Exhibit 10.8
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CREDIT AGREEMENT
dated as of December 12, 2001
among
MONTPELIER RE HOLDINGS LTD.
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
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BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
Table of Contents
Page
ARTICLE I DEFINITIONS................................................................................... 1
SECTION 1.1 Definitions........................................................ 1
SECTION 1.2 Other Interpretive Provisions...................................... 17
SECTION 1.3 Accounting Principles.............................................. 18
ARTICLE II AMOUNT AND TERMS OF COMMITMENT............................................................... 18
SECTION 2.1 Commitments....................................................... 18
SECTION 2.2 Termination or Reduction of Commitments........................... 19
SECTION 2.3 Loan Accounts..................................................... 19
SECTION 2.4 Procedure for Borrowing........................................... 19
SECTION 2.5 Conversion and Continuation Elections............................. 20
SECTION 2.6 Repayments........................................................ 21
SECTION 2.7 Interest.......................................................... 22
SECTION 2.8 Fees.............................................................. 23
SECTION 2.9 Computation of Fees and Interest.................................. 23
SECTION 2.10 Payments by the Borrower.......................................... 23
SECTION 2.11 Payments by the Lenders to the Administrative Agent............... 24
SECTION 2.12 Sharing of Payments, Etc.......................................... 25
SECTION 2.13 Revolving Commitment Termination Date Extension................... 25
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY....................................................... 26
SECTION 3.1 Taxes............................................................. 26
SECTION 3.2 Illegality........................................................ 28
SECTION 3.3 Increased Costs and Reduction of Return........................... 29
SECTION 3.4 Funding Losses.................................................... 29
SECTION 3.5 Inability to Determine Rates...................................... 30
SECTION 3.6 Certificates of Lenders........................................... 30
SECTION 3.7 Substitution of Lenders........................................... 31
SECTION 3.8 Survival.......................................................... 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................................... 31
SECTION 4.1 Due Organization, Authorization, etc.............................. 31
SECTION 4.2 GAAP Financial Statements......................................... 32
SECTION 4.3 Litigation and Contingent Liabilities............................. 32
SECTION 4.4 ERISA Compliance.................................................. 32
SECTION 4.5 Investment Company Act............................................ 33
SECTION 4.6 Regulations U and X............................................... 33
SECTION 4.7 Proceeds.......................................................... 33
SECTION 4.8 Accuracy of Information........................................... 33
SECTION 4.9 Subsidiaries...................................................... 33
Table of Contents
(cont'd)
SECTION 4.10 Insurance Licenses................................................ 34
SECTION 4.11 Taxes............................................................. 34
SECTION 4.12 Compliance with Laws.............................................. 34
SECTION 4.13 Financial Condition............................................... 34
ARTICLE V AFFIRMATIVE COVENANTS......................................................................... 34
SECTION 5.1 Reports, Certificates and Other Information....................... 34
SECTION 5.2 Corporate Existence; Foreign Qualification........................ 37
SECTION 5.3 Books, Records and Inspections.................................... 37
SECTION 5.4 Insurance......................................................... 38
SECTION 5.5 Taxes and Liabilities............................................. 38
SECTION 5.6 Compliance with Laws.............................................. 38
SECTION 5.7 Maintenance of Permits............................................ 38
SECTION 5.8 Conduct of Business............................................... 38
SECTION 5.9 Investments....................................................... 38
SECTION 5.10 Compliance with ERISA............................................. 38
ARTICLE VI NEGATIVE COVENANTS........................................................................... 39
SECTION 6.1 Leverage Ratio.................................................... 39
SECTION 6.2 Tangible Net Worth................................................ 39
SECTION 6.3 Statutory Net Written Premiums to Consolidated Insurance
Subsidiary Net Worth.............................................. 39
SECTION 6.4 Debt.............................................................. 39
SECTION 6.5 Mergers, Consolidations and Sales................................. 39
SECTION 6.6 Other Agreements.................................................. 40
SECTION 6.7 Transactions with Affiliates...................................... 40
SECTION 6.8 Liens............................................................. 40
SECTION 6.9 Restrictions On Negative Pledge Agreements........................ 41
SECTION 6.10 Equity Distributions, Etc......................................... 41
SECTION 6.11 Capital Expenditures.............................................. 41
SECTION 6.12 Regulations U and X............................................... 42
ARTICLE VII EVENTS OF DEFAULT AND THEIR EFFECT.......................................................... 42
SECTION 7.1 Events of Default................................................. 42
SECTION 7.2 Effect of Event of Default........................................ 44
ARTICLE VIII CONDITIONS................................................................................. 44
SECTION 8.1 Conditions to Occurrence of the Effective Date.................... 44
SECTION 8.2 Conditions to Initial Borrowing................................... 45
SECTION 8.3 Conditions to All Borrowings...................................... 46
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Table of Contents
(cont'd)
ARTICLE IX THE ADMINISTRATIVE AGENT..................................................................... 46
SECTION 9.1 Appointment and Authorization..................................... 46
SECTION 9.2 Delegation of Duties.............................................. 46
SECTION 9.3 Liability of Administrative Agent................................. 46
SECTION 9.4 Reliance by Administrative Agent.................................. 47
SECTION 9.5 Notice of Default................................................. 47
SECTION 9.6 Credit Decision................................................... 47
SECTION 9.7 Indemnification................................................... 48
SECTION 9.8 Administrative Agent in Individual Capacity....................... 48
SECTION 9.9 Successor Administrative Agent.................................... 49
ARTICLE X MISCELLANEOUS................................................................................. 49
SECTION 10.1 Amendments and Waivers............................................ 49
SECTION 10.2 Notices........................................................... 50
SECTION 10.3 No Waiver; Cumulative Remedies.................................... 50
SECTION 10.4 Costs and Expenses................................................ 51
SECTION 10.5 Indemnity......................................................... 51
SECTION 10.6 Payments Set Aside................................................ 52
SECTION 10.7 Successors and Assigns............................................ 53
SECTION 10.8 Assignments, Participations, etc.................................. 53
SECTION 10.9 Confidentiality................................................... 54
SECTION 10.10 Set-off........................................................... 55
SECTION 10.11 Notification of Addresses, Lending Offices, Etc................... 55
SECTION 10.12 Counterparts...................................................... 55
SECTION 10.13 Severability...................................................... 55
SECTION 10.14 No Third Parties Benefitted....................................... 55
SECTION 10.15 Governing Law and Jurisdiction.................................... 56
SECTION 10.16 Waiver of Jury Trial.............................................. 56
SECTION 10.17 Successors and Assigns............................................ 56
SECTION 10.18 Service of Process................................................ 57
SECTION 10.19 Currency Indemnity................................................ 57
SECTION 10.20 Entire Agreement.................................................. 57
SCHEDULES AND EXHIBITS
SCHEDULE 1.2............... Pricing Grid
SCHEDULE 2.1............... Commitments
SCHEDULE 4.1............... Jurisdictions
SCHEDULE 4.9............... Subsidiaries
SCHEDULE 10.2.............. Addresses
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Table of Contents
(cont'd)
EXHIBIT A......................... Form of Notice of Borrowing
EXHIBIT B......................... Form of Notice of Conversion/Continuation
EXHIBIT C......................... Form of Compliance Certificate
EXHIBIT D......................... Form of Promissory Note
EXHIBIT E......................... Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 12, 2001, is entered
into by and among MONTPELIER RE HOLDINGS LTD., a Bermuda company (the
"Borrower"), various financial institutions which are parties hereto (the
"Lenders") and Bank of America, N.A., as Administrative Agent for the Lenders
(in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Lenders have agreed to make available to the
Borrower a $50,000,000 revolving loan facility and a $150,000,000 term loan
facility upon the terms and conditions set forth in this agreement.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. When used herein the following terms
shall have the following meanings:
Additional Restricted Payment - is defined in Section 6.10(b).
Administrative Agent means (a) Bank of America, N.A., in its
capacity as administrative agent for the Lenders, and (b) each other Person as
shall have subsequently been appointed as the successor Administrative Agent
pursuant to Section 9.9.
Affiliate of any Person means any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be:
(a) "controlled by" any other Person if such other Person
possesses, directly or indirectly, power:
(i) to vote 20% or more of the securities having at the time of
any determination hereunder voting power for the election of directors
of such Person; or
(ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise; or
(b) "controlled by" or "under common control with" such other
Person if such other Person is the executor, administrator, or other
personal representative of such Person.
Agent-Related Persons means the Administrative Agent, any
successor administrative agent arising under Section 9.9 and the Arranger,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
Agent's Payment Office means the address for payments set forth
on Schedule 10.2 in relation to the Administrative Agent, or such other address
as the Administrative Agent may from time to time specify.
Agreement means this Credit Agreement.
Annual Statement means the annual financial statement of any
Insurance Subsidiary as required to be filed with the Department of such
Insurance Subsidiary's domicile, together with all exhibits or schedules filed
therewith, prepared in conformity with SAP. References to amounts on particular
exhibits, schedules, lines, pages and columns of the Annual Statement are based
on the format promulgated by the Department for the 2000 Annual Statements. If
such format is changed in future years so that different information is
contained in such items or they no longer exist, it is understood that the
reference is to information consistent with that reported in the referenced item
in the 2000 Annual Statement of such Insurance Subsidiary.
Applicable Facility Fee Rate means the rate set forth below
"Facility Fee" on the Pricing Grid for the applicable Pricing Level.
Applicable Margin means (a) in the case of Offshore Rate Loans,
the rate set forth below "Offshore Rate" on the Pricing Grid for the applicable
Pricing Level and applicable type of Loan and (b) in the case of Base Rate
Loans, 0%.
Applicable Percentage means the Revolving Percentage or the Term
Percentage, as applicable.
Arranger means Banc of America Securities LLC in its capacity as
sole lead arranger and sole book manager.
Assignee is defined in Section 10.8(a).
Assignment and Acceptance is defined in Section 10.8(a).
Attorney Costs means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the reasonable
non-duplicative allocated cost of internal legal services and all disbursements
of internal counsel.
Authorized Officers means those officers of the Borrower whose
signatures and incumbency shall have been certified to the Administrative Agent
pursuant to Section 8.1(c).
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Bank Offering Memorandum means the Bank Offering Memorandum dated
November, 2001.
Base Rate means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by BofA
as its "prime rate." Such rate is a rate set by BofA based upon various factors
including BofA's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such rate
announced by BofA shall take effect at the opening of business on the day
specified in the public announcement of such change.
Base Rate Loan means a Loan that bears interest based on the Base
Rate.
BofA means Bank of America, N.A., a national banking association.
Borrowing means a borrowing hereunder consisting of Loans of the
same Type made to the Borrower on the same day by the Lenders under Article II,
and, other than in the case of Base Rate Loans, having the same Interest Period.
Borrowing Date means any date on which a Borrowing occurs under
Section 2.4.
Borrower is defined in the Preamble.
Borrower Reinsurance Agreement means any arrangement whereby any
Insurance Subsidiary, as reinsurer, agrees to indemnify any other insurance or
reinsurance company against all or a portion of the insurance or reinsurance
risks underwritten by such insurance or reinsurance company under any insurance
or reinsurance policy.
Business Day means any day other than a Saturday, Sunday or other
day on which commercial banks in Chicago, New York or Bermuda are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in the
London interbank market.
Capital Adequacy Regulation means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any Person controlling a bank.
Capital Lease Obligation means, as to any Person, the obligations
of such Person to pay rent or other amounts under any lease which is required to
be classified and accounted for as a capital lease on a balance sheet of such
Person in accordance with GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligation shall be the capitalized amount thereof determined
in accordance with GAAP.
Change in Control shall be deemed to have occurred if (a) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Borrower occurs; (b) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") other than
White Mountains Insurance Group Ltd., is or becomes, directly or indirectly, the
"beneficial owner," as defined in Rule 13d-3 under the Exchange Act, of
securities of the Borrower that
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represent 51% or more of the combined voting power of the Borrower's then
outstanding securities; (c) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new or replacement directors whose
election by the Board of Directors or whose nomination by the stockholders of
the Borrower was approved by a vote of a majority of the Directors of the
Borrower then still in office who are either directors or replacement directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Borrower's Board of Directors then in office; or (d) White Mountains Insurance
Group Ltd. ceases to (x) be the single largest shareholder of the Borrower or
(y) be directly or indirectly, the "beneficial owner," as defined in Rule 13d-3
under the Exchange Act, of securities of the Borrower that represent 10% or more
of the combined voting power of the Borrower's then outstanding securities.
Code means the Internal Revenue Code of 1986, as amended from
time to time, and regulations promulgated thereunder.
Commitments means the Revolving Loan Commitments and the Term
Loan Commitments.
Commitment Termination Event means (a) the occurrence of a
Default described in Section 7.1(e) or (b) the occurrence and continuance of any
other Event of Default and either (i) the Loans are declared to be due and
payable pursuant to Section 7.2, or (ii) in the absence of such declaration, the
Administrative Agent, acting at the direction of the Required Lenders, gives
notice to the Borrower that the Commitments have been terminated.
Compliance Certificate means a certificate substantially in the
form of Exhibit C with such changes as the Administrative Agent and the Borrower
may agree upon from time to time.
