Agreements entered into by any Obligor
and an Other Creditor, the Credit Documents or any of such other
instruments or agreements; and/or
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against any Obligor to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except indefeasible payment in full in cash
of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Creditor would otherwise have. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Creditor to
inquire into the capacity or powers of any Obligor or any of its Subsidiaries or
the officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
4
9. Any indebtedness of each Obligor now or hereafter held by
any Guarantor is hereby subordinated to the indebtedness of such Obligor to the
Creditors; and such indebtedness of each Obligor to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred and is continuing,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Creditors and be paid over to the Creditors on account of the
Guaranteed Obligations, but without affecting or impairing in any manner the
liability of such Guarantor under the other provisions of this Guaranty. Prior
to the transfer by any Guarantor of any note or negotiable instrument evidencing
any indebtedness of any Obligor to such Guarantor, such Guarantor shall xxxx
such note or negotiable instrument with a legend that the same is subject to
this subordination. Without limiting the generality of the foregoing, each
Guarantor hereby agrees with the Creditors that it will not exercise any right
of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
10. (a) Each Guarantor waives any right to require the
Creditors to: (i) proceed against any Obligor, any other Guarantor, any other
guarantor of any Obligor or any other party; (ii) proceed against or exhaust any
security held from any Obligor, any other Guarantor, any other guarantor of any
Obligor or any other party; or (iii) pursue any other remedy in the Creditors'
power whatsoever. Each Guarantor waives (to the fullest extent permitted by
applicable law) any defense based on or arising out of any defense of any
Obligor, any other Guarantor, any other guarantor of any Obligor or any other
party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of any
Obligor, any other Guarantor, any other guarantor of any Obligor or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of any Obligor
other than payment in full of the Guaranteed Obligations. The Creditors may, at
their election, foreclose on any security held by the Administrative Agent or
the other Creditors by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Creditors may have against any Obligor or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in
full. Each Guarantor waives any defense arising out of any such election by the
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of such Guarantor
against any Obligor or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurrence of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of each Obligor's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
5
11. Each Creditor agrees that this Guaranty may be enforced
only by the action of the Administrative Agent, in each case acting upon the
instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least a majority
of the outstanding Other Obligations) and that no other Creditor shall have any
right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the holders of at least a majority of the outstanding
Other Obligations, as the case may be, for the benefit of the Creditors in
accordance with the terms of this Guaranty. Each Creditor further agrees that
this Guaranty may not be enforced against any director, officer, employee,
partner or stockholder of any Guarantor (except to the extent such stockholder
is also a Guarantor hereunder).
12. In order to induce the Banks to make Loans and issue
Letters of Credit pursuant to the Credit Agreement, and in order to induce the
Other Creditors to execute, deliver and perform the Interest Rate Agreements or
Other Hedging Agreements, each Guarantor represents, warrants and covenants
that:
(a) Such Guarantor (i) is a duly organized and validly
existing corporation, limited liability company or partnership, as the
case may be, and is in good standing (to the extent such concept is
relevant in such jurisdiction) under the laws of the jurisdiction of
its organization, and has the corporate, limited liability company or
partnership, as the case may be, power and authority to own its
property and assets and to transact the business in which it is engaged
and presently proposes to engage and (ii) is duly qualified and is
authorized to do business and is in good standing in all jurisdictions
where it is required to be so qualified, except where the failure to be
so qualified is reasonably likely to have a Material Adverse Effect.
(b) Such Guarantor has the corporate, limited liability
company or partnership, as the case may be, power and authority to
execute, deliver and carry out the terms and provisions of this
Guaranty and each other Credit Document to which it is a party and has
taken all necessary corporate, limited liability company or
partnership, as the case may be, action to authorize the execution,
delivery and performance by it of each such Credit Document. Such
Guarantor has duly executed and delivered this Guaranty and each other
Credit Document to which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof or thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is
a party, nor compliance by it with the terms and provisions hereof or
thereof (i) will contravene any applicable provision of any law,
statute, rule or regulation, or any order, writ, injunction or decree
of any court or Governmental Authority, (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement, credit agreement or
other material agreement or other material instrument to which such
Guarantor or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject or
(iii) will violate any provision of the certificate of incorporation or
by-laws (or equivalent organizational documents) of such Guarantor or
any of its Subsidiaries.
6
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption
by, any Governmental Authority, is required to authorize, or is
required in connection with, (i) the execution, delivery and
performance of this Guaranty or any other Credit Document to which such
Guarantor is a party, or (ii) the legality, validity, binding effect or
enforceability of this Guaranty or any other Credit Document to which
such Guarantor is a party (other than any such consent, approval,
license, authorization, validation, filing or registration required in
order for such Guarantor to be in compliance with the Credit Agreement,
which such Guarantor will make or obtain when and as required).
(e) There are no actions, suits or proceedings pending or, to
the knowledge of such Guarantor, threatened with respect to such
Guarantor (i) which has or is reasonably likely to have a Material
Adverse Effect or (ii) that is reasonably likely to have a Material
Adverse Effect on the rights or remedies of the Creditors or on the
ability of such Guarantor to perform its respective obligations to the
Creditors hereunder and under the other Credit Documents to which it is
a party.
13. Each Guarantor covenants and agrees that on and after the
date hereof and until the termination of the Total Commitment, all Interest Rate
Agreements and Other Hedging Agreements and when no Note, Loan or Letter of
Credit is outstanding and all Guaranteed Obligations have been paid in full
(other than indemnities described in Section 13.13 of the Credit Agreement which
are not then due and payable), such Guarantor shall take, or will refrain from
taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained in
Section 3 or 4 of the Holdings Guaranty, and so that no Default or Event of
Default, is caused by the actions of such Guarantor or any of its Material
Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay
all reasonable out-of-pocket costs and expenses of each Creditor in connection
with the enforcement of this Guaranty, and of the Administrative Agent in
connection with any amendment, waiver or consent relating hereto (including,
without limitation, the reasonable fees and disbursements of counsel (including
the allocated costs and expenses of in-house counsel) employed by any of the
Creditors or the Administrative Agent, as the case may be).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
7
16. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and either (x) the Required Banks (or
to the extent required by Section 13.12 of the Credit Agreement, with the
written consent of each Bank) at all times prior to the time on which all Credit
Document Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time on
which all Credit Document Obligations have been paid in full; provided, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors (as
defined below) of such Class of Creditors (it being understood that the addition
or release of any Guarantor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Guarantor other than the Guarantor so
added or released). For the purpose of this Guaranty the term "Class" shall mean
each class of Creditors, i.e., whether (x) the Bank Creditors as holders of the
Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Banks (or all the Banks if required by
Section 13.12 of the Credit Agreement) and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Agreements or Other Hedging
Agreements.
17. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents, Interest Rate Agreements and
Other Hedging Agreements has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Agreement or Other Hedging Agreement
continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor or
to any other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Creditor to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured.
19. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at the address set forth opposite
its signature below and (iii) in the case of any Other Creditor, at such address
as such Other Creditor shall have specified in writing to the Guarantor; or in
any case at such other address as any of the Persons listed above may hereafter
notify the others in writing.
8
20. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including any Obligor), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of any Obligor, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
21. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which such
Guarantor is a party may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, each Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each
Guarantor hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such Guarantor, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Guaranty or any other Credit Document
to which such Guarantor is a party brought in any of the aforesaid courts, that
any such court lacks jurisdiction over such Guarantor. Each Guarantor further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to each Guarantor at its address
set forth in Section 19, such service to become effective 30 days after such
mailing. Each Guarantor hereby irrevocably waives any objection to such service
of process and further irrevocably waives and agrees not to plead or claim in
any action or proceeding commenced hereunder or under any other Credit Document
to which such Guarantor is a party that service of process was in any way
invalid or ineffective. Nothing herein shall affect the right of any of the
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Guaranty or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that such action or proceeding brought in any such
court has been brought in an inconvenient forum.
22. In the event that all of the equity interests of one or
more Guarantors is sold or otherwise disposed of or liquidated in compliance
with the Credit Agreement (or such sale or other disposition or liquidation has
been approved in writing by the Required Banks (or all Banks if required by
Section 13.12 of the Credit Agreement)) and the proceeds of such sale,
disposition or liquidation are applied in accordance with the provisions of the
Credit Agreement, to the extent applicable, such Guarantor shall be released
from this Guaranty and this Guaranty shall, as to each such Guarantor or
Guarantors, terminate, and have no further force or effect (it being understood
and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the equity interests of any Guarantor shall be deemed to be a
sale of such Guarantor for the purposes of this Section 22).
9
23. This Guaranty may be executed in any number of
counterparts and by the 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. A set of counterparts
executed by all the parties hereto shall be lodged with Holdings and the
Administrative Agent.
24. EACH GUARANTOR AND EACH OF THE CREDITORS HEREBY
IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
25. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
26. It is understood and agreed that any Subsidiary of
Holdings that is required to execute a counterpart of this Guaranty after the
date hereof pursuant to Section 4.09 of the Holdings Guaranty shall
automatically become a Guarantor hereunder by executing a counterpart hereof and
delivering the same to the Administrative Agent.
27. It is the desire and intent of each Guarantor and the
Creditors that this Guaranty shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If and to the extent that the obligations of any
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers,
which laws would determine the solvency of such Guarantor by reference to the
full amount of the Guaranteed Obligations at the time of the execution and
delivery of this Guaranty), then the amount of the Guaranteed Obligations shall
be deemed to be reduced and each Guarantor agrees to pay the maximum amount of
the Guaranteed Obligations which would be permissible under applicable law.
28. This Guaranty shall not become effective until the
La Salle Re Business Combination has occurred.
10
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
LA SALLE RE HOLDINGS LIMITED
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Title: Senior Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: /s/ Xxxxxx Xxxxx
--------------------------------
Title: Vice President
11
Exhibit G
FORM OF SOLVENCY CERTIFICATE
I, the undersigned, the chief financial officer of Trenwick
Group Ltd., a company organized and existing under the laws of Bermuda
("Holdings"), do hereby certify on behalf of Holdings that:
1. This Certificate is furnished pursuant to Section 5.17 of
the Credit Agreement, dated as of November 24, 1999, and amended and restated as
of September 27, 2000, among Trenwick America Corporation ("the Borrower"),
Trenwick Holdings Limited (the "Account Party"), the financial institutions from
time to time party thereto (the "Banks"), Fleet National Bank, as Documentation
Agent, First Union National Bank, as Syndication Agent and The Chase Manhattan
Bank, as Administrative Agent (such Credit Agreement, as in effect on the date
of this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall have
the means set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall
have the following definitions:
(a) "Fair Value" shall mean the amount at which the assets, in
their entirety, determined on a going concern basis of Holdings (on a
stand-alone basis), the Borrower (on a stand-alone basis), the Account Party (on
a stand-alone basis) and Holdings and its Subsidiaries (on a consolidated
basis), in each case would change hands between a willing buyer and a willing
seller, within a commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any compulsion to act.
(b) "Present Fair Salable Value" shall mean the amount that
could be obtained by an independent willing seller from an independent willing
buyer if the assets of each of Holdings (on a stand-alone basis), the Borrower
(on a stand-alone basis), the Account Party (on a stand-alone basis) and
Holdings and its Subsidiaries (on a consolidated basis) are sold in an
arm's-length transaction with reasonable promptness under present conditions for
the sale of comparable business enterprises.
The same methodology has been used in determining Fair Value
and Present Fair Salable Value.
(c) "New Financing" shall mean the indebtedness incurred or to
be incurred by Holdings and its Subsidiaries under the Credit Documents
(assuming the utilization by the Borrower and the Account Party of the Total
Commitment under the Credit Agreement) after giving effect to the Transaction
and all the financing contemplated therewith.
(d) "Stated Liabilities" shall mean the recorded liabilities
(including Contingent Liabilities that would be recorded in accordance with
generally accepted accounting principles ("GAAP") consistently applied) of
Holdings (on a stand-alone basis), the Borrower (on a stand-alone basis), the
Account Party (on a stand-alone basis) and Holdings and its Subsidiaries (on a
consolidated basis) in each case at December 31, 1999 after giving effect to the
Transaction, together with (i) the net change in long-term debt (including
current maturities) between December 31, 1999 and the date hereof; and (ii)
without duplication, the amount of all New Financing.
(e) "Contingent Liabilities" shall mean the maximum estimated
amount of liability reasonably like to result from pending litigation, asserted
claims and assessments, guarantees, uninsured risks and other contingent
liabilities of each of Holdings (on a stand-alone basis), the Borrower (on a
stand-alone basis), the Account Party (on a stand-alone basis) and Holdings and
its Subsidiaries (on a consolidated basis) (exclusive of such Contingent
Liabilities to the extent reflected in Stated Liabilities).
(f) "Will be able to pay its Stated Liabilities and Contingent
Liabilities, as they mature," shall mean for the period from the date hereof
through the stated maturity of all New Financing, each of Holdings (on a
stand-alone basis), the Borrower (on a stand-alone basis), the Account Party (on
a stand-alone basis) and Holdings and its Subsidiaries (on a consolidated basis)
will have sufficient assets and cash flow to pay its Stated Liabilities and
Contingent Liabilities as those liabilities mature or otherwise become payable.
(g) "Does not have Unreasonably Small Capital" shall mean for
the period from the date hereof through the stated maturity of all New
Financing, each of Holdings (on a stand-alone basis), the Borrower (on a
stand-alone basis), the Account Party (on a stand-alone basis) and Holdings and
its Subsidiaries (on a consolidated basis) after giving effect to the
Transaction and Indebtedness (including the Loans and Letters of Credit) being
incurred or assumed, is a going concern and has sufficient capital to ensure
that it will continue to be a going concern for such period and to remain a
going concern.
3. For purposes of this Certificate, I, or officers of
Holdings under my direction and supervision, have performed the following
procedures as of and for the periods set forth below:
(a) I have reviewed the financial statements of Holdings
and its Subsidiaries referred to in Section 5.11 of the Credit Agreement.
(b) I have made inquiries of certain other offices of Holdings
and its Subsidiaries that I deemed necessary as a foundation for this
Certificate.
(c) I have read the Credit Documents and the Annexes and
Exhibits thereto.
(d) With respect to Contingent Liabilities, I have made
inquires of certain other officials of Holdings and its Subsidiaries that I
deemed necessary as a foundation for this Certificate.
(e) I have had the Projections, which have been previously
delivered to the Banks, re-examined on the date hereof and considered the effect
thereof on any changes since the date of the preparation hereof and considered
the effect thereon of any changes since the date of the preparation thereof on
the results projected therein. After such review, I hereby certify that in my
opinion the Projections are reasonable and attainable. Furthermore, the
Projections support the conclusions contained in the last paragraph of this
Certificate.
4. Based on and subject to the foregoing, I hereby certify on
behalf of Holdings that, after giving effect to the Transaction and the related
financing transactions (including the incurrence of the New Financing), it is my
informed opinion that as of the date hereof (i) the Fair Value and Present Fair
Salable Value of the assets of Holdings (on a stand-alone basis), the Borrower
(on a stand-alone basis), the Account Party (on a stand-alone basis) and of
Holdings and its Subsidiaries (on a consolidated basis) exceed its and their
Stated Liabilities and Contingent Liabilities; (ii) Holdings (on a stand-alone
basis), the Borrower (on a stand-alone basis), the Account Party (on a
stand-alone basis) and Holdings and its Subsidiaries (on a consolidated basis)
will not have Unreasonably Small Capital; and (iii) Holdings (on a stand-alone
basis), the Borrower (on a stand-alone basis), the Account Party (on a
stand-alone basis) and Holdings and its Subsidiaries (on a consolidated basis)
will be able to pay its Stated Liabilities and Contingent Liabilities as they
mature or otherwise become payable.
IN WITNESS WHEREOF, Holdings has caused its duly authorized
chief financial officers to execute and deliver this ___ day of ____________,
2000.
TRENWICK GROUP LTD.
By____________________________
Name:
Title:
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
DATE: ________, _____
Reference is made to the Credit Agreement described in Item 2
of Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented through, and including the Settlement Date, the "Credit
Agreement"). Unless defined in Annex I attached hereto, terms defined in the
Credit Agreement are used herein as therein defined. _____________ (the
"Assignor") and ______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the Settlement Date which represents the
percentage interest specified in Item 4 of Annex I (the "Assigned Share") of all
of the outstanding rights and obligations under the Credit Agreement, including,
without limitation, [with respect to the Assigned Share of the Total Revolving
Loan Commitment and all rights and obligations with respect to the Assigned
Share of the Revolving Loans]1 [with respect to the Assigned Share of the
outstanding Term Loans]2 [with respect to the Assigned Share of the Total L/C
Commitment and all rights and obligations with respect to the Assigned Share of
all outstanding Letters of Credit]3.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any liens or security interests; (ii)
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 or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents 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 Holdings or
any of its Subsidiaries or the performance or observance by Holdings or any of
its Subsidiaries of any of their respective obligations under the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto.
-------------------------------------------------------
1 Insert for assignments effected prior to the Conversion Date.
2 Insert for assignments effected on or after the Conversion Date.
3 Insert for assignments of any L/C Commitment.
1
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Bank 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; (iii) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement and the other Credit
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (iv) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a Bank;
[and] (v) confirms that it is duly authorized to enter into and perform the
terms of this Assignment and Assumption Agreement[; and (vi) attaches the
Internal Revenue Service forms (and, if applicable, a Section 4.04(b)(ii)
Certificate) described in Section 13.04(b) of the Credit Agreement].
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the
first date upon which each of the following conditions shall have been
satisfied: (i) the execution hereof by the Assignor and the Assignee, (ii) to
the extent required by the Credit Agreement, the receipt of the consent of the
Administrative Agent, the Borrower and the Account Party, (iii) the receipt by
the Administrative Agent of the assignment fee referred to in Section 13.04(b)
of the Credit Agreement, (iv) the recordation by the Administrative Agent of the
assignment effected hereby in the Register [and receipt by the Administrative
Agent, the Borrower and the Account Party of the Internal Revenue Service forms
(and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section
14.04(b) of the Credit Agreement],4 [and (v) issuance of new Letters of Credit
(in replacement of all then outstanding Letters of Credit) by the Administrative
Agent giving effect to such assignment,]5 or such later date as otherwise
specified in Item 5 of Annex I (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to
the Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights
(other than to its rights to indemnification which shall survive as to events
occurring prior to the Settlement Date) and be released from its obligations
under the Credit Agreement, the other Credit Documents and all Letters of
Credit.