Computation Period means, for each Fiscal Quarter, the four
consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter.
Consent Period is defined in Section 2.13.
Consolidated Debt means the consolidated Debt (excluding Hedging
Obligations) of the Borrower and its Subsidiaries, including the Loans.
Consolidated Insurance Subsidiary Net Worth means the Net Worth
of all Insurance Subsidiaries on a consolidated basis.
Consolidated Net Income means, with respect to any Person, the
consolidated net income for such period as determined by GAAP, adjusted by
excluding, without duplication, to the extent included in calculating such
Consolidated Net Income, all extraordinary gains and losses.
Consolidated Net Worth means the Net Worth of the Borrower and
its Subsidiaries on a consolidated basis.
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Contingent Liability means any agreement, undertaking or
arrangement by which any Person (outside the ordinary course of business)
guarantees, endorses, acts as surety for or otherwise becomes or is contingently
liable for (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment by, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the Debt, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or for the payment of dividends or other distributions
upon the shares of any other Person or undertakes or agrees (contingently or
otherwise) to purchase, repurchase, or otherwise acquire or become responsible
for any Debt, obligation or liability or any security therefor, or to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition of any other
Person, or to make payment or transfer property to any other Person other than
for fair value received; provided, however, that obligations of each of the
Insurance Subsidiaries under Primary Policies or Borrower Reinsurance Agreements
which are entered into in the ordinary course of business (including security
posted by each of the Insurance Subsidiaries in the ordinary course of its
business to secure obligations thereunder) shall not be deemed to be Contingent
Liabilities of such Insurance Subsidiary or the Borrower for the purposes of
this Agreement. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the lesser of (i) the outstanding principal amount (or maximum permitted
principal amount, if larger) of the Debt, obligation or other liability
guaranteed or supported thereby or (ii) the maximum stated amount so guaranteed
or supported.
Contractual Obligation means, relative to any Person, any
obligation, commitment or undertaking under any agreement or other instrument to
which such Person is a party or by which it or any of its property is bound or
subject.
Cure Contributions means capital contributions or other equity
infusions to the Borrower made on or before the 30th day after the date the
Borrower has failed to comply with the covenants set forth in Section 6.1 or
Section 6.2.
Debt means, with respect to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money or in respect
of loans or advances; (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in respect
of letters of credit which have been drawn but not reimbursed by the Person for
whose account such letter of credit was issued within the later of (x) three
Business Days and (y) the applicable cure period and bankers' acceptances issued
for the account of such Person; (d) all Capital Lease Obligations of such
Person; (e) all Hedging Obligations of such Person; (f) to the extent required
to be included as liabilities in accordance with GAAP, all obligations of such
Person to pay the deferred purchase price of property or services; (g) Debt of
such Person secured by a Lien on property owned or being purchased by such
Person (including Debt arising under conditional sales or other title retention
agreements) whether or not such Debt is limited in recourse; (h) any Debt of
another Person secured by a Lien on any assets of such first Person, whether or
not such Debt is assumed by such first Person (it being understood that if such
Person has not assumed or otherwise become personally liable for any such Debt,
the amount of the Debt of such Person in connection therewith shall be limited
to the lesser of the face amount of such Debt and the fair market value of all
property of such Person securing such
5
Debt); (i) any Debt of a partnership in which such Person is a general partner
unless such debt is nonrecourse to such Person; and (j) all Contingent
Liabilities of such Person whether or not in connection with the foregoing;
provided that, notwithstanding anything to contrary contained herein, Debt shall
not include (x) unsecured current liabilities incurred in the ordinary course of
business and paid within 90 days after the due date (unless contested diligently
in good faith by appropriate proceedings and, if requested by the Administrative
Agent, reserved against in conformity with GAAP) other than liabilities that are
for money borrowed or are evidenced by bonds, debentures, notes or other similar
instruments or (y) any obligations of such Person under any Borrower Reinsurance
Agreement or any Primary Policy.
Debt Capital Refunding means a prepayment of Term Loans and/or a
reduction in the Revolving Loan Commitment made in connection with an Additional
Restricted Payment.
Default means any condition or event, which, after notice or
lapse of time or both, would constitute an Event of Default.
Department means the Minister of Finance of Bermuda or such other
appropriate Governmental Authority of the jurisdiction of domicile of any
Insurance Subsidiary.
Dollar(s) and the sign "$" means lawful money of the United
States of America.
Effective Date means the date on which the conditions precedent
for the effectiveness of this Agreement specified in Section 8.1 shall be met.
Eligible Assignee means (a) a commercial bank organized under the
laws of the United States or any state thereof or under the laws of Bermuda, and
having a combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting through a
branch or agency located in the United States; (c) a Person that is engaged in
the business of commercial banking and that is (i) a Subsidiary of a Lender,
(ii) a Subsidiary of a Person of which a Lender is a Subsidiary, (iii) a Person
of which a Lender is a Subsidiary, or (iv) administered or managed by a Lender
or other Person described in Subclause (c)(i), (ii) or (iii); and (d) mutual
funds, pension funds and other institutional investors (except an Affiliate of
the Borrower) regularly engaged in the making of commercial loans; provided,
that any Eligible Assignee which is not organized under the laws of the United
States or a state thereof must, on the date it becomes a Lender hereunder, make
the representation and give the documents required under Section 3.1(e).
ERISA means the Employee Retirement Income Security Act of 1974
and any regulations issued pursuant thereto.
ERISA Affiliate means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
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ERISA Event means (a) a Reportable Event (as defined in Section
4043 of ERISA and the regulations issued thereunder) with respect to a Pension
Plan (other than a Reportable Event for which the PBGC has waived the 30-day
notice requirement); (b) a withdrawal by the Borrower or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.
Event of Default means any of the events described in Section
7.1.
Executive Officer means, as to any Person, the president, the
chief financial officer, the chief executive officer, the general counsel, the
treasurer or the secretary.
Fair Market Value means (a) with respect to Cash and Permitted
Investments of the type described in clauses (a), (b), (c), (d), (e) or (f) of
the definition of "Permitted Investments," the amounts thereof, (b) with respect
to any publicly-traded security (other than those set forth in clause (a)) the
closing price for such security on the largest exchange on which security is
traded (or if not traded on an exchange, the average of the closing bid and ask
prices quoted over-the-counter on the date of the determination) as such prices
are reported in the Wall Street Journal (Northeast Edition) or if not so
reported, in any nationally recognized financial journal or newspaper and (c)
with respect to any Investment (other than those set forth in clause (a) and
(b)), the price for such Investment on the date of calculation obtained from a
generally recognized source approved by the Administrative Agent or the most
recent bid quotation from such approved source (or, if no generally recognized
source exists as to a particular Investment, any other source specified by the
Borrower to which the Administrative Agent does not reasonably object).
Federal Funds Rate means, for any day, the rate per annum
(rounded upwards to the nearest 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
Final Maturity Date means the third anniversary of the Effective
Date.
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Fiscal Quarter means any quarter of a Fiscal Year.
Fiscal Year means any period of twelve consecutive calendar
months ending on the last day of December.
FRB means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.
GAAP means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination.
Governmental Authority means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Hedging Obligations means, with respect to any Person, the
liability of such Person under any futures contract or options contract,
interest rate swap agreements and interest rate collar agreements and all other
agreements or arrangements (other than Retrocession Agreements), designed to
protect such Person against fluctuations in interest rates or currency exchange
rates. Debt under a Hedging Obligation shall be the amount of such Person's net
obligation, if any, under each Hedging agreement (determined on the
xxxx-to-market value for such agreement based upon a readily available quotation
provided by a recognized dealer in such type of Hedging agreement).
Indemnified Liabilities is defined in Section 10.5.
Indemnified Person is defined in Section 10.5.
Insurance Code means, with respect to any Insurance Subsidiary,
the Insurance Code of such Insurance Subsidiary's domicile and any successor
statute of similar import, together with the regulations thereunder, as amended
or otherwise modified and in effect from time to time. References to sections of
the Insurance Code shall be construed to also refer to successor sections.
Insurance Policies means policies purchased from insurance
companies by the Borrower or any of its Subsidiaries, for its own account to
insure against its own liability and property loss (including, without
limitation, casualty, liability and workers' compensation insurance).
Insurance Subsidiary means Montpelier Reinsurance Ltd. and any
other Subsidiary of the Borrower created after the Effective Date which is
licensed by any Governmental Authority to engage in the insurance business.
8
Interest Payment Date means, as to any Offshore Rate Loan, the
last day of each Interest Period applicable to such Loan and if an Interest
Period exceeds three months, the day three months after the commencement of the
Interest Period and the last day thereof and, as to any Base Rate Loan, the last
Business Day of each calendar quarter.
Interest Period means as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period;
(iii) no Interest Period for any Revolving Loan shall extend
beyond the Revolving Commitment Termination Date; and
(iv) no Interest Period for any Term Loan shall extend beyond the
Final Maturity Date.
Invested Assets means cash, cash equivalents, short term
investments, investments held for sale and any other assets which are treated as
investments under GAAP. Investments in Subsidiaries are not Invested Assets.
Investment means, as to any Person, any investment of any Person,
whether by means of security purchase, capital contribution, loan, time deposit
or otherwise, and shall include without limitation Permitted Investments.
IRS means the U.S. Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
Judgment Currency is defined in Section 10.19.
Lenders is defined in the Preamble.
Lending Office means, as to any Lender, the office or offices of
such Lender specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office," as the case may be, on Schedule 10.2, or such other
office or offices as such Lender may from time to time notify the Borrower and
the Administrative Agent.
9
Leverage Ratio means the ratio of (a) Consolidated Debt to (b)
the sum of Tangible Net Worth plus Consolidated Debt.
License(s) means, as to any Insurance Subsidiary, all permits or
authorization to transact the insurance business (including, without
limitation), licenses or certificates of authority from the applicable
Department.
Lien means, when used with respect to any Person, any interest in
any real or personal property, asset or other right held, owned or being
purchased or acquired by such Person for its own use, consumption or enjoyment
which secures payment or performance of any obligation and shall include any
mortgage, lien, pledge, encumbrance, charge, retained title of a conditional
vendor or lessor, or other security agreement, mortgage, deed of trust, chattel
mortgage, assignment, pledge, retention of title, financing or similar statement
or notice, or other encumbrance arising as a matter of law, judicial process or
otherwise.
Loan means an extension of credit by a Lender to the Borrower
under Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a
"Type" of Loan).
Loan Documents means this Agreement, any Note and all other
agreements, instruments, certificates, documents, schedules or other written
indicia delivered by the Borrower or any of its Subsidiaries in connection with
any of the foregoing.
Margin Stock means "margin stock" as such term is defined in
Regulation U or X of the FRB.
Material Adverse Effect means, the occurrence of an event, which
has a materially adverse effect on:
(a) the business, assets, liabilities, operations, financial
condition or prospects of the Borrower and its Subsidiaries taken as a
whole; or
(b) the ability of the Borrower to perform any of its payment or
other material obligations under any of the Loan Documents; or
(c) the legality, validity, binding effect or enforceability
against the Borrower of any Loan Document that by its terms purports to
bind the Borrower.
Multiemployer Plan means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.
Net Debt Proceeds means, relative to Debt described in clause (a)
or (b) of the definition of Debt issued or incurred by the Borrower after the
Effective Date (other than Debt under this Agreement and Debt owed to the
Borrower by any of its Subsidiaries), the excess of
(a) the gross cash proceeds received by the Borrower
10
over
(b) all reasonable underwriting commissions, private placement
fees, legal, investment banking, and accounting fees and disbursements,
printing expenses, and any governmental or exchange fees incurred (or
reasonably expected to be incurred) in connection with such issuance or
incurrence which are not payable to Affiliates of the Borrower.
Net Equity Proceeds means, relative to the sale by the Borrower
of any stock, warrants or other equity securities which qualify as equity under
GAAP (other than Cure Contributions), the excess of
(a) the gross cash proceeds received by the Borrower from such
sale or contribution
over
(b) all reasonable underwriting commissions, private placement
fees, legal, investment banking, and accounting fees and disbursements,
printing expenses, and any governmental or exchange fees incurred (or
reasonably expected to be incurred) in connection with such sale which
are not payable to Affiliates of the Borrower.
Net Worth means, with respect to any Person, the consolidated net
worth of such Person, calculated in accordance with GAAP.
Non-Insurance Subsidiary means any Subsidiary of the Borrower
which is not an Insurance Subsidiary.
Note means a promissory note executed by the Borrower in favor of
a Lender pursuant to Section 2.3(b), in substantially the form of Exhibit D.
Notice of Borrowing means a notice in substantially the form of
Exhibit A.
Notice of Conversion/Continuation means a notice in substantially
the form of Exhibit B.
Obligations means all obligations and liabilities of the Borrower
to the Administrative Agent or any of the Lenders, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, primary or
secondary, joint or several, recourse or nonrecourse or now or hereafter
existing or due or to become due, whether for principal, interest, fees,
expenses, lease obligations, claims, indemnities or otherwise, under or in
connection with this Agreement or any other Loan Document.
Offshore Rate means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/100th of 1%) determined by the
Administrative Agent as follows:
Offshore Rate = LIBOR
--------------------------------------------------
1.00 - Eurodollar Reserve Percentage
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Where,
Eurodollar Reserve Percentage means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Lender) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
LIBOR means (a) the rate per annum equal to the rate (carried out to the fifth
decimal place) determined by the Administrative Agent to be the offered rate
that appears on Page 3750 of the Telerate Screen for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period determined at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period.
(b) in the event the rate referenced in the preceding subsection
(a) does not appear on such page or service or such page or service shall
cease to be available, the rate per annum (carried out to the fifth decimal
place) equal to the rate determined by the Administrative Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period, or
(c) in the event the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum determined by
the Administrative Agent as the rate of interest at which Dollar deposits
(for delivery on the first day of such Interest Period) in same day funds
in the approximate amount of the applicable Offshore Rate Loan and with a
term equivalent to such Interest Period would be offered by its London
Branch to major banks in the offshore Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore Rate Loans
then outstanding as of the effective date of any change in the Eurodollar
Reserve Percentage.
Offshore Rate Loan means a Loan that bears interest based on the
Offshore Rate.
Ordinary Course Litigation is defined in Section 4.4.
Organization Documents means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
Original Currency is defined in Section 10.19.
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Other Taxes means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
Participants is defined in Section 10.8(d).
PBGC means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
Pension Plan means any "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that
is subject to Title IV of ERISA and is sponsored or maintained by the Borrower
or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer (as described in Section 4064(a) of ERISA) has made contributions at
any time during the immediately preceding five plan years.
Permitted Investment means, at any time:
(a) any evidence of Debt issued or guaranteed by the United
States Government;
(b) commercial paper which is issued by
(i) a corporation (except an Affiliate of the Borrower) rated at
least A-2 by S&P or P-2 by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers' acceptance or
eurodollar time deposit, (i) which is issued by either
(A) a financial institution which is rated at least
BBB- by S&P or Baa3 by Xxxxx'x, or
(B) any Lender, or
(ii) such Investment is fully insured by the Federal Deposit
Insurance Corporation;
(d) any repurchase agreement with a term of one year or less
which
(i) is entered into with
(A) any Lender, or
(B) any other commercial banking institution of the
stature referred to in clause (c)(i), and
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(ii) is secured by a fully perfected Lien in any obligation of
the type described in any of clauses (a) through (c) that has a market
value at the time such repurchase agreement is entered into of not
less than 100% of the repurchase obligation of such Lender (or other
commercial banking institution) thereunder;
(e) investments in money market funds that invest solely in
Permitted Investments described in clauses (a) through (d);
(f) investments in short-term asset management accounts offered
by any Lender for the purpose of investing in loans to any corporation
(other than an Affiliate of the Borrower) organized under the laws of any
state of the United States or of the District of Columbia and rated at
least A-1 by S&P or P-1 by Xxxxx'x;
(g) investments in non-equity securities which are rated at least
BBB- by S&P or Baa3 by Xxxxx'x; and
(h) investments in equity securities which are traded on a
national stock exchange.
Permitted Restricted Payment - is defined Section 6.12(a).
Person means any natural person, corporation, limited liability
company, partnership, firm, trust, joint venture, joint stock company,
unincorporated association, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
Plan means any "employee benefit plan" (as such term is defined
in Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
Pricing Grid means the Pricing Grid set forth on Schedule 1.2.
Pricing Level means the Pricing Level on the Pricing Grid which
is applicable from time to time and in accordance with Section 2.7(c).
Primary Policies means any insurance policies issued by an
Insurance Subsidiary.
Purchase Money Debt means Debt incurred after the Effective Date
in connection with the acquisition of fixed assets which Debt is secured by a
Lien attaching only to the property being acquired.
Quarterly Statement means the quarterly financial statement of
any Insurance Subsidiary as required to be filed with the Department (or similar
Governmental Authority) of such Insurance Subsidiary's domicile, together with
all exhibits or schedules filed therewith, prepared in conformity with SAP.
Reinstatement Premiums means premiums charged to insureds to
reinstate or continue coverage under a Reinsurance Policy after a loss.
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Required Lenders means, at any time, Lenders then having a Voting
Percentage of more than 50%.
Requirement of Law for any Person means the Organization
Documents of such Person, and any law (including all laws relating to
environmental, health, safety and land use matters), treaty, rule, ordinance or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
Restricted Payment means any dividend or other distribution
(whether in cash, securities or other property) with respect to any capital
stock of the Borrower or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such capital stock or of any option, warrant or other right to acquire any
such capital stock.
Retrocession Agreements means any agreement, treaty,
certificate or other arrangement whereby any Insurance Subsidiary cedes to
another insurer all or part of such Insurance Subsidiary's liability under a
policy or policies of insurance reinsured by such Insurance Subsidiary.
Revolving Commitment Termination Date means the earliest to
occur of (a) December 11, 2002 as such date may be extended pursuant to Section
2.13 or (b) the date on which any Commitment Termination Event occurs.
Revolving Lender means, at any time, any Lender which then has
a Revolving Loan Commitment or is owed a Revolving Loan.
Revolving Percentage means, relative to any Revolving Lender,
the percentage which (a) the amount of such Revolving Lender's Revolving Loan
Commitment or, if no Revolving Loan Commitments are then outstanding, the
aggregate principal amount of Revolving Loans of such Revolving Lender is to (b)
the aggregate amount of the Revolving Loan Commitments or, if no Revolving Loan
Commitments are then outstanding, the aggregate principal amount of Revolving
Loans of all Revolving Lenders. The initial Revolving Percentage of each
Revolving Lender is set forth opposite such Revolving Lender's name on Schedule
2.1.
Revolving Loan - see Section 2.1(a).
Revolving Loan Commitment means as to any Revolving Lender,
the commitment of such Lender to make Revolving Loans pursuant to Section
2.1(a). The initial amount of the Revolving Loan Commitment of each Revolving
Lender is set forth on Schedule 2.1.
SAP means, as to each Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the Department (or other similar
authority) in such Insurance Subsidiary's domicile for the preparation of Annual
Statements and other financial reports by insurance corporations of the same
type as such Insurance Subsidiary.
15
Statutory Net Written Premiums means as of any date, with
respect to any Insurance Subsidiary, the amount shown on Form 2, Line 3 of its
most recently filed Annual Statement minus Reinstatement Premiums or, with
respect to any Fiscal Quarter occurring after the then most recent annual
statement, an amount calculated in the same manner.
Subsidiary means, with respect to any Person, any Person of
which the indicated Person and/or its other Subsidiaries, individually or in the
aggregate, own, directly or indirectly, such number of outstanding shares as
have at the time of any determination hereunder more than 50% of the ordinary
voting power. Unless otherwise specified, "Subsidiary" shall mean a Subsidiary
of the Borrower.
Tangible Net Worth means as to the Borrower, Consolidated Net
Worth minus intangible assets minus capitalized expenses.
Taxes means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Administrative Agent,
such taxes (including income taxes or franchise taxes) as are imposed on or
measured by each Lender's net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or the Administrative
Agent, as the case may be, is organized or maintains a lending office.
Term Loan - see Section 2.1(b).
Term Loan Lender means, at any time, any Lender which then has
a Term Loan Commitment or is owed a Term Loan. Term Percentage means, relative
to any Term Loan Lender, the percentage which (a) the amount of such Term Loan
Lender's Term Loan Commitment or, if no Term Loan Commitments are then
outstanding, the aggregate principal amount of Term Loans of such Term Loan
Lender is to (b) the aggregate amount of the Term Loan Commitments or, if no
Term Loan Commitments are then outstanding, the aggregate principal amount of
Term Loans of all Term Loan Lenders. The initial Term Percentage of each Term
Loan Lender is set forth opposite such Term Loan Lender's name on Schedule 2.1.
Term Loan Commitment means, as to any Lender, the Commitment
of such Lender to make Term Loans pursuant to Section 2.1(b). The initial amount
of the Term Loan Commitment of each Lender is set forth on Schedule 2.1.
Type see the definition of "Loan."
Unencumbered Assets means Invested Assets of the Borrower and
its Subsidiaries which are not subject to any Liens.
Unfunded Pension Liability means the excess of a Pension
Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Pension Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.
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Voting Percentage means relative to any Lender at any time,
the percentage which
(a) the sum of (i) such Lender's Revolving Loan Commitment or,
if no Revolving Loan Commitments are then outstanding, the aggregate
principal amount of Revolving Loans of such Lender plus (ii) such
Lender's Term Loan Commitment or, if no Term Loan Commitments are then
outstanding, the aggregate principal amount of Term Loans of such
Lender,
is of
(b) the sum of (i) the then aggregate amount of all Revolving
Commitments or, if no Revolving Commitments are then outstanding, the
aggregate principal amount of Revolving Loans of all Revolving Lenders
plus (ii) the then aggregate amount of all Term Loan Commitments or, if
no Term Loan Commitments are then outstanding, the aggregate principal
amount of Term Loans of all Term Lenders,
in each case as shown in the records of the Administrative Agent.
SECTION 1.2 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
17
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Administrative
Agent, the Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent's or Lenders'
involvement in their preparation.
SECTION 1.3 Accounting Principles. Unless otherwise defined or
the context otherwise requires, all financial and accounting terms used herein
or in any of the Loan Documents or any certificate or other document made or
delivered pursuant hereto shall be defined in accordance with GAAP or SAP, as
the context may require. When used in this Agreement, the term "financial
statements" shall include the notes and schedules thereto. In addition, when
used herein, the terms "best knowledge of" or "to the best knowledge of" any
Person shall mean matters within the actual knowledge of such Person (or an
Executive Officer or general partner of such Person) or which should have been
known by such Person after reasonable inquiry.
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT
SECTION 2.1 Commitments. Upon and subject to the terms and
conditions hereof, each of the Lenders severally and for itself agrees as
follows:
(a) Revolving Loan Commitment. Each Revolving Lender severally
agrees to make revolving loans to the Borrower (collectively called the
"Revolving Loans" and individually called a "Revolving Loan") from time to time
on any Business Day during the period from the Effective Date to the Revolving
Commitment Termination Date in an aggregate amount not to exceed such Revolving
Lender's Revolving Loan Commitment; provided, however, that, after giving effect
to any Borrowing, the aggregate principal amount of all outstanding Revolving
Loans shall not at any time exceed the combined Revolving Loan Commitments.
Within the limits of each Revolving Lender's Revolving Loan Commitment, and
subject to the other terms and conditions hereof, the Borrower may borrow
Revolving Loans under this Section 2.1(a), prepay Revolving Loans under Section
2.6 and reborrow Revolving Loans under this Section 2.1(a).
(b) Term Loans. Each Term Lender severally agrees to make a
Term Loan to the Borrower (collectively called the "Term Loans" and individually
called a "Term Loan") on the Effective Date in such Term Lender's Term
Percentage of such aggregate amounts as the Borrower may request from all Term
Lenders under the Term Loan Commitments, provided that the aggregate principal
amount of all Term Loans shall not exceed $150,000,000 and no Term Lender's Term
Loan shall exceed its Term Loan Commitment. Each Term Lender's Term Loan
Commitment shall expire concurrently with the making of such Term Lender's Term
Loan.
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SECTION 2.2 Termination or Reduction of Commitments. (a) The
Borrower may, upon not less than five Business Days' prior notice to the
Administrative Agent, terminate the Revolving Commitment, or permanently reduce
the Revolving Loan Commitments by an aggregate minimum amount of $5,000,000 or
any multiple of $1,000,000 in excess thereof; unless, in the case of the
Revolving Loan Commitment, after giving effect thereto and to any prepayments of
Revolving Loans to be made on the effective date thereof, the then-outstanding
principal amount of the Revolving Loans would exceed the amount of the combined
Revolving Loan Commitments then in effect.
(b) Mandatory Commitment Reduction. On each date a Revolving
Loan Commitment reduction is required pursuant to Section 2.6(b), the Revolving
Loan Commitments shall, without any further action, automatically and
permanently be reduced by such amount.
(c) Permanent Reduction. Once reduced in accordance with this
Section, the Revolving Commitments may not be increased. Any reduction of the
Revolving Loan Commitments shall be applied to each Revolving Lender according
to its Revolving Percentage.
SECTION 2.3 Loan Accounts. (a) The Loans made by each Lender
shall be evidenced by one or more loan accounts or records maintained by such
Lender in the ordinary course of business. The loan accounts or records
maintained by each Lender shall be conclusive, absent manifest error, of the
amount of the Loans made by such Lender to the Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Loans.
(b) Upon the written request of any Lender made through the
Administrative Agent, the Loans made by such Lender may be evidenced by one or
more Notes, instead of loan accounts. Each such Lender shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan made
by it and the date and amount of each payment of principal made by the Borrower
with respect thereto. Each such Lender is irrevocably authorized by the Borrower
to endorse its Note(s) and each such Lender's Note shall be conclusive, absent
manifest error; provided, however, that the failure of a Lender to make, or an
error in making, a notation thereon with respect to any Loan shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any such
Note to such Lender.