-----------------------------------
4 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
5 If the assignment includes an assignment of any part of the Assignor's L/C
Commitment.
2
6. It is agreed that upon the effectiveness hereof, the
Assignee shall be entitled to (w) all interest on the Assigned Share of the
Loans at the rates specified in Item 6 of Annex I, (x) all RL Commitment Fees
(if applicable) on the Assigned Share of the Total Revolving Loan Commitment at
the rate specified in Item 7 of Annex I, (y) all L/C Commitment Fees (if
applicable) on the Assigned Share of the Total L/C Commitment at the rate
specified in Item 8 of Annex 1 and (z) all Letter of Credit Fees (if applicable)
on the Assigned Share of the Total L/C Commitment at the rate specified in Item
9, which such interest and, if applicable, RL Commitment Fees, L/C Commitment
Fees and Letter of Credit Fees shall be paid by the Administrative Agent
directly to the Assignee. It is further agreed that all payments of principal
made on the Assigned Share of the Loans which occur on and after the Settlement
Date will be paid directly by the Administrative Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written, such execution
also being made on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By_________________________
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By_________________________
Name:
Title:
Acknowledged and Agreed:
[THE CHASE MANHATTAN BANK, as Administrative Agent
By____________________________
Name:
Title:
TRENWICK AMERICA CORPORATION
By____________________________
Name:
Title:
TRENWICK HOLDINGS LIMITED
By:
___________________________
Name:
Title:]6
---------------------------------------
6 The consent of the Administrative Agent and, so long as no Default or Event of
Default is then in existence, the Borrower or the Account Party, as the case may
be, is required in connection with assignments of Revolving Loan Commitments,
outstanding Term Loans and/or L/C Commitments pursuant to Section 13.04(b) of
the Credit Agreement (which consents shall not be unreasonably withheld).
3
ANNEX I TO EXHIBIT H
ANNEX I TO ASSIGNMENT AND ASSUMPTION AGREEMENT
1. The Borrower: Trenwick America Corporation (the
"Borrower").
The Account Party: Trenwick Holdings Limited (the "Account Party").
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of November 24, 1999, and amended and
restated as of September 27, 2000, among the Borrower, the Account
Party, the lenders from time to time party thereto, First Union
National Bank, as Syndication Agent, Fleet National Bank, as
Documentation Agent and The Chase Manhattan Bank, as Administrative
Agent.
3. Date of Assignment and Assumption Agreement:
4. Amounts (as of the date of item #3 above):
Outstanding
Principal of
Revolving
Loans] [Revolving Loan L/C Commitment
[Term Loans]1 Commitment]2
------------- --------------- --------------
a. Aggregate Amount $ $ $
for all Banks ------------ ------------- -------------
b. Assigned Share % % %
------------ ------------- -------------
c. Amount of Assigned
Share $ $ $
------------ ------------- -------------
5. Settlement Date: _______________.
------------------------------------
1 If prior to the Conversion Date, insert outstanding principal of Revolving
Loans. If Conversion Date has occurred, insert principal of Term Loans.
2 Insert amounts if assignment effected prior to the Conversion Date.
6. Rate of Interest As set forth in Section 1.08 of the Credit
Agreement (unless or otherwise agreed to by
the Assignor and the Assignee)3
7. R/L Commitment As set forth in Section 3.01(a) of the Credit
Fee: Credit Agreement (unless otherwise agreed to
by the Assignor and the Assignee)4
8. L/C Commitment As set forth in Section 3.01(b) of the Credit
Fee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee.5
9. Letter of Credit As set forth in Section 3.01(c) of the Credit
Fee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee).6
8. Notice:
ASSIGNEE:
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
--------------------------------
3 The Borrower and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the Credit
Agreement, with the Assignor and Assignee effecting any agreed upon sharing of
interest through payments by the Assignee to the Assignor.
4 Insert "Not Applicable" in lieu of text if the Conversion Date has occurred.
Otherwise, the Borrower and the Administrative Agent shall direct the entire
amount of the RL Commitment Fee to the Assignee at the rate set forth in Section
3.01(a) of the Credit Agreement, with the Assignor and the Assignee effecting
any agreed upon sharing of the R/L Commitment Fee through payment by the
Assignee to the Assignor.
5 Insert "Not Applicable" in lieu of text if no portion of the L/C Commitment
is being assigned. Otherwise, the Account Party and the Administrative Agent
shall direct the entire amount of the L/C Commitment Fee to the Assignee at the
rate set forth in Section 3.01(b) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the L/C Commitment Fee through
payment by the Assignee to the Assignor.
6 Insert "Not Applicable" in lieu of text if no portion of the L/C Commitment
is being assigned. Otherwise, the Account Party and the Administrative Agent
shall direct the entire amount of the Letter of Credit Fee to the Assignee at
the rate set forth in Section 3.01(c) of the Credit Agreement, with the Assignor
and the Assignee effecting any agreed upon sharing of the Letter of Credit Fee
through payment by the Assignee to the Assignor.
ASSIGNOR:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone:
Telecopier:
Reference:
9. Payment Instructions:
ASSIGNEE:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNOR:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone:
Telecopier:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By ------------------------ By --------------------------
------------------------ --------------------------
(Print Name and Title) (Print Name and Title)
EXHIBIT I
HOLDINGS GUARANTY
between
TRENWICK GROUP LTD.
and
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
-----------------------------
Dated as of September 27, 2000
-----------------------------
TABLE OF CONTENTS
Page
SECTION 1. The Holdings Guaranty.............................................2
1.01 The Holdings Guaranty..........................................2
1.02 Bankruptcy.....................................................2
1.03 Nature of Liability............................................2
1.04 Holdings Guaranty Absolute.....................................3
1.05 Independent Obligation.........................................3
1.06 Authorization..................................................3
1.07 Reliance.......................................................4
1.08 Subordination..................................................4
1.09 Waivers........................................................4
1.10 Holdings Guaranty Continuing...................................5
1.11 Binding Nature of Guaranties...................................5
1.12 Judgments Binding..............................................5
SECTION 2. Representations, Warranties and Agreements........................6
2.01 Corporate Status...............................................6
2.02 Corporate Power and Authority; Enforceability..................6
2.03 No Contravention of Laws, Agreements or Organizational
Documents......................................................6
2.04 Litigation and Contingent Liabilities..........................7
2.05 Use of Proceeds; Margin Regulations............................7
2.06 Approvals......................................................8
2.07 Investment Company Act.........................................8
2.08 Public Utility Holding Company Act.............................8
2.09 True and Complete Disclosure; Projections and Assumptions......8
2.10 Consummation of Transaction....................................8
2.11 Financial Condition; Financial Statements......................9
2.12 Tax Returns and Payments.......................................9
2.13 Compliance with ERISA.........................................10
2.14 Subsidiaries..................................................11
2.15 Intellectual Property, etc....................................12
2.16 Pollution and Other Regulations...............................12
2.17 Labor Relations; Collective Bargaining Agreements.............12
2.18 Capitalization................................................12
2.19 Indebtedness..................................................13
2.20 Compliance with Statutes, etc.................................13
2.21 Insurance Licenses............................................13
(i)
SECTION 3. Affirmative Covenants............................................13
3.01 Information Covenants.........................................13
3.02 Books, Records and Inspections................................16
3.03 Insurance.....................................................17
3.04 Payment of Taxes..............................................17
3.05 Corporate Franchises..........................................17
3.06 Compliance with Statutes, etc.................................17
3.07 ERISA.........................................................17
3.08 Performance of Obligations....................................19
3.09 Good Repair...................................................19
3.10 End of Fiscal Years; Fiscal Quarters..........................19
3.11 Maintenance of Licenses and Permits...........................19
3.12 Mandatory Prepayments.........................................19
SECTION 4. Negative Covenants...............................................19
4.01 Changes in Business...........................................20
4.02 Fundamental Changes; Acquisitions.............................20
4.03 Liens.........................................................21
4.04 Indebtedness..................................................22
4.05 Advances, Investments and Loans...............................23
4.06 Dividends, etc................................................25
4.07 Transactions with Affiliates..................................26
4.08 Issuance of Stock.............................................26
4.09 Creation of Subsidiaries......................................27
4.10 Partnership Agreements........................................27
4.11 Prepayments of Indebtedness, Modifications of
Agreements, etc...............................................27
4.12 Leverage Ratio................................................27
4.13 Interest Coverage Ratio.......................................27
4.14 Minimum Risk Based Capital....................................27
4.15 Minimum Combined Statutory Surplus............................28
4.16 Minimum Consolidated Tangible Net Worth.......................28
SECTION 5. Miscellaneous....................................................28
5.01 Payment of Expenses, etc......................................28
5.02 Right of Setoff...............................................28
5.03 Notices.......................................................28
5.04 Benefit of the Agreement......................................29
5.05 No Waiver; Remedies Cumulative................................29
5.06 Calculations..................................................29
5.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE..............29
5.08 Counterparts..................................................30
5.09 Headings Descriptive..........................................30
5.10 Amendment or Waiver...........................................31
5.11 Confidentiality...............................................31
(ii)
5.12 WAIVER OF JURY TRIAL..........................................31
5.13 Judgment Currency.............................................31
5.14 Availability of Documents.....................................32
SCHEDULE I - Definitions
ANNEX I - Pension Plans
ANNEX II - Subsidiaries
ANNEX III - Collective Bargaining Agreements
ANNEX IV - Capitalization
ANNEX V - Indebtedness
ANNEX VI - Liens
ANNEX VII - Investments
(iii)
HOLDINGS GUARANTY, dated as of September 27, 2000, made by
TRENWICK GROUP LTD. ("Holdings"). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth on Schedule I attached
hereto.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Trenwick, the Original Banks, the Syndication Agent,
the Documentation Agent and the Administrative Agent are party to the Original
Credit Agreement, dated as of November 24, 1999;
WHEREAS, in connection with the LaSalle Business Combination,
the parties to the Original Credit Agreement have decided to amend and restate
the Original Credit Agreement to, inter alia, (i) substitute the Borrower for
Trenwick as the borrower under the revolving credit facility in the Original
Credit Agreement, (ii) substitute the Account Party for Trenwick as the account
party under the letter of credit facility in the Original Credit Agreement,
(iii) add Holdings and the Borrower as guarantors and (iv) permit the LaSalle
Business Combination;
WHEREAS, the Borrower and the Account Party are Wholly-Owned
Subsidiaries of Holdings;
WHEREAS, it is a condition to the amendment and restatement of
the Original Credit Agreement in the form of the Credit Agreement, and to the
making of Loans to the Borrower and the issuance of Letters of Credit for the
account of the Account Party under such Credit Agreement that Holdings shall
have executed and delivered this Holdings Guaranty;
WHEREAS, the Borrower and/or the Account Party may from time
to time be party to one or more Interest Rate Agreements and Other Hedging
Agreements with a Guaranteed Creditor or a Lending Affiliate of a Guaranteed
Creditor; and
WHEREAS, Holdings will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit for the account of
the Account Party under the Credit Agreement and the entering into by the
Borrower and/or the Account Party of Interest Rate Agreements or Other Hedging
Agreements and, accordingly, desires to execute this Holdings Guaranty in order
to satisfy the conditions described above and to induce the Banks to make Loans
to the Borrower and issue Letters of Credit for the account of the Account Party
and Guaranteed Creditors (and Lending Affiliates thereof) to enter into Interest
Rate Agreements or Other Hedging Agreements with the Borrower and/or the Account
Party;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to Holdings, the receipt and sufficiency of which are hereby
acknowledged, Holdings hereby makes the following representations and warranties
to the Guaranteed Creditors and hereby covenants and agrees with each Guaranteed
Creditor as follows:
-1-
SECTION 1. The Holdings Guaranty.
---------------------
1.01 The Holdings Guaranty. Holdings hereby unconditionally
and irrevocably guarantees as primary obligor and not merely as surety the full
and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all indebtedness of each of the Borrower and the Account
Party to the Guaranteed Creditors under the Credit Agreement and the other
Credit Documents and all Interest Rate Agreements or Other Hedging Agreements
entered into by a Guaranteed Creditor or a Lending Affiliate of a Guaranteed
Creditor. If any or all of the indebtedness of either the Borrower or the
Account Party to the Guaranteed Creditors becomes due and payable under the
Credit Agreement or under such other Credit Documents or Interest Rate Agreement
or Other Hedging Agreements, Holdings unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, on demand, together with any and all
reasonable out-of-pocket expenses which may be incurred by the Administrative
Agent or the Guaranteed Creditors in collecting any of the indebtedness. The
word "indebtedness" is used in this Section 1 in its most comprehensive sense
and means any and all advances, debts, obligations and liabilities of each of
the Borrower and the Account Party arising in connection with the Credit
Agreement or any other Credit Documents or under any Interest Rate Agreement or
Other Hedging Agreement with a Guaranteed Creditor or a Lending Affiliate of a
Guaranteed Creditor, in each case, heretofore, now, or hereafter made, incurred
or created, whether voluntarily or involuntarily, absolute or contingent,
liquidated or unliquidated, determined or undetermined, whether or not such
indebtedness is from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Borrower and the Account Party may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
1.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all indebtedness of each of the
Borrower and the Account Party to the Guaranteed Creditors whether or not due or
payable by the Borrower or the Account Party upon the occurrence of any of the
events specified in Section 9.05 of the Credit Agreement, and unconditionally
and irrevocably promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, in the respective Approved Currency.
1.03 Nature of Liability. The liability of Holdings hereunder
is exclusive and independent of any security for or other guaranty of the
indebtedness of each of the Borrower and the Account Party whether executed by
Holdings, any other guarantor or by any other party, and the liability of
Holdings hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower, the Account Party or by any other party,
or (b) any other continuing or other guaranty, undertaking or maximum liability
of a guarantor or of any other party as to the indebtedness of the Borrower or
the Account Party, or (c) any payment on or in reduction of any such other
guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by either the Borrower or the Account Party, or
(e) any payment made to any Guaranteed Creditor on the indebtedness which such
Guaranteed Creditor repays to either the Borrower or the Account Party pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and Holdings waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
-2-
1.04 Holdings Guaranty Absolute. No invalidity, irregularity
or unenforceability of all or any part of the indebtedness guaranteed hereby or
of any security therefor shall affect, impair or be a defense to this Holdings
Guaranty, and this Holdings Guaranty shall be primary, absolute and
unconditional notwithstanding the occurrence of any event or the existence of
any other circumstances which might constitute a legal or equitable discharge of
a surety or guarantor except payment in full of the indebtedness guaranteed
herein.
1.05 Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor, the
Borrower or the Account Party, and a separate action or actions may be brought
and prosecuted against Holdings whether or not action is brought against any
other guarantor, the Borrower or the Account Party and whether or not any other
guarantor, the Borrower or the Account Party be joined in any such action or
actions. Holdings waives, to the fullest extent permitted by law, the benefit of
any statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by either the Borrower or the Account Party or other
circumstance which operates to toll any statute of limitations as to the
Borrower or the Account Party shall operate to toll the statute of limitations
as to Holdings.
1.06 Authorization. Holdings authorizes the Guaranteed
Creditors without notice or demand, and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or alter,
any of the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Holdings Guaranty herein made shall apply
to the indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness
and sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the indebtedness or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or the Account Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower, the Account Party or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and subordinate the payment of all
or any part thereof to the payment of any liability (whether due or not) of the
Borrower and/or the Account Party to its creditors other than the Guaranteed
Creditors;
-3-
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower or the Account Party to the
Guaranteed Creditors regardless of what liability or liabilities of Holdings,
the Borrower or the Account Party remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Holdings Guaranty or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this Holdings
Guaranty or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of Holdings from its liabilities under this Section 1.
1.07 Reliance. It is not necessary for any Guaranteed
Creditors to inquire into the capacity or powers of the Borrower, the Account
Party or their respective Subsidiaries or the officers, directors, partners or
agents acting or purporting to act on their behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
1.08 Subordination. Any indebtedness of the Borrower and the
Account Party now or hereafter held by Holdings is hereby subordinated to the
indebtedness of such Borrower and such Account Party to the Guaranteed
Creditors; and such indebtedness of the Borrower and Account Party to Holdings,
if the Administrative Agent (at the direction of the Required Banks), after an
Event of Default has occurred, so requests, shall be collected, enforced and
received by Holdings as trustee for the Guaranteed Creditors and be paid over to
the Guaranteed Creditors on account of the indebtedness of the Borrower or such
Account Party to the Guaranteed Creditors, but without affecting or impairing in
any manner the liability of Holdings under the other provisions of this Holdings
Guaranty. Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any indebtedness of the Borrower or the Account Party to Holdings,
Holdings shall xxxx such note or negotiable instrument with a legend that the
same is subject to this subordination.
1.09 Waivers. (a) Holdings waives any right to require any
Guaranteed Creditors to (i) proceed against the Borrower or the Account Party,
any other guarantor or any other party, (ii) proceed against or exhaust any
security held from the Borrower or the Account Party, any other guarantor or any
other party or (iii) pursue any other remedy in any Guaranteed Creditor's power
whatsoever. Holdings waives any defense based on or arising out of any defense
of either the Borrower or the Account Party, any other guarantor or any other
party other than payment in full of the indebtedness, including, without
limitation, any defense based on or arising out of the disability of either the
Borrower or the Account Party, any other guarantor or any other party, or the
unenforceability of the indebtedness or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower or the Account Party
other than to the extent of payment in full of the indebtedness. The Guaranteed
Creditors may, in accordance with the Credit Documents, at their election,
foreclose on any security held by the Administrative Agent or any other
Guaranteed Creditors by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Borrower, the Account Party or any
other party, or any security, without affecting or impairing in any way the
liability of Holdings hereunder except to the extent the indebtedness has been
paid. Holdings waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of Holdings
against the Borrower, the Account Party or any other party or any security.