SECTION 2.4 Procedure for Borrowing. (a) Each Borrowing shall
be made upon the Borrower's telephonic notice followed by irrevocable written
notice delivered to the Administrative Agent in the form of a Notice of
Borrowing (which notice must be received by the Administrative Agent prior to
10:00 a.m. (New York time)) (x) three Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans; and (y) one Business Day
prior to the requested Borrowing Date, in the case of Base Rate Loans,
specifying:
(i) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in
excess thereof;
(ii) the requested Borrowing Date, which shall be a Business
Day;
(iii) the Type of Loans comprising the Borrowing; and
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(iv) the duration of the Interest Period applicable to any
Offshore Loans included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any Borrowing
comprised of Offshore Rate Loans, such Interest Period shall be three
months.
(b) The Administrative Agent will promptly notify each Lender
of its receipt of any Notice of Borrowing and of the amount of such Lender's
Applicable Percentage of such Borrowing.
(c) Each Lender will make the amount of its Applicable
Percentage of each Borrowing available to the Administrative Agent for the
account of the Borrower at the Administrative Agent's Payment Office by 11:00
a.m. (New York time) on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. The proceeds of all such
Loans will then be made available to the Borrower by the Administrative Agent by
wire transfer in accordance with written instructions provided to the
Administrative Agent by the Borrower of like funds as received by the
Administrative Agent.
(d) After giving effect to any Borrowing, there may not be
more than eight (8) different Interest Periods in effect.
SECTION 2.5 Conversion and Continuation Elections. (a) The
Borrower may, upon irrevocable written notice to the Administrative Agent in
accordance with Section 2.5(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the
case of any other Type of Loans, to convert any such Loans (or any part
thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof) into Loans of any
other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than $5,000,000, or that
is in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/
Continuation to be received by the Administrative Agent not later than 10:00
a.m. (New York time) at least (x) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans; and (y) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(i) the proposed Conversion/Continuation Date;
20
(ii) the aggregate amount of Loans to be converted or
continued and whether such Loans are Revolving Loans or Term Loans;
(iii) the Type of Loans resulting from the proposed conversion
or continuation; and
(iv) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans or if any Default or Event
of Default then exists, the Borrower shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period.
(d) The Administrative Agent will promptly notify each
applicable Lender of its receipt of a Notice of Conversion/Continuation, or, if
no timely notice is provided by the Borrower, the Administrative Agent will
promptly notify each applicable Lender of the details of any automatic
conversion. All conversions and continuations shall be made ratably according to
the respective outstanding principal amounts of the Loans with respect to which
the notice was given held by each applicable Lender.
(e) After giving effect to any conversion or continuation of
Loans, there may not be more than eight (8) different Interest Periods in
effect.
SECTION 2.6 Repayments.
(a) Voluntary Prepayments. Subject to Section 3.4, the
Borrower may, at any time or from time to time, without premium or penalty, upon
not less than three (3) Business Days' irrevocable notice to the Administrative
Agent, ratably prepay Loans in whole or in part, in minimum amounts of
$1,000,000 or any multiple of $500,000 in excess thereof. Such notice of
prepayment shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid. The Administrative Agent will promptly notify each
applicable Lender of its receipt of any such notice, and of such Lender's
Applicable Percentage of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Term Loans once repaid may not be reborrowed. Prepayments of Term Loans shall be
applied in the inverse order of maturity.
(b) Debt Capital Refunding. Simultaneously with each
Additional Restricted Payment, the Borrower shall make a Debt Capital Refunding
in an amount equal to at least 43% of such Additional Restricted Payment. Such
Debt Capital Refunding shall be applied as follows: (i) Debt Capital Refundings
shall first be applied to repay Term Loans and (ii) to the extent there are any
Debt Capital Refunding amounts remaining after the application required pursuant
to clause (i), the Revolving Loan Commitments shall be reduced in an amount
equal to such unapplied Debt Capital Refunding and, to the extent such Revolving
Loan Commitment reduction requires repayment of Revolving Loans, such amount of
Revolving Loans shall be repaid.
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(c) Other Mandatory Repayments.
(i) If at any time the aggregate outstanding principal amount
of the Revolving Loans shall exceed the Revolving Loan Commitment in
effect at such time, the Borrower shall make a principal repayment of
the Revolving Loans in an amount equal to such excess.
(i) The Borrower shall, immediately upon any acceleration of
the maturity date of the Loans pursuant to Section 7.2, repay the
Loans.
(ii) The Borrower shall repay to the Revolving Lenders on the
Revolving Commitment Termination Date the aggregate principal amount of
Revolving Loans outstanding on such date.
(iii) The Borrower shall repay to the Term Lenders on the
Final Maturity Date the aggregate principal amount of Term Loans
outstanding on such date.
(d) Each prepayment of Offshore Rate Loans shall be
accompanied by payment of accrued interest to the date of prepayment on the
amount prepaid and amounts required pursuant to Section 3.4.
SECTION 2.7 Interest. (a) Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Offshore Rate or the Base Rate, as the case may be
(and subject to the Borrower's right to convert to other Types of Loans under
Section 2.5), plus the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any prepayment
of Offshore Rate Loans under Section 2.6 for the portion of the Loans so prepaid
and upon payment (including prepayment) in full thereof and, during the
existence of any Event of Default, interest shall be paid on demand of the
Administrative Agent at the request or with the consent of the Required Lenders.
(c) Any change in the Applicable Margin or Applicable Facility
Fee Rate resulting from a change in the Leverage Ratio shall be effective as of
the first Business Day after the Borrower delivers the financial statements
required by Section 5.1(a)(i) or 5.1(a)(ii), as applicable, and the Compliance
Certificate required by Section 5.1(f) based on the Leverage Ratio as of the
last day of the applicable Fiscal Quarter; provided, however, that until receipt
by the Administrative Agent and each Lender of the financial statements required
by Section 5.1(a)(i) and the Compliance Certificate required by Section 5.1(f)
for the Fiscal Quarter ending March 31, 2002, the Pricing Level in effect from
and after the Effective Date shall be Pricing Level II.
(d) Notwithstanding clause (a) of this Section, after
acceleration or, at the election of the Required Lenders while any Event of
Default exists, the Borrower shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the principal amount of
all outstanding Loans, at a rate per annum which is determined by adding 2% per
annum to the Applicable Margin then in effect for such Loans; provided, however,
that, on and after the expiration of any Interest Period applicable to any
Offshore Rate Loan
22
outstanding on the date of occurrence of such Event of Default or acceleration,
the principal amount of such Loan shall, during the continuation of such Event
of Default or after acceleration, bear interest at a rate per annum equal to the
Base Rate plus 2%.
(e) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Lender hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest rate
of interest that may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrower shall pay such Lender interest at the
highest rate permitted by applicable law.
SECTION 2.8 Fees. (a) Agent Fees. The Borrower shall pay fees
to the Administrative Agent for the Administrative Agent's own account, as
required by the letter agreement ("Fee Letter") between the Borrower and the
Administrative Agent dated November 19, 2001 and as the Borrower and the
Administrative Agent may agree from time to time.
(b) Facility Fees. The Borrower shall pay to the
Administrative Agent for the account of each Revolving Lender a Facility Fee on
such Revolving Lender's Revolving Loan Commitments, computed on a quarterly
basis in arrears on the last Business Day of each calendar quarter based upon
the daily Revolving Loan Commitment for that quarter as calculated by the
Administrative Agent, equal to the Applicable Facility Fee Rate. Such Facility
Fee shall accrue, from the Effective Date to the date the Revolving Loan
Commitments have been terminated and all Revolving Loans have been repaid and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December commencing on March 31, 2002, with the final
payment to be made on the date the Revolving Loan Commitments have been
terminated and all Revolving Loans have been repaid. The Facility Fees provided
in this subsection shall accrue at all times after the above-mentioned
commencement date, including at any time during which one or more conditions in
Section 8.3 are not met.
SECTION 2.9 Computation of Fees and Interest. (a) All
computations of fees and interest (other than interest on Base Rate Loans) shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more interest being paid than if computed on the basis of a 365-day year).
Interest on Base Rate Loans shall be computed on the basis of a 365/366-day year
and actual days elapsed. Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof to
the last day thereof.
(b) Each determination of an interest rate by the
Administrative Agent shall be conclusive and binding on the Borrower and the
Lenders in the absence of manifest error.
SECTION 2.10 Payments by the Borrower. (a) All payments to be
made by the Borrower shall be made without set-off, recoupment or counterclaim.
Except as otherwise expressly provided herein, all payments by the Borrower
shall be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in Dollars and in
immediately available funds, no later than 11:00 a.m. (New York time) on the
date specified herein. The Administrative Agent will promptly distribute to each
23
applicable Lender its Applicable Percentage (or other applicable share as
expressly provided herein) of such payment in like funds as received. Any
payment received by the Administrative Agent later than 11:00 a.m. (New York
time) shall be deemed to have been received on the following Business Day and
any applicable interest or fee shall continue to accrue to such Business Day.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Administrative Agent receives notice from the
Borrower prior to the date on which any payment is due to the Lenders that the
Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each applicable Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower has
not made such payment in full to the Administrative Agent, each applicable
Lender shall repay to the Administrative Agent on demand such amount distributed
to such Lender, together with interest thereon at the Federal Funds Rate for
each day from the date such amount is distributed to such Lender until the date
repaid.
SECTION 2.11 Payments by the Lenders to the Administrative
Agent. (a) Unless the Administrative Agent receives notice from a Lender on or
prior to the Effective Date or, with respect to any Borrowing after the
Effective Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Administrative Agent for the account of the Borrower the amount of that Lender's
Applicable Percentage of the Borrowing, the Administrative Agent may assume that
each applicable Lender has made such amount available to the Administrative
Agent in immediately available funds on the Borrowing Date and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent any Lender shall not have made its full amount available to
the Administrative Agent in immediately available funds and the Administrative
Agent in such circumstances has made available to the Borrower such amount, that
Lender shall on the Business Day following such Borrowing Date make such amount
available to the Administrative Agent, together with interest at the Federal
Funds Rate for each day during such period. A notice of the Administrative Agent
submitted to any Lender with respect to amounts owing under this subsection (a)
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to the Administrative Agent shall constitute such Lender's Loan on
the date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the Borrower of such
failure to fund and, upon demand by the Administrative Agent, the Borrower shall
pay such amount to the Administrative Agent for the Administrative Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
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(b) The failure of any Lender to make any Loan on any
Borrowing Date shall not relieve any other Lender of any obligation hereunder to
make a Loan on such Borrowing Date, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender on
any Borrowing Date.
SECTION 2.12 Sharing of Payments, Etc. If, other than as
expressly provided elsewhere herein, any Lender shall obtain on account of the
Loans made by it any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its Applicable
Percentage, such Lender shall immediately (a) notify the Administrative Agent of
such fact, and (b) purchase from the other applicable Lenders such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender
the purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.10) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments.
SECTION 2.13 Revolving Commitment Termination Date Extension.
(a) The Borrower may, by notice to the Administrative Agent given not more than
75 days and not less than 45 days prior to the then scheduled Revolving
Commitment Termination Date, request that the Revolving Lenders extend the
Revolving Commitment Termination Date for 364 days after the then scheduled
Revolving Commitment Termination Date. The Administrative Agent shall notify the
Revolving Lenders of its receipt of any notice (the "Extension Request Date")
given pursuant to this Section 2.13(a) within two Business Days after the
Administrative Agent's receipt thereof. Each Revolving Lender (a "Consenting
Revolving Lender") may, by irrevocable notice to the Borrower and the
Administrative Agent delivered to the Borrower and the Administrative Agent not
later than 15 days after the Extension Request Date (the "Consent Period"),
consent to such extension of the Revolving Commitment Termination Date, which
consent may be given or withheld by each Revolving Lender in its absolute and
sole discretion. Subject to Section 2.13(c), any such extensions shall take
effect on and as of the then scheduled Revolving Commitment Termination Date.
The Administrative Agent shall promptly notify the Borrower as to whether the
Lenders have consented to such extension.
(b) Withdrawing Revolving Lenders. No extension pursuant to
Section 2.13(a) shall be effective with respect to a Revolving Lender that
either (i) by a notice (a "Withdrawal Notice") delivered to the Borrower and the
Administrative Agent, declines to consent to such extension or (ii) has failed
to respond to the Borrower and the Administrative
25
Agent within the Consent Period (each such Revolving Lender giving a Withdrawal
Notice or failing to respond in a timely manner being "Withdrawing Revolving
Lender").
(c) Replacement of Withdrawing Revolving Lender. The Borrower
shall have the right during the period following the earlier of (i) the end of
the Consent Period and (ii) receipt of notice from the Administrative Agent
pursuant to clause (b) above, to replace the Withdrawing Revolving Lender with
an existing Revolving Lender or a new Revolving Lender who consents to the
extension of the Revolving Commitment Termination Date (a "Replacement Revolving
Lender"). In the event the Borrower has not replaced the Withdrawing Revolving
Lender within said period, the Borrower may request the Consenting Revolving
Lenders to reduce the Commitments by the amount of the Withdrawing Revolving
Lender's Commitment and extend the Revolving Commitment Termination Date which
consent may be given or withheld by each Consenting Revolving Lender in its sole
discretion. In the event all of the Consenting Revolving Lenders agree to such
reduction and extension then, subject to compliance with Section 2.2, on and as
of the then scheduled Revolving Commitment Termination Date (x) the Commitment
shall be reduced by an amount equal to the Commitment of the unreplaced
Withdrawing Revolving Lender, (y) such Withdrawing Revolving Lender shall cease
to be a Revolving Lender under this Agreement and (z) the Revolving Commitment
Termination Date shall be extended. In the event the Withdrawing Revolving
Lender has not been replaced or all of the Consenting Revolving Lenders have not
consented to reduction of the Commitment pursuant to this Section 2.13(c), the
Revolving Commitment Termination Date shall not be extended.
(d) Assignment by Withdrawing Revolving Lender. A Withdrawing
Revolving Lender shall be obliged, at the request of the Borrower and subject to
the Withdrawing Revolving Lender receiving payment in full of all amounts owing
to it under this Agreement concurrently with the effectiveness of an assignment,
to assign, without recourse or warranty and by an Assignment and Acceptance, all
of its rights and obligations hereunder to any Replacement Revolving Lender
nominated by the Borrower and willing to accept such assignment; provided that
such assignee satisfies all the requirements of this Agreement and such
assignment is consented to by the Administrative Agent, which consent shall not
be withheld or delayed unreasonably.
(e) Scheduled Revolving Commitment Termination Date. If the
scheduled Revolving Commitment Termination Date shall have been extended in
respect of Consenting Revolving Lenders and any Replacement Revolving Lender in
accordance with Section 2.13(a), all references herein to the "Revolving
Commitment Termination Date" shall refer to the Revolving Commitment Termination
Date as so extended. The Revolving Commitment Termination Date may be extended
twice.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.1 Taxes. (a) Any and all payments by the Borrower to
each Lender or the Administrative Agent under this Agreement and any other Loan
Document shall be
26
made free and clear of, and without deduction or withholding for any Taxes. In
addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Lender and the Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by the Lender or the Administrative Agent and
any liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto. Payment under this indemnification
shall be made within 30 days after the date the Lender or the Administrative
Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section) such Lender or the Administrative Agent, as the case may
be, receives an amount equal to the sum it would have received had no
such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay, without duplication, to each
Lender or the Administrative Agent for the account of such Lender, at
the time interest is paid, all additional amounts which the respective
Lender specifies as necessary to preserve the after-tax yield the
Lender would have received if such Taxes or Other Taxes had not been
imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to the Administrative Agent.
(e) Each (i) Lender which is not organized under the laws of
the United States or a state thereof hereby agrees, to the extent permitted by
applicable law (including any applicable double taxation treaty), to execute and
deliver to the Borrower and the Administrative Agent on or before the first
scheduled payment date (or, if later, the date it becomes a party to this
Agreement), a properly completed IRS Form W-8BEN, or, such other form or forms
as may be required under the Code or other laws of the United States as a
condition to exemption from United States withholding tax. Such Lender agrees to
promptly notify the Administrative Agent and the Borrower of any change in
circumstances or Requirement of Law which would modify or render invalid any
claimed exemption.
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(i) Each Lender hereby represents and warrants to the Borrower
that on the Effective Date (or, if later, the date it becomes a party
to this Agreement) it is entitled to receive payments of principal of,
and interest on, Loans made by such Lender without withholding or
deduction of U.S. withholding tax.
(ii) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Borrower
and/or the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Borrower and/or the
Administrative Agent of a change in circumstances which rendered the
exemption from withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Borrower and/or the Administrative
Agent fully for all amounts paid, directly or indirectly, by the
Borrower and/or the Administrative Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Borrower and/or the
Administrative Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Lenders
under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Administrative Agent.
(f) If the Borrower is required to pay additional amounts to
any Lender or the Administrative Agent pursuant to Section 3.1(c), then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender or inconsistent with such Lender's internal
policies.
SECTION 3.2 Illegality. (a) If any Lender determines that the
introduction of any Requirement of Law, or any change in any Requirement of Law,
or in the interpretation or administration of any Requirement of Law, has made
it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Lender to the Borrower
through the Administrative Agent, any obligation of that Lender to make Offshore
Rate Loans shall be suspended until the Lender notifies the Administrative Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist.
(b) If a Lender determines that it is unlawful to maintain any
Offshore Rate Loan, the Borrower shall, upon its receipt of notice of such fact
and demand from such Lender (with a copy to the Administrative Agent), convert
such Offshore Rate Loans of such Lender then outstanding into a Base Rate Loan
and shall pay interest accrued thereon and amounts required under Section 3.4,
either on the last day of the Interest Period thereof, if the Lender may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such Offshore
Rate Loan.
(c) If the obligation of any Lender to make or maintain
Offshore Rate Loans has been so terminated or suspended, the Borrower may elect,
by giving notice to the Lender
28
through the Administrative Agent that all Loans which would otherwise be made by
the Lender as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent under
this Section, the affected Lender shall designate a different Lending Office
with respect to its Offshore Rate Loans if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment of
the Lender, be illegal or otherwise disadvantageous to the Lender or
inconsistent with such Lender's internal policies.
SECTION 3.3 Increased Costs and Reduction of Return. (a) If
any Lender determines that, due to either (i) the introduction of or any change
(other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Offshore Rate) in or in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any Offshore Rate Loans, then the Borrower shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs; provided that the Borrower shall not be obligated to pay any
additional amounts which were incurred by such Lender more than 90 days prior to
the date of such request.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Lender (or its Lending Office) or any Person controlling the
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital required or expected to be maintained by the Lender or any Person
controlling the Lender and (taking into consideration such Lender's or such
Person's policies with respect to capital adequacy and such Lender's desired
return on capital) determines that the amount of such capital is increased or
its rate of return is decreased as a consequence of its Commitment, loans,
credits or obligations under this Agreement, then, upon demand of such Lender to
the Borrower through the Administrative Agent, the Borrower shall pay to the
Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase; provided that the
Borrower shall not be obligated to pay any additional amounts which were
incurred by such Lender more than 90 days prior to the date of such request.
SECTION 3.4 Funding Losses. Upon the request of any Lender, the Borrower shall
reimburse such Lender and hold such Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
29
(b) the failure of the Borrower to borrow, continue or convert
a Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation that includes an Offshore Rate
Loan;
(c) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section -------- 2.6;
(d) the prepayment (including pursuant to Section 2.6) or
other payment (including after acceleration thereof) of an Offshore Rate Loan on
a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.5 of any Offshore
Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Borrower to the Lenders under this Section
and under Section 3.3(a), each Offshore Rate Loan made by a Lender (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded. In the event BofA,
as Lender, incurs any such losses or expenses in connection with assignments of
its Commitments and/or Loans within 90 days of the Effective Date, the Borrower
shall reimburse BofA for such losses or expenses.
SECTION 3.5 Inability to Determine Rates. If the
Administrative Agent determines that for any reason adequate and reasonable
means do not exist for determining the Offshore Rate for any requested Interest
Period with respect to a proposed Offshore Rate Loan, or the Administrative
Agent determines (or the Required Lenders advise the Administrative Agent) that
the Offshore Rate applicable pursuant to Section 2.7(a) for any requested
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Offshore Rate
Loans, as the case may be, hereunder shall be suspended until the Administrative
Agent revokes such notice in writing. Upon receipt of such notice, the Borrower
may revoke any Notice of Borrowing or Notice of Conversion/ Continuation then
submitted by it. If the Borrower does not revoke such Notice, the Lenders shall
make, convert or continue the Loans, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower, but such Loans
shall be made, converted or continued as Base Rate Loans instead of Offshore
Rate Loans.
SECTION 3.6 Certificates of Lenders. Any Lender claiming
reimbursement or compensation under this Article III shall deliver to the
Borrower (with a copy to the Administrative Agent) a certificate setting forth
in reasonable detail the amount payable to the Lender hereunder and such
certificate shall be conclusive and binding on the Borrower in the absence of
manifest error.
30
SECTION 3.7 Substitution of Lenders. Upon the receipt by the
Borrower from any Lender (an "Affected Lender") of a claim for compensation
under Section 3.1, 3.2, 3.3 or 3.5 the Borrower may: (i) request the Affected
Lender to use its reasonable efforts to obtain a replacement bank or financial
institution satisfactory to the Borrower to acquire and assume all or a ratable
part of all of such Affected Lender's Loans and Commitment (a "Substitute
Lender"); (ii) request one or more of the other Lenders to acquire and assume
all or part of such Affected Lender's Loans and Commitment; or (iii) designate a
Substitute Lender. Any such designation of a Substitute Lender under clause (i)
or (iii) shall be subject to the prior written consent of the Administrative
Agent (which consent shall not be unreasonably withheld). SECTION 3.8 Survival.
The agreements and obligations of the Borrower in this Article III shall survive
the payment of all other Obligations.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make Loans hereunder,
the Borrower represents and warrants to each Lender that:
SECTION 4.1 Due Organization, Authorization, etc. Each of the
Borrower and each Subsidiary (a) is a Person duly organized or formed, validly
existing and in good standing under the laws of its jurisdiction of organization
or formation, (b) is duly qualified to do business and in good standing in each
jurisdiction where, because of the nature of its activities or properties, such
qualification is required except where the failure to qualify would not have a
Material Adverse Effect, which jurisdictions are set forth with respect to the
Borrower and each Subsidiary on Schedule 4.1 as revised from time to time by the
Borrower pursuant to Section 5.1(i), (c) has the requisite corporate power and
authority and the right to own and operate its properties, to lease the property
it operates under lease, and to conduct its business as now and proposed to be
conducted, and (d) has (or within three Business Days of the Effective Date will
have) obtained all material licenses, permits, consents or approvals from or by,
and has made all filings with, and given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct (including, without limitation, the consummation of the
transactions contemplated by this Agreement) as to each of the foregoing, except
where the failure to do so would not have a Material Adverse Effect. The
execution, delivery and performance by the Borrower of this Agreement and the
consummation of the transactions contemplated hereby and thereby are within its
corporate powers and have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval, if required). Each of the
Borrower and its Subsidiaries has received all other material consents and
approvals (if any shall be required) necessary for such execution, delivery and
performance, and such execution, delivery and performance do not and will not
contravene or conflict with, or create a Lien or right of termination or
acceleration under, any Requirement of Law or Contractual Obligation binding
upon the Borrower or such Subsidiaries that would reasonably be expected to have
a Material Adverse Effect. This Agreement and each of the Loan Documents to
which the Borrower is a party is (or when executed and delivered will be) the
legal, valid, and binding obligation of the Borrower enforceable against the
Borrower in accordance with its respective terms, except as enforceability may
be limited by bankruptcy,
31
insolvency or similar laws affecting the enforcement of creditor's rights
generally or by the application of equitable principles relating to
enforceability (regardless of whether considered in a proceeding in equity or at
law) including, without limitation, (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (ii) concepts
of materiality, reasonableness, good faith and fair dealing; provided that the
Borrower assumes for purposes of this Section 4.1 that this Agreement and the
other Loan Documents have been validly executed and delivered by each of the
parties thereto other than the Borrower.
SECTION 4.2 GAAP Financial Statements. With respect to any
representation and warranty which is deemed to be made after the date hereof by
the Borrower, the balance sheet and statements of operations, of shareholders'
equity and of cash flow, which as of such date shall most recently have been
furnished by or on behalf of the Borrower to each Lender for the purposes of or
in connection with this Agreement or any transaction contemplated hereby, shall
have been prepared in accordance with GAAP consistently applied (except as
disclosed therein and, in the case of interim financial statements, for the
absence of footnote disclosures), and shall present fairly the consolidated
financial condition of the corporations covered thereby as at the dates thereof
for the periods then ended, subject, in the case of quarterly financial
statements, to normal year-end audit adjustments.
SECTION 4.3 Litigation and Contingent Liabilities. Except for
claims which are covered by Insurance Policies, coverage for which has not been
denied in writing, or which relate to Primary Policies or Borrower Reinsurance
Agreements issued by the Borrower or its Insurance Subsidiaries or to which it
is a party entered into by the Borrower or its Insurance Subsidiaries in the
ordinary course of business (referred to herein as "Ordinary Course
Litigation"), no claim, litigation (including, without limitation, derivative
actions), arbitration, governmental investigation or proceeding or inquiry is
pending or, to its knowledge, threatened against the Borrower or any of its
Subsidiaries (i) which would, if adversely determined, have a Material Adverse
Effect or (ii) which seeks to prevent, enjoin or delay any of the transactions
contemplated hereby, and there is no basis known to the Borrower for any of the
foregoing. Other than any liability incident to such claims, litigation or
proceedings, the Borrower has no material Contingent Liabilities not provided
for or disclosed in the financial statements delivered pursuant to Section
5.1(a).
SECTION 4.4 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other Federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter has been filed with the IRS with respect
thereto and, to the best knowledge of the Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification.
The Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect
to any Plan.
32
(b) There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that would have a
Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any
Plan that would result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections
4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.
SECTION 4.5 Investment Company Act. Neither the Borrower nor
any of its Subsidiaries is an "investment company" or a company "controlled by
an investment company," within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not engaged in the "investment business" as
defined in Xxx Xxxxxxxxxx Xxxxxxxx Xxx 0000.
SECTION 4.6 Regulations U and X. Neither the Borrower nor any
of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock. None of the Borrower, any of its Subsidiaries, any
Affiliate of any of them or any Person acting on their behalf has taken or will
take action to cause the execution, delivery or performance of this Agreement,
the making or existence of the Loans or the use of proceeds of the Loans to
violate Regulations U or X of the FRB.