-4-
(b) Except as otherwise specifically required hereunder,
Holdings waives all presentments, demands for performance, protests and notices,
including, without limitation, notices of nonperformance, notices of protest,
notices of dishonor, notices of acceptance of this Holdings Guaranty, and
notices of the existence, creation or incurring of new or additional
indebtedness. Holdings assumes all responsibility for being and keeping itself
informed of each of the Borrower's and the Account Party's financial condition
and assets, and of all other circumstances bearing upon the risk of non-payment
of the indebtedness and the nature, scope and extent of the risks which Holdings
assumes and incurs hereunder, and agrees that the Guaranteed Creditors shall
have no duty to advise Holdings of information known to them regarding such
circumstances or risks.
(c) Holdings warrants and agrees that each of the waivers set
forth above in this Section 1.09 is made with full knowledge of its significance
and consequences and that if any of such waivers are determined to be contrary
to any applicable law or public policy, such waivers shall be effective only to
the maximum extent permitted by law.
1.10 Holdings Guaranty Continuing. This Holdings Guaranty is a
continuing one and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon. No failure or delay on the part of any Guaranteed Creditors in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Guaranteed Creditors or any subsequent holder of a Note, or issuer of,
or participant in, a Letter of Credit would otherwise have. No notice to or
demand on Holdings in any case shall entitle Holdings to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Guaranteed Creditors or any holder, creator or purchaser to any
other or further action in any circumstances without notice or demand.
1.11 Binding Nature of Guaranties. This Holdings Guaranty
shall be binding upon Holdings and its successors and assigns and shall inure to
the benefit of the Guaranteed Creditors and their successors and assigns.
1.12 Judgments Binding. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the indebtedness and such Guaranteed Creditor
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property, or (b) any settlement or compromise of any such claim effected
by such Guaranteed Creditor with any such claimant (including the Borrower and
the Account Party) then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation hereof or the cancellation of any Note,
or other instrument evidencing any liability of the Borrower or the Account
Party, and Holdings shall be and remain liable to the Guaranteed Creditors
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
-5-
SECTION 2. Representations, Warranties and Agreements. In
order to induce the Administrative Agent and the Banks to enter into the Credit
Agreement and to make the Loans and issue the Letters of Credit as provided
therein, Holdings makes the following representations and warranties on behalf
of itself and its Subsidiaries to, and agreements with, the Banks, all of which
shall survive the execution and delivery of this Holdings Guaranty and the
making of the Loans and the issuance of the Letters of Credit (with the
occurrence of the Restatement Effective Date and the occurrence of each Credit
Event being deemed to constitute a representation and warranty that the matters
specified in this Section 2 are true and correct in all material respects on and
as of the Restatement Effective Date and on the date of each such Credit Event
(after giving effect to the consummation of the Transaction) unless such
representation and warranty expressly indicates that it is being made as of any
other specific date in which case such representation and warranty shall be true
and correct in all material respects as of such other specified date):
2.01 Corporate Status. Each of Holdings and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing (where applicable) under the laws of the jurisdiction of its
organization and has the corporate or other organizational power and authority
to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (ii) has been duly qualified and is
authorized to do business and is in good standing (where applicable) in all
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified is not reasonably likely to have a Material Adverse Effect.
2.02 Corporate Power and Authority; Enforceability. Each
Credit Party has the corporate power and authority to execute, deliver and carry
out the terms and provisions of the Transaction Documents to which it is a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance of the Transaction Documents to which it is a party.
Each Credit Party and each of its Subsidiaries has duly executed and delivered
each Transaction Document to which it is a party and each such Transaction
Document constitutes the legal, valid and binding obligation of such Credit
Party enforceable against such Credit Party in accordance with its terms, except
to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors' rights
generally and general principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law.
2.03 No Contravention of Laws, Agreements or Organizational
Documents. Neither the execution, delivery and performance by any Credit Party
of the Transaction Documents to which it is a party nor compliance with the
terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any Governmental
Authority, (ii) will conflict or be inconsistent with or result in any breach of
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of Holdings or any
of its respective Subsidiaries, pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement, credit agreement or any other material
instrument to which Holdings, or any of its respective Subsidiaries is a party
or by which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws (or equivalent organizational documents) of Holdings or any of its
Subsidiaries; except in the case of clauses (i) and (ii) above (other than with
respect to the Credit Documents), such contraventions, conflicts,
inconsistencies, breaches, defaults or Liens which are not reasonably likely to
have a Material Adverse Effect.
-6-
2.04 Litigation and Contingent Liabilities. (a) There are no
actions, suits or proceedings pending or, to the knowledge of Holdings
threatened in writing involving Holdings or any of its Subsidiaries (including,
without limitation, with respect to the Transaction, the Credit Agreement, this
Holdings Guaranty or any documentation executed in connection therewith or
herewith) (i) which has or is reasonably likely to have a Material Adverse
Effect or (ii) that is reasonably likely to have a material adverse effect on
the rights or remedies of the Banks or on the ability of any Credit Party to
perform its respective obligations to the Banks hereunder and under the other
Credit Documents to which it is, or will be, a party. Additionally, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the making of any Loan or the issuance of the Letter of
Credit hereunder.
(b) Except as fully reflected in the financial statements
described in Section 2.11(b) (including the footnotes thereto), the Indebtedness
incurred under the Credit Agreement and in connection with the Transaction and
all obligations incurred in the ordinary course of business since the date of
the financial statements described in Section 2.11(b), there were as of the
Restatement Effective Date (and after giving effect to the Loans made on such
date), no liabilities or obligations with respect to Holdings or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due), and Holdings knows of any basis for the
assertion against Holdings or any of its Subsidiaries of any such liability or
obligation, which, in the case of any of the foregoing referred to in this
clause (b), either individually or in the aggregate, are or are reasonably
likely to have a Material Adverse Effect.
2.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Loans shall be utilized (i) to repay, on the Restatement Effective Date, all
amounts outstanding under the Original Credit Agreement, (ii) to pay fees and
expenses incurred in connection with the Transaction and (iii) for general
corporate and working capital purposes of the Borrower and its Subsidiaries
(including, without limitation, for mergers and acquisitions permitted
hereunder).
(b) The Letters of Credit shall only be issued for the
benefit of Lloyd's and in support of L/C Supportable Obligations.
-7-
(c) Neither the making of any Loan hereunder, the issuance of
any Letter of Credit, nor the use of the proceeds thereof, will violate or be
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System and no part of the proceeds of any Loan
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock.
2.06 Approvals. Except for filings and approvals made or
obtained on or prior to the Restatement Effective Date and for which the failure
to make or be obtained is not reasonably likely to result in a Material Adverse
Effect (other than with respect to the Credit Documents), no order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic Governmental
Authority is required to authorize or is required in connection with (i) the
execution, delivery and performance of any Transaction Document or (ii) the
legality, validity, binding effect or enforceability of any Transaction
Document.
2.07 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
2.08 Public Utility Holding Company Act. Neither Holdings nor
any of its Subsidiaries is a "holding company," or 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.
2.09 True and Complete Disclosure; Projections and
Assumptions. All factual information (taken as a whole) heretofore or
contemporaneously furnished in writing by Holdings or any of its Subsidiaries
(or by any of their respective agents or representatives) to the Administrative
Agent or any Bank (including, without limitation, all information contained in
the Transaction Documents and in the Confidential Bank Memorandum, but excluding
the Projections and any other projections) for purposes of or in connection with
the Credit Agreement, this Holdings Guaranty or any transaction contemplated
therein or herein is, and all other factual information (taken as a whole)
hereafter furnished by or on behalf of any such Persons in writing to the
Administrative Agent will be, true and accurate in all material respects on the
date as of which such information is dated and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided. The Projections are based on good faith estimates and
assumptions believed by Holdings to be reasonable and attainable at the time
made, it being recognized by the Banks that such Projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such Projections may differ from the projected results.
2.10 Consummation of Transaction. On or before the Restatement
Effective Date, the Transaction has been consummated in accordance with the
terms and conditions of the Transaction Documents and all Legal Requirements.
All consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to consummate the Transaction in accordance
with the terms and conditions of the Transaction Documents and all Legal
Requirements have been, or prior to the time required, will have been, obtained,
given, filed or taken, except in the case of any LaSalle Business Combination
Documents where the failure to consummate the LaSalle Business Combination in
accordance with the terms and conditions thereof and to obtain such consents,
approvals, filings and registrations is not reasonably likely to have a Material
Adverse Effect.
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2.11 Financial Condition; Financial Statements. (a) On and as
of the Restatement Effective Date, on a pro forma basis after giving effect to
the Transaction and all Indebtedness incurred, and to be incurred, on or prior
to the Restatement Effective Date, and Liens created, and to be created, on or
prior to the Restatement Effective Date, in connection with the Credit
Agreement, with respect to each of Holdings (on a stand-alone basis), the
Borrower (on a stand-alone basis), the Account Party (on a stand-alone basis)
and Holdings and its Subsidiaries (on a consolidated basis) (x) the sum of the
assets, at a fair valuation, of each of Holdings (on a stand-alone basis), the
Borrower (on a stand-alone basis), the Account Party (on a stand-alone basis)
and Holdings and its Subsidiaries (on a consolidated basis) will exceed their
debts, (y) Holdings (on a stand-alone basis), the Borrower (on a stand-alone
basis), the Account Party (on a stand-alone basis) and Holdings and its
Subsidiaries (on a consolidated basis) will not have incurred or intended to, or
believe that they will, incur debts beyond their ability to pay such debts as
such debts mature and (z) Holdings (on a stand-alone basis), the Borrower (on a
stand-alone basis), the Account Party (on a stand-alone basis) and Holdings and
its Subsidiaries (on a consolidated basis) will have sufficient capital with
which to conduct its or their business. For purposes of this Section 2.11(a),
"debt" means any liability on a claim, and "claim" means (i) right to payment
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured; or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(b) The financial statements and pro forma balance sheets
(after giving effect to the Transaction and the other transactions contemplated
hereby) delivered to the Administrative Agent pursuant to Section 5.11 of the
Credit Agreement present fairly in all material respects the financial position
of the respective Persons referred to in such Section at the dates of said
statements and the results of operations for the periods covered thereby (or, in
the case of the pro forma balance sheet, present a good faith estimate of the
consolidated pro forma financial condition of such Persons and their respective
Subsidiaries as of the date thereof). All such financial statements have been
prepared in accordance with SAP or GAAP, as indicated in Section 5.11 of the
Credit Agreement, consistently applied except to the extent provided in the
notes to said financial statements.
(c) Since December 31, 1999, nothing has occurred which,
individually or when taken as a whole with other occurrences, has or is
reasonably likely to have a Material Adverse Effect.
2.12 Tax Returns and Payments. Each of Holdings and each of
its Subsidiaries has filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for in
the financial statements of Holdings and each of its Subsidiaries in accordance
with GAAP or SAP, as the case may be. Each of Holdings and each of its
Subsidiaries have paid, or have provided adequate reserves (in the good faith
judgment of the management of such Person) for the payment of, all federal,
state and foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to date. There is no material action, suit, proceeding,
investigation, audit or claim now pending or, to the knowledge of Holdings or
any of its Subsidiaries, threatened by any authority regarding any taxes
relating to Holdings or any of its Subsidiaries. Neither Holdings nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of Holdings or any of its Subsidiaries, or is
aware of any circumstances that would cause the taxable years or other taxable
periods of Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.
-9-
2.13 Compliance with ERISA. (a) Annex I sets forth each Plan
and each Multiemployer Plan as of the Restatement Effective Date; each Plan (and
each related trust, insurance contract or fund) is in substantial compliance
with its terms and with all applicable laws, including without limitation ERISA
and the Code, except to the extent that any such non-compliance could not result
in a material liability; each Plan (and each related trust, if any) which is
intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Multiemployer Plan is insolvent or in reorganization; no
Plan has an Unfunded Current Liability; no Plan which is subject to Section 412
of the Code or Section 302 of ERISA has an accumulated funding deficiency,
within the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; except as would not result in any material liability, all
contributions required to be made with respect to a Plan and each Multiemployer
Plan have been timely made; neither Holdings nor any Subsidiary of Holdings nor
any ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(1), 4062, 4063, 4064, or 4069 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or to or on account of a Multiemployer Plan
pursuant to Section 515, 4201, 4204 or 4212 of ERISA or reasonably expects to
incur any of such liability under any of the foregoing sections with respect to
any Plan or Multiemployer Plan; to Holdings' knowledge no condition exists which
presents a material risk to Holdings or any Subsidiary of Holdings or any ERISA
Affiliate of incurring a material liability to or on account of a Plan or
Multiemployer Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; except as would not
result in any material liability, no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending,
reasonably expected or to Holdings' knowledge threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of Holdings and its Subsidiaries
and its ERISA Affiliates to each Multiemployer Plan in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan ended prior to the date of the most recent Credit Event,
would not exceed $10,000,000; each group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) other than a multiemployer
plan described in Section 3(37) of ERISA maintained or contributed to by
Holdings, a Subsidiary of Holdings or an ERISA Affiliate which covers or has
covered employees or former employees of Holdings, any Subsidiary of Holdings or
any ERISA Affiliate has at all times been operated in compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code except as would not result in any material liability; no lien imposed under
the Code or ERISA on the assets of Holdings or any Subsidiary of Holdings or any
ERISA Affiliate exists or, to Holding's, the Borrower's or the Account Party's
knowledge, is likely to arise on account of any Plan or Multiemployer Plan; and
neither Holdings nor any of its Subsidiaries maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan obligations with respect to which
could reasonably be expected to have a material adverse effect on the ability of
any Credit Party to perform its obligations under the Credit Documents to which
it is a party.
-10-
(b) Except as would not result in a material liability, each
Foreign Pension Plan has been maintained in substantial compliance with its
terms and with the requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required, in good standing
with applicable regulatory authorities. Except as would not result in a material
liability, all contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither Holdings nor any of its Subsidiaries
has incurred any material obligation in connection with the termination of or
withdrawal from any Foreign Pension Plan. Except as set forth in Annex I, the
present value of the accrued benefit liabilities (whether or not vested) under
each Foreign Pension Plan, determined as of the end of each of Holding's, the
Borrower's and the Account Party's most recently ended fiscal year on the basis
of actuarial assumptions, each of which is reasonable, did not exceed the
current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities.
2.14 Subsidiaries. (a) Annex II hereto lists each Subsidiary
of Holdings (and the direct and indirect ownership interest of Holdings therein)
and also identifies the owner thereof in each case existing on the Restatement
Effective Date (after giving effect to the Transaction). Except as set forth on
Annex II, all such Subsidiaries are direct or indirect Wholly-Owned Subsidiaries
of Holdings.
(b) There are no restrictions on Holdings or any of its
Subsidiaries which prohibit or otherwise restrict the transfer of cash or other
assets from any Subsidiary of Holdings to Holdings, any Subsidiary of the
Borrower to the Borrower, or any Subsidiary of the Account Party to the Account
Party, other than prohibitions or restrictions existing under or by reason of
(i) this Holdings Guaranty, the other Credit Documents, the Trenwick Senior
Notes, (ii) Legal Requirements, (iii) customary non-assignment provisions in
contracts entered into in the ordinary course of business and consistent with
past practices, and (iv) purchase money obligations for property acquired in the
ordinary course of business, so long as such obligations are permitted under
this Holdings Guaranty.
-11-
2.15 Intellectual Property, etc. Each of Holdings and each of
its Subsidiaries own or possess the right to use all material patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
respective businesses as presently conducted and as proposed to be conducted.
2.16 Pollution and Other Regulations. Each of Holdings and
each of its Subsidiaries are in compliance with all laws and regulations
relating to pollution and environmental control, equal employment opportunity
and employee safety in all domestic and foreign jurisdictions in which Holdings
and each of its Subsidiaries is presently doing business, and Holdings will
comply and cause each of its Subsidiaries to comply with all such laws and
regulations which may be imposed in the future in jurisdictions in which
Holdings and each its Subsidiaries may then be doing business; in each case
other than those the non-compliance with which is not reasonably likely to have
a Material Adverse Effect.
2.17 Labor Relations; Collective Bargaining Agreements. (a)
Set forth on Annex III is a list and description (including dates of
termination) of all collective bargaining and similar agreements between or
applicable to Holdings and any of its Subsidiaries and any union, labor
organization or other bargaining agent in respect of the employees of Holdings
and/or any of its Subsidiaries on the Restatement Effective Date.
(b) Neither Holdings nor any of its Subsidiaries is engaged in
any unfair labor practice that is reasonably likely to have a Material Adverse
Effect. (i) There is no significant unfair labor practice complaint pending
against Holdings or any of its Subsidiaries or threatened in writing against any
of them, before the National Labor Relations Board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is now pending against Holdings or any of its Subsidiaries
or threatened in writing against any of them, (ii) there is no significant
strike, labor dispute, slowdown or stoppage pending against Holdings or any of
its Subsidiaries or threatened in writing against Holdings or any of its
Subsidiaries and (iii) to the best knowledge of Holdings, no union
representation question exists with respect to the employees of Holdings or any
of its Subsidiaries, except (with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a Material Adverse Effect.
2.18 Capitalization. (a) On the Restatement Effective Date,
and after giving effect to the Transaction and the other transactions
contemplated hereby, the authorized capital stock of Holdings consists of
150,000,000 shares of capital stock comprised of (i) common stock having a $0.10
par value per share, 36,648,022 shares of which shall be issued and outstanding,
and (ii) preferred stock having a $0.10 par value per share, none of which shall
be issued and outstanding. As of the Restatement Effective Date, all such
outstanding shares of Holdings have been duly and validly issued and are fully
paid and nonassessable. On the Restatement Effective Date and after giving
effect to the Transaction and the other transactions contemplated hereby,
Holdings does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock, except for options, warrants
and grants outstanding in the aggregate amounts set forth on Annex IV.
-12-
2.19 Indebtedness. Annex V sets forth a true and complete list
of all Indebtedness outstanding under Sections 4.04(c) and (i) of Holdings and
each of its Subsidiaries as of the Restatement Effective Date (after giving
effect to the Transaction), in each case showing the aggregate principal amount
thereof, the name of the lender in respect thereof and the name of the
respective borrower and any other entity which has directly or indirectly
guaranteed such Indebtedness.
2.20 Compliance with Statutes, etc. Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable environmental laws), except
those the noncompliance with which, in the aggregate, is not reasonably likely
to have a Material Adverse Effect.
2.21 Insurance Licenses. Each Regulated Insurance Company has
obtained and maintains in full force and effect all licenses and permits from
all regulatory authorities necessary to operate in the jurisdictions in which
such Regulated Insurance Company operates, in each case other than such licenses
and permits the failure of which to obtain or maintain, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect.
SECTION 3. Affirmative Covenants. Holdings hereby covenants
and agrees that on the Restatement Effective Date and thereafter, for so long as
the Credit Agreement is in effect and until the Total Commitment and the Letter
of Credit are terminated and all the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:
3.01 Information Covenants. Holdings will furnish or cause
to be furnished to each Bank:
(a) Annual Financial Statements. (i) As soon as available and
in any event within 90 days after the close of each fiscal year of
Holdings (x) the consolidated balance sheet of Holdings and its
Subsidiaries, in each case, as at the end of such fiscal year and the
related consolidated statements of income, of stockholders' equity and
of cash flows for such fiscal year and (y) the consolidating balance
sheet of Holdings and its Subsidiaries as at the end of the fiscal year
and the related consolidating statements of income, of stockholders'
equity and of cash flows for such fiscal year; in each case prepared in
accordance with GAAP and setting forth comparative figures for the
preceding fiscal year, and, in the case of such consolidated
statements, examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to
the scope of audit or as to the status of Holdings and its Subsidiaries
as a going concern, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of
Holdings and its Subsidiaries, which audit was conducted in accordance
with GAAP, such accounting firm has obtained no knowledge of any
Default or Event of Default which has occurred and is continuing or, if
in the opinion of such accounting firm such a Default or Event of
Default has occurred and is continuing, a statement as to the nature
thereof.
-13-
(ii) As soon as available and in any event within 90
days after the close of each fiscal year of each Regulated
Insurance Company which is a Material Subsidiary, the Annual
Statement (prepared in accordance with SAP) for such fiscal
year of such Regulated Insurance Company, as filed with the
Applicable Insurance Regulatory Authority in compliance with
the requirements thereof (or a report containing equivalent
information for any Regulated Insurance Company not so
required to file the foregoing with the Applicable Insurance
Regulatory Authority) together with the opinion thereon of the
Chief Financial Officer or other Authorized Officer of such
Regulated Insurance Company stating that such Annual Statement
presents fairly in all material respects the financial
condition and results of operations of such Regulated
Insurance Company in accordance with SAP.
(iii) As soon as available and in any event within 90
days after the close of each fiscal year of Holdings, a copy
of the "Statement of Actuarial Opinion" and "Management
Discussion and Analysis" for each Regulated Insurance Company
which is a Material Subsidiary and Domestic Subsidiary
(prepared in accordance with SAP) for such fiscal year and as
filed with the Applicable Regulatory Insurance Authority in
compliance with the requirements thereof (or a report
containing equivalent information for any Regulated Insurance
Company not so required to file the foregoing with the
Applicable Regulatory Insurance Authority).
(b) Quarterly Financial Statements. (i) As soon as available
and in any event within 45 days after the close of each of the first
three quarterly accounting periods in each fiscal year of Holdings (x)
the consolidated balance sheet of Holdings and its Subsidiaries at the
end of such fiscal quarter and the related consolidated statements of
income, of stockholders' equity and of cash flows for such quarterly
period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period and (y) the consolidating balance
sheet of Holdings and its Subsidiaries as at the end of such fiscal
quarter and the related consolidating statements of income, of
stockholders' equity and of cash flows for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of
such quarterly period; in each case setting forth comparative figures
for the related periods in the prior fiscal year, and all of which
shall be prepared in accordance with GAAP and certified by the Chief
Financial Officer or other Authorized Officer of Holdings, subject to
changes resulting from normal year-end audit adjustments.
(ii) As soon as available and in any event within 45
days after the close of each of the first three quarterly
accounting periods in each fiscal year of each Regulated
Insurance Company which is a Material Subsidiary, quarterly
financial statements (prepared in accordance with SAP) for
such fiscal period of such Regulated Insurance Company, as
filed with the Applicable Insurance Regulatory Authority,
together with the opinion thereon of the Chief Financial
Officer or other Authorized Officer of such Regulated
Insurance Company stating that such financial statements
present fairly in all material respects the financial
condition and results of operations of such Regulated
Insurance Company in accordance with SAP.
-14-
(c) Financial Plans, etc. No later than 45 days following the
first day of each fiscal year of Holdings, copies of the annual
financial plan or budget for such fiscal year prepared by management of
Holdings for its internal use and distributed to the Board of Directors
of Holdings. Together with each delivery of financial statements
pursuant to Section 3.01(a)(ii) and (b)(ii), a comparison of the
current year to date financial results (other than in respect of the
balance sheets included therein) against the plans required to be
submitted pursuant to this clause (c) shall be presented.
(d) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 3.01(a)(i) and (ii) and
(b)(i) and (ii), a certificate of the Chief Financial Officer or other
Authorized Officer of Holdings to the effect that no Default or Event
of Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall set
forth the calculations required to establish whether Holdings and its
Subsidiaries were in compliance with the provisions of Sections 4.12
through 4.16, inclusive, as at the end of such fiscal year or quarter,
as the case may be.
(e) Notice of Default or Litigation. Promptly, and in any
event within five Business Days after Holdings or any of its
Subsidiaries obtains knowledge thereof, (x) notice of the occurrence of
any event which constitutes a Default or Event of Default, which notice
shall specify the nature thereof, the period of existence thereof and
what action Holdings, the Borrower or the Account Party, respectively,
proposes to take with respect thereto and (y) promptly after Holdings
or any of its Subsidiaries obtains knowledge thereof, notice of any
outstanding litigation or governmental or regulatory proceeding pending
against Holdings or any of its Subsidiaries which is reasonably likely
to have a Material Adverse Effect, or a material adverse effect on the
ability of any Credit Party to perform its respective obligations
hereunder or under any other Credit Document.
(f) Reserve Reports. Promptly upon receipt thereof,
a copy of each report submitted to Holdings or any of its Subsidiaries
by any independent actuary with respect to reserve adequacy.
(g) Reserve Adequacy Report. Promptly following a request from
the Administrative Agent or the Required Banks (which request may only
be made when an Event of Default has occurred and is continuing), a
report prepared by an independent actuarial consulting firm of
recognized professional standing reasonably satisfactory to the
Administrative Agent or the Required Banks, as the case may be,
reviewing the adequacy of reserves of each Regulated Insurance Company
determined in accordance with SAP, which firm shall be provided access
to or copies of all reserve analyses and valuations relating to the
insurance business of each Regulated Insurance Company in the
possession of or available to Holdings or any of its Subsidiaries.
(h) Annual Report or Managed Syndicate. As soon as the
same becomes available, but in any event within 90 days after the
end of each year of account of the Managed Syndicate, the annual
report in respect thereof.
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(i) Business Plan and Realistic Disaster Scenarios for Managed
Syndicate. As soon as the same becomes available, the business plan
prepared in relation to the Managed Syndicate and (if separate) the
Realistic Disaster Scenarios relating thereto.
(j) Syndicate Quarterly Report. As soon as the same
becomes available, the Syndicate Quarterly Report for the Managed
Syndicate.
(k) Other Regulatory Statements and Reports. Promptly (A)
after receipt thereof, copies of all triennial examinations and risk
adjusted capital reports of any Regulated Insurance Company, delivered
to such Person by any Applicable Insurance Regulatory Authority,
insurance commission or similar regulatory authority, (B) after receipt
thereof, written notice of any assertion by any Applicable Insurance
Regulatory Authority or any governmental agency or agencies substituted
therefor, as to a violation of any Legal Requirement by any Regulated
Insurance Company which is reasonably likely to have a Material Adverse
Effect, (C) after receipt thereof, a copy of the final report to each
Regulated Insurance Company from the NAIC for each fiscal year, as to
such Regulated Insurance Company's compliance or noncompliance with
each of the NAIC Tests, (D) after receipt thereof, a copy of any notice
of termination, cancellation or recapture of any Reinsurance Agreement
or Retrocession Agreement to which a Regulated Insurance Company is a
party to the extent such termination or cancellation is reasonably
likely to have a Material Adverse Effect, (E) and in any event within
ten Business Days after receipt thereof, copies of any notice of actual
suspension, termination or revocation of any license of any Regulated
Insurance Company by any Applicable Insurance Regulatory Authority,
including any request by an Applicable Insurance Regulatory Authority
which commits a Regulated Insurance Company to take or refrain from
taking any action or which otherwise affects the authority of such
Regulated Insurance Company to conduct its business, except where such
suspension, termination or revocation is not reasonably likely to have
a Material Adverse Effect, and (F) in any event within ten Business
Days after Holdings or any of its Subsidiaries obtains knowledge
thereof, notice of any actual changes in the insurance laws enacted in
any state in which any Regulated Insurance Company is domiciled which
is reasonably likely to have a Material Adverse Effect.
(l) Other Information. Promptly upon filing thereof with the
SEC or transmission thereof, as the case may be, copies of any final
registrations and documents, and other reports specified in Section 13
and 15(d) of the Exchange Act filed by Holdings or any of its
Subsidiaries (other than any registration statement on Form S-8) and
copies of all financial statements and proxy statements, and material
notices and reports, as Holdings or any of its Subsidiaries shall send
to analysts generally or the holders of their capital stock in their
capacity as such holders (in each case to the extent not theretofore
delivered to the Banks pursuant to this Agreement) and, with reasonable
promptness, such other information or existing documents (financial or
otherwise) as the Administrative Agent or any Bank may reasonably
request from time to time.
3.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or any Bank to visit and inspect any
of the properties or assets of Holdings and its Subsidiaries in whomsoever's
-16-
possession (but only to the extent Holdings or such Subsidiary has the right to
do so to the extent in the possession of another Person), and to examine the
books of account of Holdings and its Subsidiaries and discuss the affairs,
finances and accounts of Holdings and its Subsidiaries with, and be advised as
to the same by, its and their officers and independent accountants and
independent actuaries, if any, all at such reasonable intervals and during
business hours, upon reasonable prior notice and to such reasonable extent as
the Administrative Agent or any Bank may request. All such visits shall be at
the expense of the Administrative Agent or the respective Bank unless and until
a Default or Event of Default exists.
3.03 Insurance. Holdings will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice.
3.04 Payment of Taxes. Holdings will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 4.03(a); provided that neither Holdings nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
3.05 Corporate Franchises. Holdings will do, and will cause
each of its Subsidiaries to do, or cause to be done, all things reasonably
necessary to preserve and keep in full force and effect its respective corporate
existence, rights and authority, except where the failure to do so is not
reasonably likely to have a Material Adverse Effect; provided that any
transaction permitted by Section 4.02 will not constitute a breach of this
Section 3.05.
3.06 Compliance with Statutes, etc. Holdings will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
Government Authorities, in respect of the conduct of its respective business and
the ownership of its respective property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls) other than those the non-compliance with which is not reasonably
likely to have a Material Adverse Effect.
3.07 ERISA. As soon as possible and, in any event, within 15
days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, Holdings will
deliver to each of the Banks a certificate of the chief financial officer of
Holdings setting forth the full details as to such occurrence and the action, if
any, that Holdings, the Borrower, the Account Party, their respective
Subsidiaries or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given or filed by Holdings, the
Borrower, the Account Party or such respective Subsidiary, the Plan
administrator or such ERISA Affiliate, to or with the PBGC or any other
government agency, or a Plan or Multiemployer Plan participant and any notices
received by Holdings, the Borrower, the Account Party, such respective
Subsidiary or such ERISA Affiliate from the PBGC or any other government agency,
-17-
or a Plan or Multiemployer Plan participant with respect thereto: that a
Reportable Event has occurred (except to the extent that Holdings, the Borrower,
or the Account Party has previously delivered to the Banks a certificate and
notices (if any) concerning such event pursuant to the next clause hereof); that
a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may reasonably expected to be or has been made for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; except as
would not result in a material liability that any contribution required to be
made with respect to a Plan, Multiemployer Plan or Foreign Pension Plan has not
been timely made; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability; that proceedings are reasonably expected to be or
have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Multiemployer Plan; that Holdings, any Subsidiary of Holdings or any ERISA
Affiliate will or are reasonably expected to incur any material liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of a Plan under Section 4062, 4063, 4064, or 4069 of ERISA or
with respect to the withdrawal from a Multiemployer Plan under Section 4201,
4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971,
4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code; or that Holdings or
any Subsidiary of Holdings may incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan.
Holdings will deliver to each of the Banks copies of any records, documents or
other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. Holdings will also deliver to each of the
Banks a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of annual reports and
any records, documents or other information required to be furnished to the PBGC
or any other government agency, and any material notices received by any of
Holdings, any of its Subsidiaries or any ERISA Affiliate from any relevant
government agency with respect to any Plan or any Foreign Pension Plan or
received from any government agency or plan administrator or sponsor or trustee
with respect to any Multiemployer Plan shall be delivered to the Banks no later
than 15 days after the date such annual report has been filed with the Internal
Revenue Service or such records, documents and/or information has been furnished
to the PBGC or any other government agency or such notice has been received by
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any of Holdings, any of its Subsidiaries or the ERISA Affiliate, as applicable.
Holdings and each of its Subsidiaries shall ensure that all Foreign Pension
Plans administered by it or into which it makes payments obtains or retains (as
applicable) registered status under and as required by applicable law and is
administered in a timely manner in all respects in compliance with all
applicable laws except where the failure to do any of the foregoing would not be
reasonably likely to result in a material adverse effect upon the business,
operations, condition (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries.
3.08 Performance of Obligations. Holdings will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the terms of each mortgage, indenture, security agreement,
other debt instrument and material contract by which it is bound or to which it
is a party; provided, that the failure to pay any Indebtedness shall not
constitute a breach of this Section 3.08 unless it shall give rise to an Event
of Default under Section 9.04 of the Credit Agreement.
3.09 Good Repair. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses.
3.10 End of Fiscal Years; Fiscal Quarters. Holdings will, for
financial reporting purposes, cause (i) each of its, and each of its Domestic
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Domestic Subsidiaries', fiscal quarters to end on March 31,
June 30, September 30 and December 31 of each year.
3.11 Maintenance of Licenses and Permits. Holdings will, and
will cause each of its Subsidiaries to, maintain all permits, licenses and
consents as may be required for the conduct of its business by any state,
federal or local government agency or instrumentality except where failure to
maintain the same is not reasonably likely to have a Material Adverse Effect.
3.12 Mandatory Prepayments. In the event that any prepayment
is required to be made pursuant to the terms of Section 4.02(i)(b), (c) or (d)
of the Credit Agreement, Holdings will, and will cause its Subsidiaries to, take
all actions necessary to enable the Borrower to make the required prepayment in
a timely manner (including by making the net cash proceeds of any equity
issuance, Asset Sale or Indebtedness incurrence referred to in such Sections
available to the Borrower).
SECTION 4. Negative Covenants. Holdings hereby covenants and
agrees that on the Restatement Effective Date and thereafter, for so long as the
Credit Agreement is in effect and until the Total Commitment and the Letter of
Credit are terminated and all Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder, are paid in full:
-19-
4.01 Changes in Business. Holdings and its Subsidiaries will
not engage in any business other than the property and casualty insurance and
reinsurance business and any other businesses engaged in by Holdings and its
Subsidiaries as of the Restatement Effective Date (after giving effect to the
Transaction) and activities related, ancillary or complimentary thereto.
4.02 Fundamental Changes; Acquisitions. (a) Holdings will not,
and will not permit any of its Material Subsidiaries to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
or sell or otherwise dispose of all or substantially all of its assets to any
other Person, provided that (x) Holdings may merge with another Person if (i)
Holdings is the corporation surviving such merger and (ii) immediately after
giving effect to such merger, no Default or Event of Default shall have occurred
and is continuing; (y) Subsidiaries of Holdings may merge with one another,
provided that Holdings' ownership percentage of the surviving entity is at least
equal to Holdings' ownership percentage of the Subsidiary party to such merger
in which Holdings owns the greater percentage equity interest prior to such
merger; and (z) the Transaction shall be permitted.
(b) Holdings will not, and will not permit any of its
Subsidiaries to, purchase, lease or otherwise acquire (in one transaction or a
series of related transactions) all or any part of the property or assets of any
Person (excluding any purchases, leases or other acquisitions of property or
assets in, and for use in, the ordinary course of business) or agree to do any
of the foregoing at any future time, except that the following shall be
permitted:
(i) The investments, acquisitions and transfers or
dispositions of property permitted pursuant to Section 4.05;
(ii) Any Regulated Insurance Company may enter into any
Insurance Contract, Reinsurance Agreement or Retrocession Agreement in
the ordinary course of business in accordance with its normal
underwriting, indemnity and retention policies, provided that no
Regulated Insurance Company shall enter into any Financial Reinsurance
Agreements unless the Indebtedness arising under such Financial
Reinsurance Agreements is permitted under Section 4.04(i); and
(iii) so long as no Default or Event of Default then exists or
would result therefrom, Holdings and its Subsidiaries may acquire
assets or the capital stock of any Person (any such acquisitions
permitted by this clause (iii), a "Permitted Acquisition"), provided,
that (A) such Person (or the assets so acquired) was, immediately prior
to such acquisition, engaged (or used) primarily in the businesses
permitted pursuant to Section 4.01, (B) each such acquisition shall be
for an amount not greater than the fair market value thereof (as
determined in good faith by the Board of Directors of Holdings), (C)
the aggregate amount (both cash and non-cash, including capital stock
of Holdings) expended by Holdings and its Subsidiaries for Permitted
Acquisitions after the Restatement Effective Date shall not exceed
$400,000,000, (D) on a pro forma basis determined as if such
acquisition had been consummated on the date occurring twelve months
prior to the last day of the most recently ended fiscal quarter of
Holdings, Holdings and its Subsidiaries would have been in compliance
with Sections 4.12 through 4.16 of this Holdings Guaranty as of, or for
the relevant period ended on, the last day of such fiscal quarter, and
(E) on a pro forma basis determined as if such acquisition had been
consummated, the covenants contained in Sections 4.12 through 4.16 will
continue to be met for the twelve-month period following the last day
of the fiscal quarter ended after the date of the consummation of such
acquisition.