SECTION 4.7 Proceeds. The proceeds of the Term Loans will be
used to finance the initial funding of Insurance Subsidiaries of the Borrower.
The proceeds of the Revolving Loans will be used for general corporate purposes
(including capital contributions to Subsidiaries).
SECTION 4.8 Accuracy of Information. All factual written
information furnished heretofore or contemporaneously herewith by the Borrower
or any of its Subsidiaries to the Administrative Agent or the Lenders for
purposes of this Agreement, as supplemented to the date hereof, is and all other
such factual written information hereafter furnished by the Borrower or any of
its Subsidiaries to the Administrative Agent or the Lenders will be, true and
accurate in every material respect on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading.
SECTION 4.9 Subsidiaries. Schedule 4.9 as updated from time to
time pursuant to Section 5.1(i) contains a complete list of the Borrower's
Subsidiaries and designates each such Subsidiary as an Insurance Subsidiary or a
Non-Insurance Subsidiary.
33
SECTION 4.10 Insurance Licenses. To the best of the Borrower's
knowledge, no License is the subject of a proceeding for suspension or
revocation or any similar proceedings, there is no sustainable basis for such a
suspension or revocation, and no such suspension or revocation is threatened by
the Department which would have a Material Adverse Effect.
SECTION 4.11 Taxes. The Borrower and each of its Subsidiaries
has filed all tax returns that are required to be filed by it, and has paid or
provided adequate reserves for the payment of all material taxes that are due
and payable including, without limitation, all payroll taxes and federal and
state withholding taxes, and all assessments payable by it that have become due,
other than (a) those that are not yet delinquent or that are being contested in
good faith by appropriate proceedings and with respect to which reserves have
been established, and are being maintained, in accordance with GAAP or (b) those
which the failure to file or pay would not have a Material Adverse Effect. On
the Effective Date there is no ongoing audit or, to the Borrower's knowledge,
other governmental investigation of the tax liability of the Borrower or any of
its Subsidiaries and there is no unresolved claim by a taxing authority
concerning the Borrower's or any such Subsidiary's tax liability, for any period
for which returns have been filed or were due. As used in this Section 4.11, the
term "taxes" includes all taxes of any nature whatsoever and however
denominated, including, without limitation, excise, import, governmental fees,
duties and all other charges, as well as additions to tax, penalties and
interest thereon, imposed by any government or instrumentality, whether federal,
state, local, foreign or other.
SECTION 4.12 Compliance with Laws. Neither the Borrower nor
any of its Subsidiaries is in violation of any law, ordinance, rule, regulation,
order, policy, guideline or other requirement of any Governmental Authority, if
the effect of such violation could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.13 Financial Condition. Since November 19, 2001 or
the date of the most recent annual audited financial statements delivered
pursuant to Section 5.1(a), as applicable, there has been no Material Adverse
Effect.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Loans and all other Obligations are paid in full, and until the
Revolving Commitment Termination Date, the Borrower agrees that, unless at any
time the Required Lenders shall otherwise expressly consent in writing, it will:
SECTION 5.1 Reports, Certificates and Other Information.
Furnish or cause to be furnished to the Administrative Agent and the Lenders:
(a) GAAP Financial Statements:
(i) Within 45 days after the close of each of the first three
Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the
unaudited consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries, as of the close of such quarter and
34
the related consolidated and consolidating statements of income and
cash flows for that portion of the Fiscal Year ending as of the close
of such Fiscal Quarter, all prepared in accordance with GAAP (subject
to normal year-end adjustments and except that footnote and schedule
disclosure may be abbreviated) and accompanied by the certification of
the chief executive officer, chief financial officer, treasurer or
controller of the Borrower that all such financial statements are
complete and correct and present fairly in all material respects
accordance with GAAP (subject to normal year-end adjustments and except
that footnote and schedule disclosure may be abbreviated) the
consolidated results of operations and cash flows of the Borrower and
its consolidated Subsidiaries as at the end of such Fiscal Quarter and
for the period then ended.
(ii) Within 90 days after the close of each Fiscal Year, (A) a
copy of the annual audited consolidated financial statements of the
Borrower and its Subsidiaries, consisting of consolidated balance
sheets and consolidated statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the
consolidated figures for the previous Fiscal Year, which financial
statements shall be prepared in accordance with GAAP, certified without
material qualification by the independent certified public accountants
regularly retained by the Borrower, or any other firm of independent
certified public accountants of recognized national standing selected
by the Borrower and reasonably acceptable to the Administrative Agent
that all such financial statements are complete and correct and present
fairly in all material respects in accordance with GAAP the
consolidated financial position and the consolidated results of
operations and cash flows of the Borrower and its Subsidiaries as at
the end of such Fiscal Year and for the period then ended and (B) a
copy of the consolidating balance sheets and consolidating statements
of income and retained earnings and cash flows for the Borrower and its
Subsidiaries as of the end of such Fiscal Year, accompanied by the
certificate of the chief executive officer, chief financial officer,
treasurer or controller of the Borrower that all such consolidating
financial statements are complete and correct and present fairly in all
material respects the results of operations and cash flows of the
Borrower as at the end of such Fiscal Year and for the period then
ended.
(b) SAP Financial Statements. Within (i) 5 days after the date
filed with the Department for each of its Fiscal Years, but in any event within
125 days after the end of each Fiscal Year of each Insurance Subsidiary a copy
of the Annual Statement of each Insurance Subsidiary for such Fiscal Year and
(ii) 5 days after the date filed with any Department for each of its Fiscal
Quarters, but in any event within 60 days after the end of each Fiscal Quarter
of each Insurance Subsidiary a copy of the Quarterly Statement of each Insurance
Subsidiary for such Fiscal Quarter, if any, required by such Department to be
filed, each of which statements delivered pursuant to clause (i) or (ii) to be
prepared in accordance with SAP and accompanied by the certification of the
chief financial officer or chief executive officer of each Insurance Subsidiary
that such financial statement is complete and correct and presents fairly in
accordance with SAP the financial position of such Insurance Subsidiary for the
period then ended.
(c) Notice of Default, etc. As soon as practicable after an
Executive Officer of the Borrower knows of the existence of any Default, or any
development or other information which would have a Material Adverse Effect,
telephonic or telegraphic notice specifying the
35
nature of such Default or development or information, including the anticipated
effect thereof, which notice shall be promptly confirmed in writing within three
(3) Business Days.
(d) Other Information. The following certificates and other
information related to the Borrower:
(i) Promptly after completion of each such item but in no
event later than the 90th day after the close of each Fiscal Year of
the Borrower, a copy of the Borrower's projections for the next Fiscal
Year.
(ii) Within five (5) Business Days of receipt, a copy of any
final financial examination reports by a Governmental Authority with
respect to the Insurance Subsidiaries relating to the insurance
business of the Insurance Subsidiaries (when, and if, prepared),
provided the Borrower shall only be required to deliver any interim
report hereunder at such time as Borrower receives notice from the
Governmental Authority that no final report will be forthcoming or a
final report has not been delivered within 180 days of issuance of such
interim report.
(iii) Copies of all filings (other than nonmaterial tax and
insurance rate and other ministerial regulatory filings) with
Governmental Authorities by the Borrower or any Subsidiary not later
than five (5) Business Days after such filings are made, including,
without limitation, filings which seek approval of Governmental
Authorities with respect to transactions between the Borrower or such
Subsidiary and its Affiliates.
(iv) Within five (5) Business Days of such notice, notice of
proposed or actual suspension, termination or revocation of any
material License of the Insurance Subsidiaries by any Governmental
Authority or of receipt of notice from any Governmental Authority
notifying the Borrower of a hearing relating to such a suspension,
termination or revocation, including any request by a Governmental
Authority which commits the Borrower or any Insurance Subsidiary to
take, or refrain from taking, any action or which otherwise materially
and adversely affects the authority of the Borrower or any Insurance
Subsidiary to conduct its business.
(v) Within five (5) Business Days of such notice, notice of
any pending or threatened investigation or regulatory proceeding (other
than routine periodic investigations or reviews) by any Governmental
Authority concerning the business, practices or operations of the
Borrower or any Insurance Subsidiary.
(vi) Simultaneously with delivery of the financial statements
provided pursuant to Section 5.1(a), a list of all investments
(including, without limitation, Permitted Investments) of the Borrower
and its Insurance Subsidiaries as of the end of such Fiscal Quarter.
(vii) Promptly, after an Executive Officer of the Borrower has
knowledge of actual material changes in the Insurance Code governing
the investment or dividend practices of any Insurance Subsidiary.
36
(viii) Promptly, such additional financial and other
information as the Administrative Agent may from time to time
reasonably request concerning the Borrower or any Subsidiary.
(e) Compliance Certificates. Concurrently with the delivery to
the Administrative Agent of the GAAP financial statements under Sections
5.1(a)(i) and 5.1(a)(ii), for each Fiscal Quarter and Fiscal Year of the
Borrower, a duly completed Compliance Certificate, signed by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower,
containing, among other things, a computation of, and showing compliance with,
each of the applicable financial ratios and restrictions contained in Sections
6.1, 6.2, 6.3 and 6.10, and to the effect that, to the best of such officer's
knowledge, as of such date no Default has occurred and is continuing.
(f) Reports to SEC and to Shareholders. Promptly upon the
filing or making thereof (i) copies of each filing and report made by the
Borrower or any of its Subsidiaries with or to any securities exchange or the
Securities and Exchange Commission and (ii) if the Borrower has issued stock in
a public offering, copies of each communication from the Borrower to
shareholders generally.
(g) Insurance Reports. Within five (5) Business Days of
receipt of such notice by the Borrower or its Subsidiaries, written notice of
any cancellation of any material Insurance Policy carried by the Borrower or any
of its Subsidiaries.
(h) Formation of Subsidiaries. Promptly upon formation of any
Subsidiary, written notice of the name, purpose and capitalization of such
Subsidiary.
(i) Updated Schedules. From time to time, and in any event
concurrently with delivery of the financial statements under Section 5.1(a)(i)
and (ii), revised Schedules 4.1 and 4.9, if applicable, showing changes from the
Schedules previously delivered.
SECTION 5.2 Corporate Existence; Foreign Qualification. Do and
cause to be done at all times all things necessary to (a) maintain and preserve
the existence of each Insurance Subsidiary of the Borrower (except that inactive
Subsidiaries of the Borrower may be merged out of existence or dissolved and
Subsidiaries may be dissolved provided that the aggregate Net Worth of such
dissolved Subsidiaries at the time of dissolution since the Effective Date does
not exceed $50,000,000) and (b) be, and ensure that each Subsidiary of the
Borrower is, duly qualified to do business and be in good standing in each
jurisdiction where the nature of its business makes such qualification necessary
unless the failure to be so qualified would not have a Material Adverse Effect.
SECTION 5.3 Books, Records and Inspections. (a) Maintain, and
cause each of its Subsidiaries to maintain, materially complete and accurate
books and records in accordance with GAAP and in addition, with respect to each
Insurance Subsidiary, SAP, (b) permit, and cause each of its Subsidiaries to
permit, access at reasonable times by the Administrative Agent to its books and
records, (c) permit, and cause each of its Subsidiaries to permit, the
Administrative Agent or its designated representative to inspect at reasonable
times its properties and operations, and (d) permit, and cause each of its
Subsidiaries to permit, the Administrative
37
Agent to discuss, at reasonable times, its business, operations and financial
condition with its officers and its independent accountants.
SECTION 5.4 Insurance. Maintain, and cause each of its
Subsidiaries to maintain, Insurance Policies to such extent and against such
hazards and liabilities as is required by law or customarily maintained by
prudent companies similarly situated.
SECTION 5.5 Taxes and Liabilities. Pay, and cause each of
its Subsidiaries to pay, when due all material taxes, assessments and other
material liabilities except as contested in good faith and by appropriate
proceedings with respect to which reserves have been established, and are being
maintained, in accordance with GAAP.
SECTION 5.6 Compliance with Laws. Comply, and cause each of
its Subsidiaries to comply, (a) with all Requirements of Law related to its
businesses (including, without limitation, the establishment of all insurance
reserves required to be established under SAP and applicable laws restricting
the investments of the Borrower), and (b) with all Contractual Obligations
binding upon such entity, except where, in each case, failure to so comply would
not in the aggregate have a Material Adverse Effect.
SECTION 5.7 Maintenance of Permits. Once received, maintain,
and cause each of its Subsidiaries to maintain, all permits, licenses and
consents as may be required for the conduct of its business by any Governmental
Authority except where failure to maintain the same would not reasonably be
expected to have a Material Adverse Effect.
SECTION 5.8 Conduct of Business. Engage, and cause each
Subsidiary to engage, primarily in the same business described in the Bank
Offering Memorandum.
SECTION 5.9 Investments. Cause the Invested Assets of the
Borrower and its Subsidiaries to be invested at all time so as to be in full
compliance with each of the following guidelines: (a) all Invested Assets of
each Insurance Subsidiary shall be in compliance with the applicable Insurance
Code and (b) at least 80% of all Invested Assets of the Borrower and its
Subsidiaries shall constitute Permitted Investments. If at any time after a
Permitted Investment is made, it ceases to meet a rating requirement, it shall
remain permitted hereby until the date which is 60 days after the date on which
such rating requirement is not met.
SECTION 5.10 Compliance with ERISA. Do, and cause each of its
ERISA Affiliates to do, each of the following: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other Federal or state law; (b) cause each Plan which is qualified
under Section 401(a) of the Code to maintain such qualification; and (c) make
all required contributions to any Plan subject to Section 412 of the Code.
38
ARTICLE VI
NEGATIVE COVENANTS
Until the Loans and all other Obligations are paid in full and
until the Revolving Commitment Termination Date, the Borrower agrees that,
unless at any time the Required Lenders shall otherwise expressly consent in
writing, it will:
SECTION 6.1 Leverage Ratio. Not permit the Leverage Ratio to
be more than 30%.
SECTION 6.2 Tangible Net Worth. Not permit the Tangible Net
Worth of the Borrower to be less than the sum of (a) $475,000,000 plus (b) 50%
of positive quarterly Consolidated Net Income (with no deduction for net losses)
plus (c) 50% of Net Equity Proceeds minus (d) Additional Restricted Payments.
SECTION 6.3 Statutory Net Written Premiums to Consolidated
Insurance Subsidiary Net Worth. Commencing March 31, 2002, not permit the ratio
of (a) the aggregate Statutory Net Written Premiums for all Insurance
Subsidiaries for the four Fiscal Quarters then ended to (b) the Consolidated
Insurance Subsidiary Net Worth of all Insurance Subsidiaries on the last day of
the four Fiscal Quarters then ended to be greater than 1.5:1.0 as at the end of
any Fiscal Quarter; provided that for purposes of calculating such ratio in
Fiscal Year 2002, the ratio shall be based on the number of Fiscal Quarters then
ended in Fiscal Year 2002. For example, for the Fiscal Quarter ending June 30,
2002, the ratio shall be based on the two Fiscal Quarters then ended.
SECTION 6.4 Debt. Not, and not permit any Subsidiary to,
incur any Debt other than (a) Debt under the Loan Documents; (b) Purchase Money
Debt provided the aggregate principal amount outstanding at any time does not
exceed $1,000,000; (c) Capital Lease Obligations provided such Leases do not
cover any property other than property acquired in connection therewith and the
aggregate principal amount of all such Debt outstanding at any time does not
exceed $1,000,000; (d) Hedging Obligations entered into in the ordinary course
of business in order to hedge currency, or interest rate risks, and not for
purposes of speculation; (e) Debt for letters of credit which have been issued
to reinsurance cedents in the ordinary course of business; (f) Debt owing by a
Subsidiary to the Borrower or by a Subsidiary to another Subsidiary; (g) Debt
not included in paragraphs (a) through (f) which does not exceed at any time, in
the aggregate, $10,000,000; and (h) refinancings of any of Debt permitted in
clauses (b) through (g) provided that the aggregate principal amount of Debt
being refinanced is not increased.
SECTION 6.5 Mergers, Consolidations and Sales. (a) Not permit
any of its Insurance Subsidiaries to merge or consolidate, (b) not, and not
permit any of its Insurance Subsidiaries to, purchase or otherwise acquire all
or substantially all of the assets or stock of any class of, or any partnership
or joint venture interest in, any other Person other than (i) a newly formed
Subsidiary, (ii) the acquisition of shares of a Subsidiary held by minority
shareholders provided the aggregate purchase price of all such acquisitions
since the Effective Date does not exceed $50,000,000, and (iii) the acquisition
of a property or casualty insurance company
39
or entity providing related services provided that at the time of such
acquisition the aggregate purchase price (after giving effect to the proposed
acquisition) of all acquisitions pursuant to this clause (iii) does not exceed
20% of Consolidated Net Worth, or (c) not, and not permit any of its Insurance
Subsidiaries to, sell, transfer, convey or lease all or any substantial part of
its assets or sell or assign with or without recourse any receivables, other
than any sale, transfer, conveyance or lease in the ordinary course of business,
except in the cases of clauses (a), (b) or (c)for (x) any sale, transfer, lease
or disposition of an asset by or to a Subsidiary, (y) any disposition in
connection with the dissolution of a Subsidiary in accordance with Section 5.2,
and (z) any such merger or consolidation, sale, transfer, conveyance, lease or
assignment of any wholly-owned Subsidiary into, with or to the Borrower or any
other wholly-owned Subsidiary, provided in each case no Default or Event of
Default has occurred and is continuing or would result therefrom.
SECTION 6.6 Other Agreements. Not, and not permit any of its
Subsidiaries to, enter into any agreement containing any provision which would
be violated or breached by the performance of obligations hereunder or under any
instrument or document delivered or to be delivered by it hereunder or in
connection herewith.
SECTION 6.7 Transactions with Affiliates. Not, and not
permit any Subsidiary to, enter into, or cause, suffer or permit to exist,
directly or indirectly, any arrangement, transaction or contract with any of its
Affiliates unless such arrangement, transaction or contract is on an
arm's-length basis; provided that transactions between the Borrower and any
wholly-owned Subsidiary of the Borrower or between any wholly-owned Subsidiaries
of the Borrower shall be excluded from the restrictions set forth in this
Section 6.7.
SECTION 6.8 Liens. Not, and not permit any of its
Subsidiaries to, create or permit to exist any Lien with respect to any assets
now or hereafter existing or acquired, except the following: (i) Liens for
current taxes not delinquent or for taxes being contested in good faith and by
appropriate proceedings and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP; (ii) easements,
party wall agreements, rights of way, restrictions, and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of leases or subleases granted to others, statutory liens of
landlords, zoning restrictions, licenses, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Borrower and its Subsidiaries taken as a
whole; (iii) Liens in connection with Debt permitted under Sections 6.4(b), (c)
and (g); (iv) Liens to secure Debt of a Subsidiary to the Borrower or Debt of a
wholly-owned Subsidiary to another wholly-owned Subsidiary; (v) Liens incurred
in the ordinary course of business in connection with workers' compensation,
unemployment insurance or other forms of governmental insurance or benefits and
Liens pursuant to letters of credit or other security arrangements in connection
with such insurance or benefits; (vi) attachments, judgments and other similar
Liens for sums not exceeding $5,000,000 (excluding any portion thereof which is
covered by insurance so long as the insurer is reasonably likely to be able to
pay and has accepted a tender of defense and indemnification without reservation
of rights); (vii) attachments, judgments and other similar Liens for sums of
$5,000,000 or more (excluding any portion thereof which is covered by insurance
so long as the insurer is reasonably likely to be able to pay and has accepted a
tender of defense and indemnification without reservation of rights) provided
the execution or other enforcement of such Liens is effectively stayed and
claims secured thereby are being actively contested in good
40
faith and by appropriate proceedings and have been bonded off; (viii)
mechanics', workers', materialmen's and other like Liens arising in the ordinary
course of business or imposed by law in respect of obligations which are not
delinquent or which are being contested in good faith and by appropriate
proceedings and with respect to which adequate reserves have been established,
and are being maintained, in accordance with GAAP, (ix) liens pursuant to trust,
letter of credit or other security arrangements in connection with Primary
Policies or Borrower Reinsurance Agreements and (x) any continuation,
refinancing or replacement of the foregoing; provided, however, that, no Lien
shall be permitted to exist on the shares of stock of any Subsidiary; and
provided, further that after giving effect to all Liens, the Fair Market Value
of the Unencumbered Assets shall be $400,000,000 or greater.
SECTION 6.9 Restrictions On Negative Pledge Agreements. Not,
and not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any agreement, other than this Agreement, which places any restrictions
upon the right of the Borrower or any of its Subsidiaries to pledge any of its
properties now owned or hereafter acquired other than (i) restrictions contained
in documents relating to the Liens permitted in Section 6.8(iii) and (ix)
(provided such restrictions do not extend to assets other than the collateral
for such Debt) and (ii) restrictions imposed by federal or state laws upon the
right of the Borrower or any of its Subsidiaries to pledge securities owned by
it.
SECTION 6.10 Equity Distributions, Etc.. Not, and not permit
its Subsidiaries to declare, pay or set aside funds for any Restricted Payments.
Notwithstanding the foregoing, provided no Default or Event of Default has
occurred and is continuing on the date of or would result from such declaration
or payment, commencing on and after April 1, 2003, the Borrower may make
Restricted Payments as follows:
(a) Restricted Payments equal to 50% of the Consolidated Net
Income for any quarter (each a "Permitted Restricted Payment"); and
(b) Restricted Payments in excess of Permitted Restricted
Payments (each an "Additional Restricted Payment") provided (i) not less than
five Business Days prior to making such Additional Restricted Payment the
Borrower shall have provided the Administrative Agent and the Lenders, a duly
completed Compliance Certificate, signed by the chief financial officer or
treasurer of the Borrower, containing the amount of such Additional Restricted
Payment, the amount of Debt Capital Refunding to be made in connection therewith
and a computation of each of the applicable financial ratios and restrictions
contained in Sections 6.1, 6.2 and 6.3 after giving effect to such Additional
Restricted Payment and Debt Capital Refunding, and, to the effect that, to the
best of such officer's knowledge, as of such date no Default or Event of Default
has occurred and is continuing or will result from such Additional Restricted
Payment; and (ii) simultaneously with each Additional Restricted Payment, the
Borrower shall have made a Debt Capital Refunding in accordance with Section
2.6(b).
SECTION 6.11 Capital Expenditures. Not, and not permit any
Subsidiary to, make any expenditures in respect of the purchase or other
acquisition of any fixed or capital asset except for capital expenditures in the
ordinary course of business not exceeding $10,000,000 in the aggregate for any
Fiscal Year.
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SECTION 6.12 Regulations U and X. Not, and not permit any of
its Subsidiaries to, hold margin stock (as such term is defined in Regulation U
of the FRB) having a value in excess of 25% of the value of the assets of the
Borrower and its Subsidiaries taken as a whole after taking into account the
application of the proceeds of the Loans.
ARTICLE VII
EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 7.1 Events of Default. Each of the following shall
constitute an Event of Default under this Agreement:
(a) Non-Payment of Loan. Default in the payment when due of any
principal on the Loans.
(b) Non-Payment of Interest, Fees, etc. Default, and continuance
thereof for three (3) Business Days, in the payment when due of interest on the
Loans, fees or of any other amount payable hereunder or under the Loan
Documents.
(c) Non-Payment of Other Debt. (i) Default in the payment when
due (subject to any applicable grace period), whether by acceleration or
otherwise, of any other Debt of the Borrower or any of its Subsidiaries if the
aggregate amount of Debt of the Borrower and/or any of its Subsidiaries which is
accelerated or due and payable, or which (subject to any applicable grace
period) may be accelerated or otherwise become due and payable, by reason of
such default or defaults is $5,000,000 or more, or (ii) default in the
performance or observance of any obligation or condition with respect to any
such other Debt of, or guaranteed by, the Borrower and/or any of its
Subsidiaries if the effect of such default or defaults is to accelerate the
maturity (subject to any applicable grace period) of any such Debt of $5,000,000
or more in the aggregate or to permit the holder or holders of such Debt of
$5,000,000 or more in the aggregate, or any trustee or agent for such holders,
to cause such Debt to become due and payable prior to its expressed maturity.
(d) Other Material Obligations. Except for obligations covered
under other provisions of this Article VII, default in the payment when due, or
in the performance or observance of, any material obligation of, or material
condition agreed to by, the Borrower or any of its Subsidiaries with respect to
any material purchase or lease obligation of $5,000,000 or more (unless the
existence of any such default is being contested by the Borrower in good faith
and by appropriate proceedings and the Borrower has established, and is
maintaining, adequate reserves therefor in accordance with GAAP) which default
continues for a period of 60 days.
(e) Bankruptcy, Insolvency, etc. (i) The Borrower or any
Insurance Subsidiary becomes insolvent or generally fails to pay (subject to
applicable grace periods), or admits in writing its inability to pay, debts as
they become due; (ii) there shall be commenced by or against the Borrower or any
Insurance Subsidiary any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, supervision, conservatorship, liquidation, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or
42
insolvent, or seeking reorganization, rehabilitation, conservation, supervision,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, obligations or liabilities, or (B)
seeking appointment of a receiver, trustee, custodian, rehabilitation,
conservator, supervisor, liquidator or other similar official for it or for all
or any substantial part of its assets, in each case which (1) results in the
entry of an order for relief or any such adjudication or appointment or (2) if
filed against such Person, remains undismissed, undischarged or unstayed for a
period of 60 days; or (iii) there shall be commenced against any of such Person
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) any of such
Persons shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause(ii) or
(iii) above; or (v) any Governmental Authority shall issue any order of
conservation, supervision or any other order of like effect relating to any of
such Persons.
(f) Non-compliance With Sections 6.1 and 6.2. The Borrower shall
fail to comply with the covenant set forth in Section 6.1 or Section 6.2 and
continuance of such failure for 30 days unless a Cure Contribution is made
during such 30 days.
(g) Non-compliance With Other Financial Conditions. Failure by
the Borrower to comply with its covenants set forth in Section 5.2, 5.7, 5.8 or
6.3, 6.4, 6.5, 6.8, 6.10, 6.11, and 6.12.