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4.03 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Holdings or any of its Subsidiaries whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to
Holdings or any of its Subsidiaries) or assign any right to receive income, or
file or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute relating to
any such property, except:
(a) Liens for taxes and other assessments not yet due or being
contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of
Holdings) have been established;
(b) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's and mechanics' Liens and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business
of Holdings or any of its Subsidiaries or (y) which are being contested
in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property or asset
subject to such Lien;
(c) Cash collateral requirements in respect of outstanding
Letters of Credit pursuant to the Credit Agreement and the other Credit
Documents;
(d) Liens in existence on the Restatement Effective Date which
are listed, and the property subject thereto on the Restatement
Effective Date described, in Annex VI, together with any extensions or
renewals thereof so long as the obligations secured and assets
encumbered by such Liens are not increased in connection with such
extension or renewal by more than $5,000,000 (provided that the
securities subject to any such Lien may be replaced by other securities
of no greater principal amount);
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.08
of the Credit Agreement;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds, Reinsurance
Agreements, Retrocession Agreements and other similar obligations
incurred in the ordinary course of business (exclusive of obligations
in respect of the payment for borrowed money);
-21-
(g) Leases or subleases granted to others not interfering in
any material respect with the business of Holdings or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Holdings Guaranty;
(h) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of Holdings or any of its Subsidiaries;
(i) Liens arising from UCC financing statements regarding
leases not in violation of this Holdings Guaranty;
(j) Liens on pledges or deposits of cash or securities made by
any Regulated Insurance Company as a condition to obtaining or
maintaining any licenses issued to it by any Applicable Insurance
Regulatory Authority;
(k) Liens arising pursuant to purchase money mortgages,
Capital Leases or security interests securing Indebtedness representing
the purchase price (or financing of the purchase price within 90 days
after the respective purchase) of assets acquired after the Restatement
Effective Date, provided that (i) any such Liens attach only to the
assets so purchased, (ii) the Indebtedness secured by any such Lien
does not exceed 100%, nor is less than 80%, of the lesser of the fair
market value or the purchase price of the property being purchased at
the time of the incurrence of such Indebtedness and (iii) the
Indebtedness secured thereby is permitted to be incurred pursuant to
Section 4.04(b);
(l) Liens on property or assets acquired pursuant to an
acquisition, or on property or assets of a Subsidiary of Holdings in
existence at the time such Subsidiary is acquired pursuant to an
acquisition, provided that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 4.04(f) and (ii) such Liens
are not incurred in connection with or in contemplation or anticipation
of such acquisition and do not attach to any other asset of Holdings or
any of its Subsidiaries; and
(m) Liens consisting of customary set-off rights or bankers'
liens on amounts on deposit and securing reimbursement obligations in
respect of letters of credit issued for the account of Holdings or any
of its Subsidiaries, whether arising by contract or operation of law,
to the extent incurred in the ordinary course of business.
4.04 Indebtedness. Holdings will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to the Credit Agreement
and the other Credit Documents;
(b) Capitalized Lease Obligations and Indebtedness of
Holdings and its Subsidiaries incurred pursuant to purchase money
Liens permitted under Section 4.03(k);
-22-
(c) Indebtedness in existence on the Restatement Effective
Date which is listed in Annex V, together with extension, renewal or
refinancing thereof so long as the principal amount of any such
Indebtedness is not increased as a result of any such extension,
renewal or refinancing;
(d) Obligations of any Regulated Insurance Company with
respect to (i) letters of credit securing obligations (A) under
Reinsurance Agreements and (B) required by Lloyd's entered into in the
ordinary course of business of any such Regulated Insurance Company,
(ii) letters of credit issued in lieu of deposits to satisfy Legal
Requirements or (iii) letters of credit or surety bonds issued in lieu
of depositing securities with any Applicable Insurance Regulatory
Authority to satisfy regulatory requirements; in any case to the extent
such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than 10 days following
receipt by Holdings or such Subsidiary of notice of payment on such
letter of credit;
(e) Indebtedness under Interest Rate Agreements or Other
Hedging Agreements entered into in respect of the Obligations or
otherwise in the conduct of its business and not for speculative
purposes;
(f) Indebtedness of Holdings or a Wholly-Owned Subsidiary of
Holdings acquired pursuant to an acquisition (or Indebtedness assumed
at the time of a permitted acquisition of an asset securing such
Indebtedness), and any refinancing of such Indebtedness so long as the
principal amount thereof is not increased, provided that (i) such
Indebtedness was not incurred in connection with or in contemplation of
such acquisition, (ii) such Indebtedness does not constitute
Indebtedness for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute Indebtedness for borrowed money for purposes of this clause
(i), and (iii) at the time of such acquisition, such Indebtedness does
not exceed 10% of the total value of the assets of the Subsidiary so
acquired, or of the assets so acquired, as the case may be;
(g) Indebtedness constituting a loan from Holdings or any
Wholly-Owned Subsidiary to Holdings or any Wholly-Owned Subsidiary;
(h) Indebtedness consisting of senior notes issued by the
Borrower in an aggregate outstanding principal amount not to exceed
$200,000,000, so long as the maturity date of any such senior notes is
no earlier than December 31, 2005; and
(i) Other Indebtedness of Holdings and its Subsidiaries
in an aggregate outstanding principal amount not to exceed $50,000,000
at any time.
4.05 Advances, Investments and Loans. Holdings will not, and
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, except:
-23-
(a) The Transaction shall be permitted;
(b) Holdings and its Subsidiaries may make investments (i) in
accordance with Holdings' and its Subsidiaries' investment guidelines
as in effect on the Restatement Effective Date (in the form delivered
to the Banks on or prior to such date) or (ii) in accordance with
modified investment guidelines from time to time so long as such
modified guidelines are not materially less restrictive on Holdings and
its Subsidiaries than those referred to in clause (i) above;
(c) Holdings and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(d) Loans and advances to employees for business-related
travel expenses, moving expenses and other similar expenses, in each
case incurred in the ordinary course of business;
(e) The transactions described in Section 4.02 shall be
permitted;
(f) Any Regulated Insurance Company may make investments in
companies which are Wholly-Owned Subsidiaries of such Person (or any
other Subsidiary of such Person created or acquired in accordance with
Section 4.09) but only to the extent that any such investment, at the
time made, does not reduce Statutory Surplus of such Regulated
Insurance Company;
(g) Investments pursuant to commitments in effect as of the
Restatement Effective Date and described (as to matter and amount) on
Annex VII;
(h) Investments acquired by Holdings or any of its
Subsidiaries (x) in exchange for any other investment held by Holdings
or such Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
investment, (y) as a result of a foreclosure by Holdings or any of its
Subsidiaries with respect to any secured investment or other transfer
of title with respect to any secured investment in default or (z) in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(i) Investments existing on the Restatement Effective Date
which are identified on Annex VII;
(j) Holdings may acquire and hold obligations of one or more
officers or employees of Holdings or its Subsidiaries in connection
with such officers' or employees' acquisition of shares of capital
stock of Holdings or options to purchase shares of capital stock of
Holdings so long as no cash is paid by Holdings or any of its
Subsidiaries in connection with the acquisition of any such obligations
and such obligations;
(k) Investments consisting of intercompany loans to the extent
permitted under Section 4.04(g);
-24-
(l) Investments by Holdings in Wholly-Owned Subsidiaries, and
investments by Wholly-Owned Subsidiaries in other Wholly-Owned
Subsidiaries;
(m) Investments consisting of prepaid expenses;
(n) Investments consisting of non-cash consideration received
in connection with a sale of assets permitted under Section 4.02 (it
being understood and agreed that the consideration received in respect
of any such asset sale shall be at least 75% cash); and
(o) additional investments (including such additional
investments identified pursuant to this Section 4.05(o) in Annex VII)
in an aggregate outstanding amount not to exceed, at the time any such
investment is made, an amount equal to 5% of the invested assets of
Holdings and its Subsidiaries at such time.
4.06 Dividends, etc. (a) Holdings will not, and will not
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in common stock of such Person) or return any capital
to, its stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem, retire,
purchase or otherwise acquire, directly or indirectly, for a consideration, any
shares of any class of its capital stock now or hereafter outstanding (or any
warrants for or options or stock appreciation rights in respect of any of such
shares), or set aside any funds for any of the foregoing purposes, or purchase
or otherwise acquire or permit any of its Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capital stock of
Holdings or any of its Subsidiaries, as the case may be, now or hereafter
outstanding (or any options or warrants or stock appreciation rights issued by
such Person with respect to its capital stock) (all of the foregoing
"Dividends"), except that:
(i) Any Subsidiary of Holdings may pay cash dividends
to its parent if such parent is Holdings or a Wholly-Owned Subsidiary
of Holdings;
(ii) Holdings may redeem or purchase its capital stock at any
time so long as no Default or Event of Default exists at such time or
would exist immediately after giving effect to such redemption or
purchase;
(iii) Holdings may pay cash dividends on its capital stock in
any fiscal quarter, provided that the aggregate amount of dividends
paid in any fiscal quarter shall not exceed an amount equal to the
greater of (A) $0.26 multiplied by the number of shares of Holdings'
common stock outstanding as of the record date declared by Holdings'
Board of Directors for such fiscal quarter; provided that to the extent
there is more than one record date for such fiscal quarter, the first
record date for such fiscal quarter shall be used in determining the
numbers of shares of such Holdings' common stock outstanding for such
period and (B) an amount, if positive, equal to 50% of Holdings'
Consolidated Net Income for the four most recently completed
consecutive fiscal quarters of Holdings ending on the last day of such
fiscal quarter (taken as one accounting period) divided by four;
provided that no dividends may be paid pursuant to this Section
4.06(a)(iii) if any Default or Event of Default exists at the time of
the payment of such cash dividends or would exist immediately after
giving effect thereto;
-25-
(iv) LaSalle Re Holdings or Holdings may pay regularly accruing
dividends on its LaSalle Preferred Stock in accordance with the terms
thereof so long as no Default or Event of Default exists at such time
or would exist immediately after giving effect to the payment of such
dividend; and
(v)LaSalle Re Holdings or Holdings may pay regularly accruing
dividends on its preferred stock issued pursuant to the terms of the
Cat E Put Securities in accordance with the terms thereof so long as no
Default or Event of Default exists at such time or would exist
immediately after giving effect to the payment of such dividend.
(b) Holdings will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist any encumbrance or
restriction which prohibits or otherwise restricts (i) the ability of any
Subsidiary to (A) pay dividends or make other distributions or pay any
Indebtedness owed to Holdings or any of its Subsidiaries, as applicable, (B)
make loans or advances to Holdings or any Subsidiary, as applicable, (C)
transfer any of its properties or assets to Holdings or any Subsidiary, as
applicable, or (D) guarantee the Obligations or (ii) the ability of Holdings or
any Subsidiary of Holdings to create, incur, assume or suffer to exist any Lien
upon its property or assets to secure the Obligations, other than prohibitions
or restrictions existing under or by reason of (I) this Holdings Guaranty and
the other Credit Documents, (II) the Trenwick Senior Notes (III) and Legal
Requirements.
4.07 Transactions with Affiliates. Holdings will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate (excluding Holdings or any Wholly-Owned
Subsidiary of Holdings) other than on terms and conditions substantially as
favorable to Holdings or such Subsidiary as would be obtainable by Holdings or
such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate.
4.08 Issuance of Stock. (a) Holdings will not directly or
indirectly issue, sell, assign, pledge, or otherwise encumber or dispose of any
shares of its capital stock or other equity securities (or warrants, rights or
options to acquire shares or other equity securities), except (i) the issuance
of common stock (and warrants, options and other rights to acquire common
stock), so long as no Event of Default occurs under Section 9.09 of the Credit
Agreement, (ii) the issuance of preferred stock, so long as (x) no part of such
preferred stock is mandatorily redeemable (whether on a scheduled basis or as a
result of the occurrence of any event or circumstance) and (y) any dividends
associated with such preferred stock are solely payable in kind and (iii) the
issuance of preferred stock in accordance with the terms of the Cat E Put
Securities.
(b) Holdings will not permit any of its Subsidiaries directly
or indirectly to issue, sell, assign, pledge, or otherwise encumber or dispose
of any shares of its capital stock or other equity securities (or warrants,
rights or options to acquire shares or other equity securities) of such
Subsidiary, except (i) to Holdings or to a Wholly-Owned Subsidiary of Holdings,
and (ii) to qualify directors if required by applicable law.
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4.09 Creation of Subsidiaries. Holdings shall not create or
acquire any Subsidiary other than (i) Regulated Insurance Companies which are
direct or indirect Wholly-Owned Subsidiaries of Holdings; and (ii) Non-Regulated
Companies which are not Subsidiaries of any Regulated Insurance Company, so long
as such new Subsidiary executes a counterpart of the Subsidiary Guaranty (to the
extent such Subsidiary is a Domestic Subsidiary and a Material Subsidiary). In
addition, at the request of the Administrative Agent, each new Subsidiary that
is required to execute any Credit Document shall execute and deliver, or cause
to be executed and delivered, all other relevant documentation of the type
described in Section 5 of the Credit Agreement as such new Subsidiary would have
had to deliver if such new Subsidiary were a Credit Party on the Restatement
Effective Date.
4.10 Partnership Agreements. Holdings will not enter into
any partnership agreement as a general partner.
4.11 Prepayments of Indebtedness, Modifications of Agreements,
etc. Holdings will not, and will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary
or optional payment or prepayment or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto money or securities before due for the
purpose of payment when due) or exchange of, any Contingent Interest
Notes or Trust Preferred Notes; and/or
(b) amend or modify (or permit the amendment or modification
of) any of the terms or provisions of the documents or agreements
evidencing or governing the Contingent Interest Notes or the Trust
Preferred Notes.
4.12 Leverage Ratio. Holdings will not permit the ratio of (i)
Consolidated Indebtedness of Holdings to (ii) Consolidated Total Capital of
Holdings at any time to be greater than 0.325:1.00.
4.13 Interest Coverage Ratio. Holdings will not permit the
Interest Coverage Ratio for any Test Period ending during a period set forth
below to be less than the ratio set forth opposite such period below:
Period Ratio
------ -----
Fiscal Year ending 12/31/00 2.50:1.00
Fiscal Year ending 12/31/01 2.75:1.00
Thereafter 3.00:1.00
4.14 Minimum Risk Based Capital. (a) Holdings will not
permit the Risk Based Capital Ratio for Trenwick America Reinsurance Corporation
to be less than 325%.
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(b) Holdings will not permit the Risk Based Capital Ratio for
any Regulated Insurance Company which is a Domestic Subsidiary (other than
Trenwick America Reinsurance Corporation) to be less than 300%.
4.15 Minimum Combined Statutory Surplus. Holdings will not
permit the Regulated Insurance Companies, collectively, on a Combined basis, to
have Statutory Surplus at any time of less than $700,000,000.
4.16 Minimum Consolidated Tangible Net Worth. Holdings will
not permit its Consolidated Tangible Net Worth at any time to be less than the
sum of (i) $560,000,000, plus (ii) 50% of Consolidated Net Income (if positive)
from and after October 1, 2000 to the last day of the then most recently ended
fiscal quarter.
SECTION 5. Miscellaneous.
-------------
5.01 Payment of Expenses, etc. Holdings hereby agrees to pay
all reasonable out-of-pocket costs and expenses of each Guaranteed Creditor in
connection with the enforcement of this Holdings Guaranty, and of the
Administrative Agent in connection with any amendment, waiver or consent
relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including the allocated costs and expenses of in-house
counsel) employed by any of the Guaranteed Creditors or the Administrative
Agent, as the case may be).
5.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and continuance of an Event
of Default, each Guaranteed Creditor is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to Holdings or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Guaranteed
Creditor (including, without limitation, by branches and agencies of such
Guaranteed Creditor wherever located) to or for the credit or the account of
Holdings against and on account of the Obligations and liabilities of Holdings
to such Guaranteed Creditor or any other Guaranteed Creditor under this Holdings
Guaranty or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of Holdings purchased by such
Guaranteed Creditor or any other Guaranteed Creditor pursuant to Section
13.06(b) of the Credit Agreement, and all other claims of any nature or
description arising out of or connected with this Holdings Guaranty or any other
Credit Document, irrespective of whether or not such Guaranteed Creditor shall
have made any demand hereunder and although said Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured. Each Guaranteed
Creditor is hereby designated the agent of all other Guaranteed Creditors for
purposes of effecting set off pursuant to this Section 5.02 and Holdings hereby
grants to each Guaranteed Creditor for such Guaranteed Creditor's own benefit
and as agent for all other Guaranteed Creditors a continuing security interest
in any and all deposits, accounts or moneys of Holdings maintained from time to
time with such Guaranteed Creditor.
5.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including facsimile communication) and mailed, telecopied or delivered, if to
Holdings, at the address specified opposite its signature below; if to any Bank,
at its address specified for such Bank on Annex II to the Credit Agreement; or,
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at such other address as shall be designated by any party in a written notice to
the other parties hereto. All such notices and communications shall be mailed,
telecopied, sent by overnight courier or delivered by hand and shall be deemed
to have been given on the date of receipt if delivered by hand or overnight
courier or sent by telecopy, or the date that is five Business Days after being
deposited in the mail, postage prepaid, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 5.03 or in
accordance with the last unrevoked notice from such party given in accordance
with this Section 5.03; provided that notices and communications to the
Administrative Agent shall be effective when received by the Administrative
Agent.
5.04 Benefit of the Agreement. This Holdings Guaranty shall be
binding upon Holdings and its successors and assigns and shall inure to the
benefit of the Guaranteed Creditors and their successors and assigns.
5.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Guaranteed Creditor in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
Holdings and any Guaranteed Creditor shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which any Guaranteed Creditor would
otherwise have. No notice to or demand on Holdings in any case shall entitle
such Person to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Guaranteed Creditors
to any other or further action in any circumstances without notice or demand.
5.06 Calculations. The financial statements to be furnished to
the Banks pursuant hereto shall be made and prepared in accordance with GAAP or
SAP, as the case may be, consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Holdings to the Banks). In addition, except as otherwise specifically
provided herein, all computations determining compliance with Section 4,
including definitions used therein, shall utilize accounting principles and
policies in effect from time to time; provided that (i) if any such accounting
principle or policy (whether GAAP or SAP or both) shall change after the
Restatement Effective Date, Holdings shall give reasonable notice thereof to the
Administrative Agent and each of the Banks and if within 30 days following such
notice Holdings, the Administrative Agent or the Required Banks shall elect by
giving written notice of such election to the other parties hereto, such
computations shall not give effect to such change unless and until the Holdings
Guaranty shall be amended pursuant to Section 13.12 of the Credit Agreement to
give effect to such change, and (ii) if at any time the computations determining
compliance with Section 4 utilize accounting principles different from those
utilized in the financial statements then being furnished to the Banks pursuant
to Section 3.01, such financial statements shall be accompanied by
reconciliation work-sheets.
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5.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a)
THIS HOLDINGS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS HOLDINGS GUARANTY
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
HOLDINGS GUARANTY, HOLDINGS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS. HOLDINGS HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK JURISDICTION OVER HOLDINGS, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS HOLDINGS GUARANTY
BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION
OVER HOLDINGS. HOLDINGS FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
HOLDINGS AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 5.03, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. HOLDINGS HEREBY IRREVOCABLY WAIVES
ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING HEREUNDER THAT SERVICE
OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST HOLDINGS IN ANY OTHER JURISDICTION.
(b) HOLDINGS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS HOLDINGS GUARANTY
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
5.08 Counterparts. This Holdings Guaranty may be executed in
any number of counterparts and by the 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. A set of
counterparts executed by all the parties hereto shall be lodged with Holdings
and the Administrative Agent.
5.09 Headings Descriptive. The headings of the several
sections and subsections of this Holdings Guaranty are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Holdings Guaranty.
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5.10 Amendment or Waiver. Neither this Holdings Guaranty nor
any provision hereof may be changed, waived, discharged or terminated except
with the written consent of Holdings and the Required Banks (or to the extent
required by Section 13.12 of the Credit Agreement, with the written consent of
each Bank).
5.11 Confidentiality. The Administrative Agent and each Bank
shall hold all non-public information furnished by or on behalf of Holdings in
connection with such Bank's evaluation of whether to become a Bank hereunder or
obtained by such Bank pursuant to the requirements of the Credit Documents
("Confidential Information") in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking or lending practices; provided that any Bank and/or its affiliates
may disclose any such Confidential Information (a) to their respective
affiliates, directors, officers, employees, auditors or counsel for purposes
related to the Credit Documents and the transactions contemplated thereby,
provided that the Bank disclosing such confidential information pursuant to this
clause (a) shall remain liable for any non-permitted disclosure of such
information by any such employee, director, agent, attorney, accountant or
professional advisor, (b) as has become generally available to the public other
than as a result of disclosure in violation of this Section 5.11, (c) as has
become available to such Bank or any such affiliate on a non-confidential basis
from a source other than Holdings and their respective affiliates, provided that
the source is not known by such Bank to be prohibited from transmitting such
information to such Bank by a contractual, legal or fiduciary obligation, (d) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank and/or its affiliates, (e) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation or other judicial process (it being understood that, to the extent
reasonably practicable and legally permitted under the circumstances, Holdings
shall be given prior notice and an opportunity to contest any proposed
disclosure pursuant to this clause (e)), (f) in order to comply with any law,
order, regulation or ruling applicable to such Bank and/or its affiliates, and
(g) to any permitted prospective or actual syndicate member or participant in
the Loans, provided that such prospective or actual syndicate member or
participant agrees with the respective assigning Bank to be bound by the
provisions of this Section 5.11. The provisions of this Section 5.11 shall
survive any termination of this Holdings Guaranty.
5.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
HOLDINGS GUARANTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS HOLDINGS
GUARANTY, THE CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
5.13 Judgment Currency. (a) Holdings' Obligations hereunder
and under the other Credit Documents to make payments in the applicable Approved
Currency (the "Obligation Currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent
or the respective Bank of the full amount of the Obligation Currency expressed
to be payable to the Administrative Agent or such Bank under this Holdings
Guaranty or the other Credit Documents. If, for the purpose of obtaining or
enforcing judgment against Holdings in any court or in any jurisdiction, it
becomes necessary to convert into or from a Judgment Currency, an amount due in
the Obligation Currency, the conversion shall be made at the Relevant Currency
Equivalent, and, in the case of other currencies, the rate of exchange (as
quoted by the Administrative Agent or if the Administrative Agent does not quote
a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent) determined, in each case, as of the
Judgment Currency Conversion Date.
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(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, Holdings jointly and severally covenants and agrees to pay, or
cause to be paid, such additional amounts, if any (but in any event not a lesser
amount) as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.
(c) For purposes of determining the Relevant Currency
Equivalent or any other rate of exchange for this Section, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.
5.14 Availability of Documents. Holdings acknowledges that an
executed (or conformed) copy of each of the Credit Documents, Interest Rate
Agreements and Other Hedging Agreements has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Holdings Guaranty to be duly executed and delivered as of
the date first above written.
TRENWICK GROUP LTD.
By: /s/ Xxxxx X. Xxxxxx, Xx.
-------------------------
Title: Chairman, President
and Chief Executive
Officer
Accepted and Agreed to:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Title: Vice President
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SCHEDULE I
DEFINITIONS
"Account Party" shall have the meaning provided in the first
paragraph of the Credit Agreement.
"Administrative Agent" shall have the meaning provided in the
first paragraph of the Credit Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09 of the Credit
Agreement.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(ii)(b) of the Credit Agreement.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Alternate Currency" shall mean each Primary Alternate
Currency and each Other Alternate Currency.
"Alternate Currency Letter of Credit" shall mean the Letter of
Credit to the extent denominated in an Alternate Currency.
"Alternate Currency Loan" shall mean any Revolving Loan
denominated in an Alternate Currency.
"Annual Statement" shall mean the annual financial statement
required to be filed by any Regulated Insurance Company with the Applicable
Insurance Regulatory Authority.
"Applicable Commitment Fee Percentage" shall mean, for any
day, the percentage set forth below opposite the Applicable Period then in
effect:
Applicable Period Applicable Commitment Fee Percentage
Category A Period 0.200%
Category B Period 0.250%
Category C Period 0.300%
Category D Period 0.375%
Category E Period 0.500%
"Applicable Credit Rating" shall mean (i) the Moody's Credit
Rating and the S&P Credit Rating, if the same; (ii) if the Moody's Credit Rating
and the S&P Credit Rating differ by one rating level, the higher of such
Ratings; and (iii) if the Moody's Credit Rating and the S&P Credit Rating differ
by two or more rating levels, the Applicable Credit Rating shall be one rating
level below the higher of such Ratings. If only one Rating Agency rates the
senior unsecured debt of the Borrower, such rating shall be the Applicable
Credit Rating unless the other Rating Agency ceased rating such senior unsecured
debt at the request of the Borrower, in which case the Applicable Credit Rating
shall be deemed to be below BBB-/Baa3.
"Applicable Insurance Regulatory Authority" shall mean, when
used with respect to any Regulated Insurance Company, (x) the insurance
department or similar administrative authority or agency located in each state
or other jurisdiction (foreign or domestic) in which such Regulated Insurance
Company is domiciled, (y) the insurance department, authority or agency in each
state or other jurisdiction (foreign or domestic) in which such Regulated
Insurance Company is licensed, to the extent it has regulatory jurisdiction over
such Regulated Insurance Company, and (z) any Federal or national insurance
regulatory department, authority or agency that may be created and that has
regulatory jurisdiction over such Regulated Insurance Company.
"Applicable Lloyd's Coming in Line Date" shall mean the
Lloyd's Coming in Line Date occurring in November, 2000; provided that if in any
year in which the Applicable Lloyd's Coming in Line Date is scheduled to occur,
the expiration date of any Letter of Credit is extended in accordance with the
terms thereof as provided in Section 2.05(a) of the Credit Agreement, then the
Applicable Lloyd's Coming in Line Date shall be extended to the Lloyd's Coming
in Line Date occurring in the immediately succeeding year (e.g., if in 2000, the
expiration date of any Letter of Credit is extended from December 31, 2004 to
December 31, 2005 as provided in Section 2.05(a) of the Credit Agreement, the
Applicable Lloyd's Coming in Line Date shall be extended from the Lloyd's Coming
in Line Date occurring in November, 2000 to the Lloyd's Coming in Line Date
occurring in November, 2001).
"Applicable Margin" shall mean, for any day, the rate per
annum set forth below opposite the Applicable Period then in effect:
Applicable Margin
Applicable Period Eurodollar Loans Base Rate Loans
Category A Period 1.10% 0.00%
Category B Period 1.30% 0.05%
Category C Period 1.50% 0.25%
Category D Period 1.75% 0.50%
Category E Period 2.00% 0.75%
"Applicable Period" shall mean, at any time, the period set
forth below then in effect:
Applicable Period Criteria
----------------- --------
Category A Period The Applicable Credit Rating is
A-/A3 or above.
Category B Period The Applicable Credit Rating is
BBB+/Baa1.
Category C Period The Applicable Credit Rating is
BBB/Baa2.
Category D Period The Applicable Credit Rating is
BBB-/Baa3.
Category E Period None of a Category A Period, a
Category B Period, a Category C
Period nor a Category D Period
is in effect at such time.
Notwithstanding anything to the contrary set forth above, if neither Rating
Agency rates the unsecured senior debt of the Borrower, then the Applicable
Period shall be a Category E Period.
"Approved Bank" shall have the meaning provided in the
definition of "Cash Equivalents."
"Approved Company" shall have the meaning provided in the
definition of "Cash Equivalents."
"Approved Credit Institution" shall mean a credit institution
within the meaning of the First Council Directive on the co-ordination of laws,
regulations and administrative provisions relating to the taking up and pursuit
of the business of credit institutions (No. 77/780/EEC) which has been approved
by the Council of Lloyd's for the purpose of providing guarantees and issuing or
confirming letters of credit comprising a Member's Funds at Lloyd's.
"Approved Currency" shall mean each of Dollars, each Primary
Alternate Currency and each Other Alternate Currency.
"Asset Sale" shall mean any sale, transfer or other
disposition effected on or after the Restatement Effective Date by Holdings or
any of its Subsidiaries of (i) any capital stock or equity securities of a
Subsidiary of Holdings or (ii) any other asset, in each case to any Person other
than Holdings or any of its Wholly-Owned Subsidiaries (other than (a) sales,
transfers or other dispositions in the ordinary course of business, (b) sales,
transfers or other dispositions of investments made or maintained pursuant to
Section 4.05(b), (g), (i) and (o) of the Holdings Guaranty, and (c) other sales,
transfers and dispositions the Net Available Proceeds from which do not exceed
$1,000,000).
"Assignment and Assumption Agreement" shall have the meaning
provided in Section 13.04(b) of the Credit Agreement.
"Associated Cost Rate" shall mean, with respect to each
Interest Period for Pounds Sterling-denominated Loans, the costs (expressed as a
percentage rounded up to the nearest four decimal places and as determined on
the first day of such Interest Period and any three month anniversary thereof by
the Administrative Agent) of compliance with then existing requirements of the
Bank of England in respect of Loans denominated in Pounds Sterling.
"Authorized Control Level" shall mean "Authorized Control
Level" as defined by the NAIC from time to time and as applied in the context of
the Risk Based Capital Guidelines promulgated by the NAIC (or any term
substituted therefor by the NAIC).
"Authorized Officer" shall mean, as to any Person, any senior
officer of such Person designated as such in writing by such Person to, and
found acceptable by, the Administrative Agent.
"Bank" shall have the meaning provided in the first paragraph
of the Credit Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or any
Letter of Credit drawing or (ii) a Bank having notified the Administrative
Agent, Holdings, the Borrower and/or the Account Party that it does not intend
to comply with its obligations under the Credit Agreement with respect to its
Revolving Loan Commitment or L/C Commitment, in the case of either clause (i) or
(ii) above, as a result of the appointment of a receiver or conservator with
respect to such Bank at the direction or request of any regulatory agency or
authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05 of the Credit Agreement.
"Base Rate" at any time shall mean the higher of (x) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate as in effect at
such time and (y) the Prime Lending Rate as in effect at such time.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a) of the Credit Agreement.
"Benchmark Statement" shall mean, as of any date, an annual
financial statement of the Regulated Insurance Companies which are Domestic
Subsidiaries as would be prepared as of such date utilizing the identical format
utilized by Trenwick America Reinsurance Corporation in preparing its December
31, 1999 Annual Statement filed with the Insurance Department of the State of
Connecticut, with each page, line item and column of a Benchmark Statement to
contain the same type of information, computed in the same manner, as contained
in the identically numbered page, line item and column of such Annual Statement.
"Borrower" shall have the meaning provided in the first
paragraph of the Credit Agreement.
"Borrowing" shall mean the incurrence by the Borrower of one
Type of Loan (A) denominated in Dollars that are Base Rate Loans on a pro rata
basis from all of the Banks and (B) of a single Approved Currency that are
Eurodollar Loans on a pro rata basis from all of the Banks on a given date (or
resulting from conversions on a given date), having in the case of Eurodollar
Loans the same Interest Period, provided that Base Rate Loans incurred pursuant
to Section 1.10(b) of the Credit Agreement shall be considered part of any
related Borrowing of Eurodollar Loans.
"Business Combination Agreement" shall have the meaning
provided in the recitals to the Credit Agreement.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day, excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close, and
(ii) with respect to all notices and determinations in connection with, and
payments of principal, interest on Unpaid Drawings and other amounts, Eurodollar
Loans and Alternate Currency Letters of Credit, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in the London interbank market and with respect to any notices or determinations
in respect of Euros, which is customarily a "Business Day" for such notices and
determinations.
"Capital Lease" as applied to any Person, shall mean any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is, or is required to be, accounted for as a
capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person shall mean all
obligations of such Person under Capital Leases in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) having maturities of
not more than one year from the date of acquisition, (ii) U.S. dollar
denominated time deposits, certificates of deposit and bankers acceptances of
(x) any FDIC insured bank, in amounts up to the FDIC insured limit, (y) any Bank
having capital and surplus in excess of $500,000,000 or the U.S. dollar
equivalent thereof or (z) any bank whose short-term commercial paper rating from
S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or
the equivalent thereof (any such bank, an "Approved Bank"), in each case with
maturities of not more than one year from the date of acquisition, (iii)
commercial paper issued by any Bank or Approved Bank or by the parent company of
any Bank or Approved Bank and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short-term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's (any such company, an "Approved Company"), or guaranteed by
any industrial company with a long term unsecured debt rating of at least A or
A2, or the equivalent of each thereof, from S&P or Moody's, as the case may be,
and in each case maturing within six months after the date of acquisition, (iv)
commercial paper of any United States municipal, state or local government rated
at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's and maturing within one year after the date of acquisition,
(v) any fund or funds investing solely in investments of the type described in
clauses (i) through (iv) above, and (vi) agreements to sell and repurchase
direct obligations of, or obligations that are fully guaranteed as to principal
and interest by, the U.S. Treasury, such agreements to be with primary treasury
dealers, to be evidenced by standard industry forms and to have maturities of
not more than six months from the date of commencement of the repurchase
transaction.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset Sale,
other than the portion of such deferred payment constituting interest, but only
as and when received) received by Holdings and/or any Subsidiary from such Asset
Sale, provided that any such proceeds received in currency other than Dollars
shall be converted into Dollars at the spot exchange rate for the currency in
question on the date of receipt by Holdings and/or its Subsidiaries of such
proceeds.
"Cat E Put Securities" shall mean the securities issued
pursuant to the Catastrophe Equity Securities Issuance Option Agreement, dated
July 1, 1997, among LaSalle Re Holdings, European Reinsurance Company of Zurich,
Allianz Aktiengesellschaft, Continental Casualty Company and CIC-Hilldale, Inc.,
as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.
"Change in Law" shall have the meaning provided in Section
9.06 of the Credit Agreement.
"Change of Control" shall mean (i) any Person or "group"
(within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as in
effect on the date hereof), shall (A) have acquired beneficial ownership of 30%
or more on a fully diluted basis of the economic and voting interest in
Holdings' capital stock or (B) have obtained the power (whether or not
exercised) to elect a majority of Holdings' directors; (ii) the Board of
Directors of Holdings shall not consist of a majority of Continuing Directors;
or (iii) Holdings shall (A) at any time cease to have beneficial ownership
(direct or indirect) of 100% on a fully diluted basis of the economic and voting
interest in both the Borrower's and the Account Party's capital stock or (B) at
any time cease to have the power (whether or not exercised) to elect a majority
of both the Borrower's and the Account Party's directors.
"Chase" shall mean The Chase Manhattan Bank, together with its
successors by merger.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect on the
Restatement Effective Date and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Combined" shall mean, when used with reference to any amount
or financial statement, such amount as determined, or financial statement as
prepared, on a combined basis for all of the specified Persons and their
respective Subsidiaries; provided that any such amount or financial statement
determined or prepared for any specified Person and its Subsidiaries separately
shall be determined or prepared on a consolidated basis in accordance with GAAP
or SAP, as the case may be.
"Commitment" shall mean, with respect to each Bank, such
Bank's Revolving Loan Commitment (if any) and such Bank's L/C Commitment (if
any).
"Confidential Bank Memorandum" shall mean the Confidential
Bank Memorandum, dated May 2000, distributed to Banks and prospective Banks in
connection with the Credit Agreement.
"Confidential Information" shall have the meaning provided in
Section 13.15 of the Credit Agreement (for purposes of such Section) or Section
5.11 of the Holdings Guaranty (for purposes of such Section), as the case may
be.
"Consolidated Indebtedness" shall mean, at any time, the
aggregate outstanding principal amount of all Indebtedness of Holdings and its
Subsidiaries at such time determined on a consolidated basis in accordance with
GAAP, but excluding therefrom (i) the Contingent Interest Notes, (ii) the Trust
Preferred Securities (but including therein the portion, if any, of the Trust
Preferred Securities which exceeds 15% of Consolidated Total Capital) and (iii)
the Letters of Credit and all letters of credit issued under Section 4.04(d) of
the Holdings Guaranty (so long as no drawing has occurred thereunder) .
"Consolidated Interest Expense" shall mean, for any period and
as to any Person, the sum, without duplication, of (i) total cash interest
expense (including interest paid in connection with the Trust Preferred
Securities and the interest component in respect of Capital Lease Obligations in
accordance with GAAP) of such Person and its Subsidiaries during such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Agreements, but excluding however, any amortization of
deferred financing costs plus (ii) all dividends on preferred stock paid by such
Person during such period.
"Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income (or loss) of Holdings and its Subsidiaries
determined in accordance with GAAP.
"Consolidated Net Worth" shall mean, with respect to any
Person, the Net Worth of such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP after appropriate deduction for any
minority interests in Subsidiaries (but, for purposes of determining compliance
with Section 4.12 of the Holdings Guaranty, without any deduction for the
minority interest in LaSalle Re Holdings represented by the LaSalle Preferred
Stock).
"Consolidated Tangible Net Worth" shall mean, as of the date
of any determination thereof, Consolidated Net Worth of Holdings at such time
less the amount of all intangible items, including, without limitation,
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks, brand names, write-ups of assets and any unallocated excess costs
of investments in Subsidiaries over equity in underlying net assets at dates of
acquisition.
"Consolidated Total Capital" shall mean, at any time, the sum
of (i) Consolidated Indebtedness (determined without giving effect to the
enumerated exclusions set forth in clauses (i) and (ii) therein) at such time
and (ii) Consolidated Net Worth of Holdings at such time.
"Contingent Interest Notes" shall mean the Contingent Interest
Notes Due June 30, 2006 originally issued by Piedmont Management Company Inc.
and in respect of which the Borrower is the obligor as of the Restatement
Effective Date.
"Contingent Obligations" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment 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 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
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include (x)
endorsements of instruments for deposit or collection in the ordinary course of
business or (y) any obligations of any Regulated Insurance Company under
Insurance Contracts, Reinsurance Agreements or Retrocession Agreements
(including any Liens with respect thereto). The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Bank" shall mean each Original Bank with either a
(i) Revolving Loan Commitment or (ii) L/C Commitment under the Credit Agreement.
"Continuing Directors" shall mean the directors of Holdings on
the Restatement Effective Date and each other director if such director's
nomination for the election to the Board of Directors of Holdings is recommended
by a majority of the then Continuing Directors.
"Conversion Date" shall mean the 364th day following the
Restatement Effective Date.
"Credit Agreement" shall mean the Credit Agreement dated as of
November 24, 1999 and amended and restated as of September 27, 2000, among the
Borrower, the Account Party, the Syndication Agent, the Documentation Agent and
the Administrative Agent, as the same may be amended, modified or supplemented
from time to time.
"Credit Documents" shall mean the Credit Agreement, the
Holdings Guaranty, the Notes and the Subsidiary Guaranty.
"Credit Event" shall mean the making of any Revolving Loan,
the issuance of any Letter of Credit or an increase in the Stated Amount of any
Letter of Credit.
"Credit Party" shall mean each of Holdings, the Borrower, the
Account Party and each Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividends" shall have the meaning provided in Section 4.06 of
the Holdings Guaranty.
"Documentation Agent" shall have the meaning provided in the
first paragraph of the Credit Agreement.
"Dollar Equivalent" shall mean, at any time for the
determination thereof, the amount of Dollars which could be purchased with the
amount of the relevant Alternate Currency involved in such computation at the
spot exchange rate therefor as quoted by the Administrative Agent as of 11:00
A.M. (London time) on the date three Business Days prior to the date of any
determination thereof for purchase on such date.
"Dollars" and the "$" shall mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings
which is not a Foreign Subsidiary.
"EBITDA" shall mean, for any Specified Foreign or
Non-Regulated Company for any period, the earnings before interest expense,
taxes, depreciation and amortization of such Specified Foreign or Non-Regulated
Company for such period determined in accordance with GAAP on a stand-alone
(i.e., non-consolidated) basis and without giving effect to any dividends
received by such Specified Foreign or Non-Regulated Company from its
Subsidiaries.
"EMU Legislation" shall mean the legislative measures of the
European Council for the introduction of, changeover to or operation of a single
or unified European currency.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect on the Restatement Effective Date and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or a Subsidiary of Holdings
would be deemed to be a "single employer" (i) within the meaning of Section
414(b) or (c) of the Code, and for the purpose of Section 302 of ERISA and/or
Section 412, 4971, 4977 and/or each "applicable section" under Section 414(t)(z)
of the code, within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Euro Equivalent" shall mean, at any time for the
determination thereof, the amount of Euros which could be purchased with the
amount of Dollars involved in such computation at the spot exchange rate
therefor as quoted by the Administrative Agent as of 11:00 A.M. (London time) on
the date three Business Days prior to the date of any determination thereof for
purchase on such date.
"Euro LIBOR" shall mean, for each Interest Period applicable
to any Loan denominated in Euros, the rate per annum that appears on page 3750
(or other appropriate page if such currency does not appear on such page) of the
Dow Xxxxx Telerate Screen (or any successor page) for Euro deposits with
maturities comparable to such Interest Period as of 11:00 A.M. (London time) on
the date which is three Business Days prior to the commencement of such Interest
Period or, if such a rate does not appear on the Dow Xxxxx Telerate Screen (or
any successor page), the offered quotations to first-class banks in the London
interbank market by Chase for Euro deposits of amounts in same day funds
comparable to the outstanding principal amount of such Loan with maturities
comparable to such Interest Period determined as of 11:00 A.M. (London time) on
the date which is three Business Days prior to the commencement of such Interest
Period.
"Eurodollar Loan" shall mean each Loan that at the election of
any Borrower is bearing interest at the rate provided in Section 1.08(b) of the
Credit Agreement.
"Euros" shall mean the single currency of participating member
states of the European Union.
"Event of Default" shall have the meaning provided in Section
9 of the Credit Agreement.
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating per annum interest rate 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 which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal Funds brokers of recognized standing selected by the
Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01 of the Credit Agreement.
"Financial Reinsurance Agreement" shall mean a reinsurance
agreement covering any transaction in which any Regulated Insurance Company
cedes business that does not meet the conditions for reinsurance accounting as
provided by the Financial Accounting Standards Board in Statement of Financial
Accounting Standards No. 113, as the same may be revised, replaced, or
supplemented from time to time.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program, other
than social security or social insurance, established or maintained outside the
United States of America by Holdings or any one or more of its Subsidiaries
primarily for the benefit of employees of Holdings or such Subsidiaries residing
outside the United States of America, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or severance or termination payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings
that is incorporated under the laws of any jurisdiction other than the United
States of America, any State thereof or any territory thereof.
"Funds at Lloyd's" shall have the meaning provided in
paragraph 4 of the Membership Byelaw (No. 17 of 1993).
"GAAP" shall mean generally accepted accounting principles in
the United States of America; it being understood and agreed that determinations
in accordance with GAAP for purposes of Section 4 of the Holdings Guaranty,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 5.06 of the Holdings Guaranty.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Creditors" shall mean and include the
Administrative Agent, the Issuing Agent, each Bank and each Person (other than
any Credit Party) party to an Interest Rate Agreement or Other Hedging
Agreements.
"Guaranties" shall mean the Holdings Guaranty, the Trenwick
America Guaranty and the Subsidiary Guaranty.
"Guarantor" shall mean each of Holdings, the Borrower and each
Subsidiary Guarantor.
"Holdings" shall mean Trenwick Group Ltd., a company organized
under the laws of Bermuda.
"Holdings Cash Flow" shall mean, for any period, the sum of
(i) for each Specified Regulated Insurance Company, the aggregate amount of
ordinary dividends which such Specified Regulated Insurance Company could pay to
its parent corporation under Legal Requirements as of the last day of such
period (determined as if (x) such Specified Regulated Insurance Company had not
paid any ordinary dividends during such period and (y) each Subsidiary of such
Specified Regulated Insurance Company which is a Regulated Insurance Company had
paid dividends to its parent corporation during such period in an amount equal
to the maximum amount of dividends payable by such Subsidiary during such period
under applicable Legal Requirements) plus the aggregate amount of any
extraordinary dividends actually paid by such Specified Regulated Insurance
Company to its parent corporation during such period, (ii) for each Specified
Foreign or Non-Regulated Company, the EBITDA of such Specified Foreign or
Non-Regulated Company for such period, (iii) tax sharing payments made by
Regulated Insurance Companies which are Domestic Subsidiaries directly to
Holdings or any Specified Non-Regulated Company during such period (less cash
taxes paid by Holdings during such period), and (iv) payments during such period
of principal and interest on surplus notes issued by Regulated Insurance
Companies which are Domestic Subsidiaries to Holdings or any Specified
Non-Regulated Company.
"Holdings Guaranty" shall have the meaning provided in Section
5.20 of the Credit Agreement.
"Indebtedness" of any Person shall mean (without duplication)
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, (v) the principal portion of
all Capitalized Lease Obligations of such Person, (vi) all obligations of such
Person to pay a specified purchase price for goods or services whether or not
delivered or accepted, i.e., take-or-pay and similar obligations, (vii) the net
termination obligations of such Person under Interest Rate Agreements and Other
Hedging Agreements, calculated as of any date as if such agreement were
terminated as of such date, (viii) all obligations of such Person under
Financial Reinsurance Agreements and (ix) all Contingent Obligations of such
Person; provided that Indebtedness shall not include trade payables (including
obligations under insurance contracts and reinsurance payables) and accrued
expenses, in each case arising in the ordinary course of business.
"Insurance Business" shall mean one or more aspects of the
business of selling, issuing or underwriting insurance or reinsurance.
"Insurance Contract" shall mean any insurance contract or
policy issued by a Regulated Insurance Company but shall not include any
Reinsurance Agreement or Retrocession Agreement.
"Interest Coverage Ratio" shall mean, for any Test Period, the
ratio of (a) Holdings Cash Flow for such Test Period to (b) Consolidated
Interest Expense of Holdings for such Test Period; provided that (i) for the
Test Period ending on or about December 31, 2000, Consolidated Interest Expense
and the portion of Holdings Cash Flow determined by reference to EBITDA shall be
the actual such amounts calculated for such Test Period multiplied by 4.00
(other than the portion of Consolidated Interest Expense for such Test Period
incurred in connection with the Trust Preferred Securities which shall be
multiplied by 2.00), (ii) for the Test Period ending on or about March 31, 2001,
Consolidated Interest Expense and the portion of Holdings Cash Flow determined
by reference to EBITDA shall be the actual such amounts calculated for such Test
Period multiplied by 2.00 and (iii) for the Test Period ending on or about June
30, 2001, Consolidated Interest Expense and the portion of Holdings Cash Flow
determined by reference to EBITDA shall be the actual such amounts calculated
for such Test Period multiplied by 1.33 (other than the portion of Consolidated
Interest Expense for such Test Period incurred in connection with the Trust
Preferred Securities which shall be the actual such amounts for such Test
Period).
"Interest Period" shall mean, with respect to any Eurodollar
Loan, the interest period applicable thereto, as determined pursuant to Section
1.09 of the Credit Agreement.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Issuing Agent" shall mean Chase Manhattan International
Limited.
"Issuing Country" shall have the meaning provided in Section
13.18 of the Credit Agreement.
"Judgment Currency" shall have the meaning provided in Section
13.17(a) of the Credit Agreement.
"Judgment Currency Conversion Date" shall have the meaning
provided in Section 13.17(a) of the Credit Agreement.
"LaSalle Business Combination" shall have the meaning provided
in the recitals to the Credit Agreement.
"LaSalle Business Combination Agreement" shall have the
meaning provided in the recitals to the Credit Agreement.
"LaSalle Business Combination Agreement" shall have the
meaning provided in the recitals to the Credit Agreement.
"LaSalle Business Combination Documents" shall mean the
LaSalle Business Combination Agreement and each of the other agreements,
documents and instruments entered into in connection with the LaSalle Business
Combination.
"LaSalle Credit Agreement" shall mean the Credit Agreement,
dated December 1, 1995, among LaSalle Re Holdings, the financial institutions
party thereto from time to time, and Chase, as administrative agent, as the same
has been amended, supplemented or modified from time to time.
"LaSalle Preferred Stock" shall mean the Series A Preferred
Stock of LaSalle Re Holdings.
"LaSalle Re" shall have the meaning provided in the recitals
to the Credit Agreement.
"LaSalle Re Holdings" shall have the meaning provided in the
recitals to the Credit Agreement.
"L/C Bank" shall mean each Bank with an L/C Commitment.
"L/C Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name on Annex I of the Credit Agreement
directly below the column entitled "L/C Commitment," as the same may be reduced
from time to time or terminated pursuant to Sections 3.02, 3.03 and/or 9 of the
Credit Agreement.
"L/C Commitment Fee" shall have the meaning provided in
Section 3.01(b) of the Credit Agreement.
"L/C Exposure" of any L/C Bank at any time shall mean such L/C
Bank's L/C Percentage of the aggregate Stated Amount of all outstanding Letters
of Credit at such time.
"L/C Issuance Expiration Date" shall mean the earlier of (i)
the Applicable Lloyd's Coming in Line Date and (ii) the first date on which a
Notice of Non-Extension is delivered to Lloyd's in accordance with Section
2.05(a) of the Credit Agreement.
"L/C Maturity Date" shall mean, at any time, the later of (i)
December 31, 2004 and (ii) the latest expiration date of any Letter of Credit
issued in accordance with the terms of the Credit Agreement.
"L/C Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the L/C Commitment of such
Bank at such time and the denominator of which is the Total L/C Commitment at
such time, provided that if the L/C Percentage of any Bank is to be determined
after the Total L/C Commitment has been terminated, then the L/C Percentages of
the Banks shall be determined immediately prior (and without giving effect) to
such termination.
"L/C Supportable Obligations" shall mean the obligations of
Holdings or its Subsidiaries to Lloyd's.
"Legal Requirements" shall mean all applicable laws, rules and
regulations made by any governmental body or regulatory authority (including,
without limitation, any Applicable Insurance Regulatory Authority) having
jurisdiction over Holdings or a Subsidiary of Holdings.
"Lending Affiliate" shall mean, with respect to any Person,
any other Person (i) directly or indirectly controlling (including, but not
limited to, all directors, officers and partners of such Person), controlled by,
or under direct or indirect common control with, such Person or (ii) that
directly or indirectly owns more than 50% of any class of the voting securities
or capital stock of or equity interests in such Person. A Person shall be deemed
to control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.
"Letter of Credit" shall have the meaning provided in Section
2.01(a) of the Credit Agreement.
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(c) of the Credit Agreement.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided
in Section 2.02(a) of the Credit Agreement.
"LIBOR" shall mean (i) with respect to any Borrowing of Loans
denominated in Dollars or a Primary Alternate Currency, the relevant interest
rate, i.e., U.S. LIBOR, Pounds Sterling LIBOR or Euro LIBOR and (ii) with
respect to any Borrowing of Loans denominated in an Other Alternate Currency,
such rate per annum as shall be agreed upon at the time such Other Alternate
Currency is approved.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Lloyd's" shall mean the Society incorporated by Lloyd's Xxx
0000 by the name of Lloyd's.
"Lloyd's Coming in Line Date" shall mean, for any year, the
Lloyd's coming in line date for such year (which date shall occur between
November 20 and November 30 of each year, and for purposes of the Credit
Agreement shall be deemed to occur on November 30 of any year if it has not
otherwise occurred by such date).
"Loan" shall mean (i) prior to the Conversion Date, Revolving
Loans, and (ii) on or after the Conversion Date, Term Loans.
"Managed Syndicate" shall mean each underwriting syndicate at
Lloyd's in which either (i) any Subsidiary of Holdings is acting as the managing
agent for such syndicate or (ii) Holdings and its Subsidiaries collectively
provide 50% or more of the underwriting capital for such syndicate.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, operations, property or condition (financial or otherwise) of
Holdings and its Subsidiaries taken as a whole after giving effect to the
Transaction.
"Material Indebtedness" shall have the meaning provided in
Section 9.04 of the Credit Agreement.
"Material Subsidiary" shall mean any Subsidiary of Holdings
whose total assets or total revenues exceed 4% of the total assets or gross
revenues, respectively, of Holdings 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 GAAP.
"Member" shall mean an underwriting member of Lloyd's.
"Minimum Borrowing Amount" shall mean (i) for any Loans that
are Dollar denominated, $5,000,000, and if in excess thereof, shall be in an
integral Dollar denominated multiple of $1,000,000, and (ii) for any Revolving
Loans that are Alternate Currency Loans, an amount in the respective Approved
Currency having a Dollar Equivalent (determined at the time a Notice of
Borrowing is received or a prepayment made) of $5,000,000, and if in excess
thereof, shall be in a Dollar Equivalent multiple of $1,000,000 in the
respective Approved Currency.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Moody's Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers) assigned by Moody's to the senior unsecured long-term debt of the
Borrower. If the foregoing rating shall be changed by Moody's, such change shall
be effective for purposes of this definition on the Business Day following the
day on which Moody's announces such change.
"Multiemployer Plan" shall mean any multiemployer plan as
defined in Section 4001(a)(3) of ERISA, which is a pension plan as defined in
Section 3(2) of ERISA and which Holdings, a Subsidiary of Holdings or an ERISA
Affiliate maintains, contributes to or has an obligation to contribute (or
maintained, contributed to or had an obligation to contribute to in the last
five years).
"NAIC" shall mean the National Association of Insurance
Commissioners or any successor organization thereto.
"NAIC Tests" shall mean the ratios and other financial
measurements developed by the NAIC under its Insurance Regulatory Information
System, as in effect from time to time.
"Net Available Proceeds" shall mean (i) with respect to any
Asset Sale consummated by a Regulated Insurance Company, the Surplus Increase
with respect to such Regulated Insurance Company as a result of such Asset Sale,
(ii) with respect to any Asset Sale consummated by Holdings or any Non-Regulated
Company which is not a Subsidiary of a Regulated Insurance Company, the Net Cash
Proceeds resulting therefrom and (iii) with respect to any Asset Sale
consummated by a Non-Regulated Company which is a Subsidiary of a Regulated
Insurance Company, an amount equal to the dividend that such Regulated Insurance
Company would be permitted to pay in accordance with the Legal Requirements
applicable to it as a result of the receipt by such Regulated Insurance Company
of a dividend from such Non-Regulated Insurance Company in an amount equal to
the Net Cash Proceeds resulting from such Asset Sale; in each case as determined
in good faith by Holdings and certified in writing by Holdings to the
Administrative Agent (showing the calculation thereof and supporting
assumptions) on or prior to the date on which Holdings or any Subsidiary is to
receive the initial proceeds from such Asset Sale.
"Net Cash Proceeds" shall mean, with respect to any Asset
Sale, the Cash Proceeds resulting therefrom net of (a) cash expenses of sale
(including payment of principal, premium and interest on Indebtedness other than
the Loans required to be repaid as a result of such Asset Sale), (b) incremental
taxes paid or payable as a result thereof and (c) amounts provided as a reserve,
in accordance with GAAP, against any liabilities under any indemnification
obligations, purchase price adjustments or similar items associated with such
Asset Sale, in each case as determined in good faith by Holdings and certified
in writing by Holdings to the Administrative Agent (showing the calculation
thereof and supporting assumptions) on or prior to the date on which Holdings or
any Subsidiary is to receive the initial proceeds from such Asset Sale.
"Net Worth" shall mean, as to any Person, the sum of its
capital stock (including, without limitation, its preferred stock), capital in
excess of par or stated value of shares of its capital stock (including, without
limitation, its preferred stock), retained earnings and any other account which,
in accordance with GAAP, constitutes stockholders equity, but excluding (i) any
treasury stock and (ii) the effects of Financial Accounting Statement No. 115.
"New Bank" shall mean each of the Persons listed on Annex I to
the Credit Agreement which is not a Continuing Bank.
"Non-Defaulting Bank" shall mean any Bank other than a
Defaulting Bank.
"Non-Regulated Company" shall mean each Subsidiary of Holdings
which is not a Regulated Insurance Company.
"Note" shall mean and include each promissory note, in the
form agreed by the Borrower and the Administrative Agent prior to the
Restatement Effective Date, to the extent issued pursuant to Section 1.05(b) of
the Credit Agreement.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03 of the Credit Agreement.
"Notice of Conversion" shall have the meaning provided in
Section 1.06 of the Credit Agreement.
"Notice of Non-Extension" shall have the meaning provided in
Section 2.05 of the Credit Agreement.
"Notice Office" shall mean the office of the Administrative
Agent at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxx, Telephone (000) 000-0000, Facsimile: (000) 000-0000, or such other office
as the Administrative Agent may designate to Holdings, the Borrower and the
Account Party and the Banks from time to time.
"Obligation Currency" shall have the meaning provided in
Section 13.17(a) of the Credit Agreement.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Administrative Agent or any Bank pursuant to the terms of the
Credit Agreement or any other Credit Document.
"Original Bank" shall mean each Person which was a Bank under,
and as defined in, the Original Credit Agreement.
"Original Credit Agreement" shall have the meaning provided in
the recitals to the Credit Agreement.
"Original Letter of Credit" shall mean all letters of credit
issued pursuant to the Original Credit Agreement which are outstanding on the
Restatement Effective Date.
"Original Loans" shall mean the Loans under, and as defined
in, the Original Credit Agreement.
"Other Alternate Currency" shall mean any freely transferable
currency other than any Primary Alternate Currency, to the extent such currency
is approved by the Administrative Agent and each Bank.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Payment Office" shall mean the office of the Administrative
Agent c/o The Loan and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxx, Telephone No.: (212)
000-0000, Facsimile No.: (000) 000-0000 or such other office as the
Administrative Agent may designate to the Borrower and the Banks from time to
time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall have the meaning provided in
Section 4.02(c) of the Holdings Guaranty.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA other than a Foreign Pension Plan or a Multiemployer Plan, which is
maintained or contributed to by (or to which there is an obligation to
contribute of) Holdings or a Subsidiary of Holdings or an ERISA Affiliate, and
each such plan for the five year period immediately following the latest date on
which Holdings, or a Subsidiary of Holdings or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
"Pounds Sterling" shall mean freely transferable lawful money
of the United Kingdom.
"Pounds Sterling Equivalent" shall mean, at any time for the
determination thereof, the amount of Pounds Sterling which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefor as quoted by Chase as of 11:00 A.M. (London time) on the date
three Business Days prior to the date of any determination thereof for purchase
on such date.
"Pounds Sterling LIBOR" shall mean, with respect to each
Interest Period for any Loan denominated in Pounds Sterling, (I) the rate per
annum that appears on page 3750 (or other appropriate page if such currency does
not appear on such page) of the Dow Xxxxx Telerate Screen (or any successive
page) with maturities comparable to such Interest Period as of 11:00 A.M.
(London time) on the date which is the commencement date of such Interest Period
or, if such a rate does not appear on page 3750 (or such other appropriate page)
of the Dow Xxxxx Telerate Screen (or any successor page) the offered quotations
to first-class banks in the London interbank EuroDollar market by Chase for
Pounds Sterling deposits of amounts in same day funds comparable to the
outstanding principal amount of such Loans with maturities comparable to such
Interest Period determined as of 11:00 A.M. (London time) on the date which is
the commencement of such Interest Period plus (II) the Associated Cost Rate for
such Loans for such Interest Period.
"Primary Alternate Currency" shall mean each of Pounds
Sterling and Euros.
"Prime Lending Rate" shall mean the rate of interest per annum
which Chase announces from time to time as its prime commercial lending rate in
effect at its principal office in New York City, the Prime Lending Rate to
change when and as such prime commercial lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Chase may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate.
"Principal Amount" shall mean (i) the stated principal amount
of each Loan denominated in Dollars and/or (ii) the Dollar Equivalent of the
stated principal amount of each Alternate Currency Loan, as the context may
require.
"Projections" shall mean the financial projections, dated May
2000 and delivered by Trenwick to the Banks in May 2000.
"Quarterly Statement" shall mean the quarterly financial
statement required to be filed by any Regulated Insurance Company with the
Applicable Regulatory Insurance Authority.
"Rated Ongoing Regulated Subsidiary" shall mean each Regulated
Insurance Company which has an A.M. Best claims paying rating (including,
without limitation, Trenwick America Reinsurance Corporation, Trenwick
International Limited, The Insurance Corporation of New York, Dakota Specialty
Insurance Company and Chartwell Insurance Company, but excluding any Regulated
Insurance Company (including any of the aforementioned companies) if such
Company is not being employed in the writing of new insurance or reinsurance
business following the consummation of the LaSalle Business Combination).
"Rating Agency" shall mean S&P or Moody's as the case may be.
"Realistic Disaster Scenario" shall mean any realistic
disaster scenario presented in a business plan prepared in relation to the
Managed Syndicate under paragraph 57A(a) of the Underwriting Agents Bylaw (No. 4
of 1984) which shows the potential impact upon the Managed Syndicate of a
catastrophic event.
"Refinancing" shall mean the payment of all loans, accrued but
unpaid interest, premiums, fees, commissions, expenses and other amounts owing
under the Original Credit Agreement, in each case on the Restatement Effective
Date.
"Register" shall have the meaning provided in Section 1.05 of
the Credit Agreement.
"Regulated Insurance Company" shall mean any Subsidiary of
Holdings (including, without limitation, Subsidiaries acquired or created in
connection with the LaSalle Business Combination), whether now owned or
hereafter acquired, that is authorized or admitted to carry on or transact
Insurance Business in any jurisdiction (domestic or foreign) and is regulated by
any Applicable Insurance Regulatory Authority.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Reinsurance Agreement" shall mean any agreement, contract,
treaty or other arrangement whereby one or more insurers, as reinsurers, assume
liabilities under insurance policies or agreements issued by another insurance
or reinsurance company or companies.
"Relevant Currency Equivalent" shall mean the Dollar
Equivalent, the Euro Equivalent or the Pounds Sterling Equivalent.
"Replaced Bank" shall have the meaning provided in Section
1.13 of the Credit Agreement.
"Replacement Bank" shall have the meaning provided in Section
1.13 of the Credit Agreement.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose Revolving Loan Commitment (or, after the Total Revolving Loan Commitment
has been terminated, outstanding Revolving Loans or Term Loans) and L/C
Commitment (or, after the Total L/C Commitment has been terminated, the amount
of any Unpaid Drawings owing to such Non-Defaulting Banks) constitute a majority
of the sum of (i) the Total Revolving Loan Commitment less the aggregate
Revolving Loan Commitments of Defaulting Banks, if any, or, after the Total
Revolving Loan Commitment has been terminated, the total outstanding Revolving
Loans or Term Loans of Non-Defaulting Banks) and (ii) the Total L/C Commitment
or, after the Total L/C Commitment has been terminated, the aggregate Unpaid
Drawings.
"Restatement Effective Date" shall have the meaning provided
in Section 13.10 of the Credit Agreement.
"Retrocession Agreement" shall mean any agreement, contract,
treaty or other arrangement whereby one or more insurers or reinsurers, as
retrocessionaires, assume liabilities of reinsurers under a Reinsurance
Agreement or other retrocessionaires under another Retrocession Agreement.
"Revolving Loan" shall have the meaning provided in Section
1.01(a) of the Credit Agreement.
"Revolving Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I of the Credit
Agreement directly below the column entitled "Revolving Loan Commitment," as the
same may be reduced from time to time or terminated pursuant to Sections 3.02,
3.03 and/or 9 of the Credit Agreement.
"Risk Based Capital Ratio" shall mean, for any Regulated
Insurance Company, the ratio (expressed as a percentage), at any time, of the
Total Adjusted Capital of such Regulated Insurance Company to the Authorized
Control Level of such Regulated Insurance Company.
"RL Commitment Fee" shall have the meaning provided in Section
3.01(a) of the Credit Agreement.
"S&P" shall mean Standard & Poor's Ratings Group and its
successors.
"S&P Credit Rating" shall mean the rating level (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers) assigned by S&P to the senior unsecured long-term debt of the
Borrower. If the foregoing rating shall be changed by S&P, such change shall be
effective for purposes of this definition on the Business Day following the day
on which S&P announces such change.
"SAP" shall mean, with respect to any Regulated Insurance
Company, the accounting procedures and practices prescribed or permitted by the
Applicable Insurance Regulatory Authority of the state or other jurisdiction
(domestic or foreign) in which such Regulated Insurance Company is domiciled; it
being understood and agreed that determinations in accordance with SAP for
purposes of Section 4 of the Holdings Guaranty, including defined terms as used
therein, are subject (to the extent provided therein) to Section 5.06 of the
Holdings Guaranty.
"Scheduled Repayments" shall have the meaning provided in
Section 4.02(i)(a) of the Credit Agreement.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be in effect from
time to time.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii) of the Credit Agreement.
"Specified Foreign or Non-Regulated Company" shall mean each
Regulated Insurance Company which is a Foreign Subsidiary (other than LaSalle Re
Holdings) and each Non-Regulated Company, in each case which is not a Subsidiary
of any Regulated Insurance Company which is a Domestic Subsidiary.
"Specified Non-Regulated Company" shall mean each
Non-Regulated Company which is not a Subsidiary of any Regulated Insurance
Company.
"Specified Regulated Insurance Company" shall mean each
Regulated Insurance Company which (i) is a Domestic Subsidiary and (ii) is not a
Subsidiary of any other Regulated Insurance Company; provided that
notwithstanding the foregoing, LaSalle Re shall be deemed to be a Specified
Regulated Insurance Company.
"Stated Amount" shall mean, at any time, (i) if the Letter of
Credit is denominated in Dollars, the maximum amount available to be drawn under
the Letter of Credit (regardless of whether any conditions for drawing could
then be met) and (ii) if the Letter of Credit is an Alternative Currency Letter
of Credit, the Dollar Equivalent of the maximum amount available to be drawn
under the Letter of Credit (regardless of whether any conditions for drawing
could then be met).
"Statutory Surplus" shall mean, at any date for any Regulated
Insurance Company, (a) the total amount as would be shown on line 27, page 3,
column 1 of a Benchmark Statement for such Regulated Insurance Company prepared
as of such date, in the case of a Domestic Subsidiary, and (b) the total amount
of statutory surplus of such Regulated Insurance Company as of such date
determined in accordance with SAP, in the case of a Foreign Subsidiary.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association,
limited liability company, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50% equity or voting
interest at the time. Unless otherwise expressly provided, all references herein
to "Subsidiary" shall mean a Subsidiary of Holdings.
"Subsidiary Guarantor" shall mean (a) LaSalle Re Holdings and
(b) each Domestic Subsidiary of the Borrower which is a Non-Regulated Company
and a Material Subsidiary.
"Subsidiary Guaranty" shall have the meaning provided in
Section 5.08 of the Credit Agreement.
"Surplus Increase" shall mean, with respect to each Asset Sale
effected by a Regulated Insurance Company, the increase in Statutory Surplus of
such Regulated Insurance Company as a result of such Asset Sale.
"Syndication Agent" shall have the meaning provided in the
first paragraph of the Credit Agreement.
"Taxes" shall have the meaning provided in Section 4.04(a) of
the Credit Agreement.
"Term Loan" shall mean each Revolving Loan that is converted
into a term loan on the Conversion Date pursuant to 1.01(b) of the Credit
Agreement.
"Term Loan Maturity Date" shall mean the fifth anniversary of
the Restatement Effective Date.
"Test Period" shall mean (i) for any determination made on and
prior to June 30, 2001, the period from October 1, 2000 to the last day of the
fiscal quarter of Holdings then last ended, provided that the first Test Period
shall end on December 31, 2000, and (ii) for any determination made thereafter,
the four consecutive fiscal quarters of Holdings ended on the last day of the
most recently ended fiscal quarter of Holdings (taken as one accounting period).
"Total Adjusted Capital" shall mean "Total Adjusted Capital"
as defined by the NAIC as of December 31, 1997 and as applied in the context of
the Risk Based Capital Guidelines promulgated by the NAIC.
"Total Commitment" shall mean the sum of the Total Revolving
Loan Commitment and Total L/C Commitment.
"Total L/C Commitment" shall mean the sum of the L/C
Commitments of each of the L/C Banks.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Unutilized L/C Commitment" shall mean, at any time, the
sum of the Unutilized L/C Commitments of the L/C Banks at such time.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum
of the aggregate Principal Amount of all Revolving Loans outstanding at such
time.
"Transaction" shall mean, collectively, (i) the LaSalle
Business Combination, (ii) the Refinancing, (iii) the incurrence by the Borrower
of the Revolving Loans hereunder, (iv) the issuance of Letter of Credits for the
account of the Account Party hereunder on the Restatement Effective Date and (v)
the payment of fees and expenses in connection with the foregoing.
"Transaction Documents" shall mean, collectively, (i) the
LaSalle Business Combination Documents and (ii) the Credit Documents.
"Trenwick" shall have the meaning provided in the recitals to
the Credit Agreement.
"Trenwick America Guaranty" shall mean the guaranty of the
Borrower pursuant to Section 12 of the Credit Agreement.
"Trenwick Senior Notes" shall mean the 6.70% Senior Notes due
April 1, 2003 issued by the Trenwick and subsequently assumed by the Borrower
pursuant to the documentation governing the Trenwick Senior Notes at the time of
the consummation of the LaSalle Business Combination.
"Trust Preferred Securities" shall mean the 8.82% Junior
Subordinated Deferrable Interest Debentures issued by Trenwick pursuant to the
Indenture, dated as of January 31, 1997, between Trenwick and The Chase
Manhattan Bank, as Trustee which Debentures have been assumed by the Borrower
pursuant to the terms of such Indenture at the time of the consummation of the
LaSalle Business Combination, and all securities issued by Trenwick Capital
Trust I pursuant to the Amended and Restated Declaration of Trust, dated as of
January 31, 1997.
"Type" shall mean any type of Loan determined with respect to
currency and the interest option applicable thereto.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the value of the accumulated plan benefits under the
Plan determined on a plan termination basis in accordance with actuarial
assumptions at such time consistent with those prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds the fair market value of all plan
assets allocable to such liabilities under Title IV of ERISA (excluding any
accrued but unpaid contributions).
"Unpaid Drawing" shall have the meaning provided in Section
2.03(a) of the Credit Agreement.
"Unutilized L/C Commitment" with respect to any Bank at any
time shall mean such Bank's L/C Commitment at such time less such Bank's L/C
Exposure at such time.
"Unutilized Revolving Loan Commitment" with respect to any
Bank at any time shall mean such Bank's Revolving Loan Commitment at such time
less the aggregate outstanding Principal Amount of all Revolving Loans made by
such Bank at such time.
"U.S. LIBOR" shall mean for each Interest Period applicable to
a Loan denominated in Dollars (other than a Base Rate Loan), the rate per annum
that appears on page 3750 of the Dow Xxxxx Telerate Screen (or any successor
page) for Dollar deposits with maturities comparable to such Interest Period as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period or, if such a rate does not appear on page
3750 of the Dow Xxxxx Telerate Screen (or any successor page), the offered
quotations to first-class banks in the London interbank market by Chase for
Dollar deposits of amounts in same day funds comparable to the outstanding
principal amount of such Dollar denominated Loan with maturities comparable to
such Interest Period determined as of 11:00 A.M. (London time) on the date which
is two Business Days prior to the commencement of such Interest Period.
"Wholly-Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person to the extent all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