(h) Non-compliance With Other Provisions. Failure by the Borrower
to comply with or to perform any provision of this Agreement or the other Loan
Documents (and not constituting an Event of Default under any of the other
provisions of this Article VII) and continuance of such failure for 30 days
after notice thereof from the Administrative Agent to the Borrower.
(i) Warranties and Representations. Any warranty or
representation made by the Borrower or any Subsidiary in any of the Loan
Documents is inaccurate or incorrect in any material respect as of the date such
warranty or representation is made; or any certificate, document or financial
statement furnished by the Borrower or any Subsidiary in connection with the
Loan Documents to the Administrative Agent or the Lenders is incorrect in any
material respect on the date as of which the facts therein set forth are stated
or certified.
(j) ERISA. (i) An ERISA Event occurs with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
43
(k) Loan Documents. Any action shall be taken by or on behalf of
the Borrower or to contest the validity, binding nature or enforceability of any
of the Loan Documents.
(l) Change in Control. A Change in Control occurs.
(m) Judgments. A final judgment or judgments which exceed an
aggregate of $5,000,000 (excluding any portion thereof which is covered by
insurance so long as the insurer is reasonably likely to be able to pay and has
not disputed coverage) shall be rendered against the Borrower or any Subsidiary
and shall not have been discharged or vacated or had execution thereof stayed
pending appeal within 60 days after entry or filing of such judgment(s).
(n) Change in Law. Any change is made in the Insurance Code which
affects the dividend practices of any Insurance Subsidiary and which would have
a Material Adverse Effect and such circumstances shall continue for 180 days.
(o) Confirmation of Capital Requirement. Within three Business
Days of the Effective Date, the Borrower fails to deliver evidence satisfactory
to the Administrative Agent that Montpelier Reinsurance Ltd. has delivered to
the Supervisor of Insurance the confirmation required under the letter dated
November 22, 2001.
(p) Redeemable Stock. The Borrower authorizes or issues any
capital stock which provides for redemption prior to the Final Maturity Date.
(q) Corporate Existence. The Borrower shall merge or consolidate
with any Person other than as permitted in Section 6.5 or the Borrower shall
fail to preserve in full force and effect its corporate existence.
SECTION 7.2 Effect of Event of Default. If any Event of
Default described in Section 7.1(e) shall occur, the Loans and all other
Obligations shall become immediately due and payable, all without notice of any
kind; and, in the case of any other Event of Default, the Administrative Agent
upon the written request of the Required Lenders shall terminate the Commitments
hereunder and declare all or any portion of the Loans and all other Obligations
to be due and payable, whereupon the Commitments shall terminate and all or such
portion of the Loans and all other Obligations shall become immediately due and
payable, all without further notice of any kind. The Administrative Agent shall
promptly advise the Borrower of any such declaration but failure to do so shall
not impair the effect of such declaration. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section 7.1(a) may not
be waived except by consent of all of the Lenders and acknowledged by the
Administrative Agent in writing.
ARTICLE VIII
CONDITIONS
SECTION 8.1 Conditions to Occurrence of the Effective Date.
The occurrence of the Effective Date shall be subject to receipt by the
Administrative Agent of all of the following, each duly executed and dated the
Effective Date (or such earlier date as shall be
44
satisfactory to the Administrative Agent), each in form and substance
satisfactory to the Administrative Agent:
(a) This Agreement and Certain Related Documents. This Agreement
and such other Loan Documents as are required to be delivered by the terms of
this Agreement.
(b) Organization Documents. Certified copies of the Organization
Documents of the Borrower and of resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery and performance, respectively, of
those documents and matters required of it with respect to the Loan Documents to
which it is a party.
(c) Incumbency and Signatures. A certificate of an Authorized
Officer of the Borrower certifying the names of the individual or individuals
authorized to sign the Loan Documents to which such Person is a party, together
with a sample of the true signature of each such individual. (The Lenders may
conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein.)
(d) Opinions of Counsel. The opinion of (i) LeBoeuf, Lamb, Xxxxxx
& XxxXxx, L.L.P., New York counsel to the Borrower and (ii) Xxxxxxx, Xxxx &
Xxxxxxx, Bermuda counsel to the Borrower, in each case addressed to the
Administrative Agent and the Lenders in form and substance satisfactory to the
Administrative Agent and its counsel.
(e) Material Adverse Change Certificate. An officer's
certificate, signed by an Authorized Officer of the Borrower, certifying that to
such officer's best knowledge, since November 19, 2001, no event has occurred
which individually or in the aggregate would reasonably be expected to have a
Material Adverse Effect.
(f) Montpelier Reinsurance Ltd. Montpelier Reinsurance Ltd. shall
have been formed.
SECTION 8.2 Conditions to Initial Borrowing. The occurrence
of the initial Borrowing hereunder shall be subject to receipt by the
Administrative Agent of all of the following, each duly executed and dated such
Borrowing Date (or such earlier date as shall be satisfactory to the
Administrative Agent), each in form and substance satisfactory to the
Administrative Agent:
(a) Effective Date. The Effective Date shall have occurred.
(b) Outstanding Debt. After giving effect to the Borrowing, the
Borrower shall have no more than $150,000,000 of Debt outstanding.
(c) Fees. The fees referred to in Section 2.8 which are due and
payable on or prior to the Effective Date shall have been paid to the
Administrative Agent where applicable for the benefit of the Lenders.
(d) Equity Closing. The private equity offering shall have been
completed and after giving effect thereto the Borrower shall have a Tangible Net
Worth of at least $775,000,000.
45
SECTION 8.3 Conditions to All Borrowings. The obligation of
the Lenders to make all Loans (including the initial Loans) shall be subject to
the prior or concurrent satisfaction (in form and substance satisfactory to the
Administrative Agent) of each of the conditions precedent set forth below:
(a) No Default. No Default (excluding a Default under Section
7.1(f) but including an Event of Default under Section 7.1(f)) or Event of
Default shall have occurred and be continuing or will result from the making of
the Loans.
(b) Warranties and Representations. All warranties and
representations contained in Article IV of this Agreement shall be true and
correct in all material respects as of the date of any Loan, with the same
effect as though made on the date of and concurrently with the making of such
Loan (except where such representation speaks as of specified date).
(c) Borrowing Request. The Administrative Agent shall have
received a Notice of Borrowing.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1 Appointment and Authorization. Each Lender
hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
SECTION 9.2 Delegation of Duties. The Administrative Agent
may execute any of its duties under this Agreement or any other Loan Document by
or through agents, employees 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 agent or attorney-in-fact that it selects with reasonable care.
SECTION 9.3 Liability of Administrative Agent. None of the
Agent-Related Persons shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any of
the Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other
46
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
SECTION 9.4 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement 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 counsel to the Borrower), 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 Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders 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 Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
SECTION 9.5 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, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Administrative Agent will notify the Lenders of its
receipt of any such notice. The Administrative Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required
Lenders in accordance with Article VII; provided, however, that unless and until
the Administrative Agent has received any such request, 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 or in the best interest of the Lenders.
SECTION 9.6 Credit Decision. Each Lender acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it,
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition
47
and creditworthiness of the Borrower and its Subsidiaries, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the
Borrower hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person 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 Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower which may come
into the possession of any of the Agent-Related Persons.
SECTION 9.7 Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Lender shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of the
Administrative Agent.
SECTION 9.8 Administrative Agent in Individual Capacity.
BofA and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and its Subsidiaries and Affiliates as though BofA
were not the Administrative Agent hereunder and without notice to or consent of
the Lenders. The Lenders acknowledge that, pursuant to such activities, BofA or
its Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Subsidiary) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, BofA shall have the same rights and powers
under this Agreement as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and "Lenders" include
BofA in its individual capacity.
48
SECTION 9.9 Successor Administrative Agent. The
Administrative Agent may, and at the request of the Required Lenders shall,
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders which successor
agent shall be approved by the Borrower. If no successor agent is appointed
prior to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and the
term "Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments and Waivers. No amendment or waiver
of any provision of this Agreement or any other Loan Document, and no consent
with respect to any departure by the Borrower therefrom, shall be effective
unless the same shall be in writing and signed by the Required Lenders (or by
the Administrative Agent at the written request of the Required Lenders) and the
Borrower and acknowledged by the Administrative Agent, and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by the Lenders expressly designated
with respect thereto and the Borrower and acknowledged by the Administrative
Agent, do any of the following:
(a) increase the Commitments (or reinstate the Commitments
terminated pursuant to Section 7.2) without the consent of all Lenders;
(b) extend the date for payment of any principal of or interest
on the Revolving Loans or any fees payable with respect thereto or reduce the
principal amount of any Revolving Loans, the rate of interest thereon or any
fees payable hereunder with respect to the Revolving Loan or the Revolving Loan
Commitments without the consent of all the Revolving Lenders;
(c) extend the date for payment for any principal of or interest
on the Term Loans or reduce the principal amount of any Term Loans, the rate of
interest thereon or any fees payable hereunder with respect to the Term Loans or
Term Loan Commitments without the consent of all the Term Lenders;
49
(d) change the percentage of the Commitments or the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any of
them to take action hereunder without the consent of all the Revolving Lenders
and/or Term Lenders, as applicable;
(e) amend this Section 10.1, or Section 2.12, the definition of
"Required Lenders" or any provision herein providing for consent or other action
by all Lenders without the consent of all Lenders;
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the requisite
Lenders affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document.
SECTION 10.2 Notices. (a) All notices, requests and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Borrower by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 10.2, and
(ii) except in the case of Notices of Borrowing and Notices of
Conversions/Continuation, shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 10.2; or, as directed to the Borrower
or the Administrative Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as directed to any
other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or, if delivered, upon delivery, except that notices
pursuant to Article II or IX shall not be effective until actually received by
the Administrative Agent.
(c) Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent and the
Lenders shall be entitled to rely on the authority of any Person purporting to
be a Person authorized by the Borrower to give such notice and the
Administrative Agent and the Lenders shall not have any liability to the
Borrower or other Person on account of any action taken or not taken by the
Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans shall not be
affected in any way or to any extent by any failure by the Administrative Agent
and the Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent and the Lenders of a
confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.
SECTION 10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial
50
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
SECTION 10.4 Costs and Expenses. The Borrower shall:
(a) Whether or not the transactions contemplated hereby are
consummated, pay or reimburse Administrative Agent and the Arranger (for the
Arranger's expenses through February 28, 2002) within ten Business Days after
demand for all reasonable costs and expenses incurred by the Administrative
Agent and the Arranger in connection with the development, syndication,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
the Administrative Agent and the Arranger with respect thereto; and
(b) pay or reimburse the Administrative Agent and each Lender
within ten Business Days after demand for all reasonable costs and expenses
(including Attorney Costs) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or any other Loan Document during the existence of an Event of Default
or after acceleration of the Loans (including in connection with any "workout"
or restructuring regarding the Loans, and including any bankruptcy or other
insolvency proceeding or appellate proceeding).
SECTION 10.5 Indemnity.
(a) Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless the Agent-Related
Persons, and each Lender and each of its respective officers, directors,
employees, advisors, agents and attorneys-in-fact (each, an "Indemnified
Person") from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) imposed on, incurred by or asserted against any such
Person in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any bankruptcy or other insolvency proceeding or appellate
proceeding) related to or arising out of this Agreement or the Loans or the use
of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting solely from
the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
(b) No Indemnified Person shall be liable for any damages arising
from the use by others of information or other materials obtained through
internet, Intralinks or other similar information transmission systems in
connection with this Agreement or the Loans or Commitments hereunder unless such
damages are the result of the gross negligence or willful
51
misconduct of such Indemnified Person. An Indemnified Person shall promptly
notify the Borrower in writing as to any action, claim, suit, proceeding or
investigation for which indemnity may be sought, but the omission so to notify
the Borrower will not relieve the Borrower from any liability which it may have
to any Indemnified Person hereunder to the extent that the Borrower is not
materially prejudiced as a result of such failure. After such notice to the
Borrower, the Borrower shall be entitled to participate in, and to the extent
that it shall elect by written notice delivered to such Indemnified Person
promptly after receiving the aforesaid notice of such Indemnified Person, to
assume the defense thereof with counsel reasonably satisfactory to such
Indemnified Person to represent such Indemnified Person in such action, claim,
suit, proceeding or investigation and shall pay as incurred the reasonable fees
and expenses of such counsel related to such action, claim, suit, proceeding or
investigation. In any action, claim, suit, proceeding or investigation, any
Indemnified Person shall have the right to retain its own separate counsel at
such Indemnified Person's own expense and not subject to reimbursement by the
Borrower; provided, however, that the Borrower shall pay as incurred the fees
and expenses of such counsel incurred in connection with investigating,
preparing, defending, paying, settling or compromising any action, claim, suit,
proceeding or investigation if (i) the parties to such action, claim, suit,
proceeding or investigation include both the Indemnified Person and the Borrower
and there may be legal defenses available to such Indemnified Person which are
different from or additional to those available to the Borrower; (ii) the use of
counsel chosen by the Borrower to represent both the Borrower and such
Indemnified Person would present such counsel with an actual or potential
conflict of interest; (iii) the Borrower shall not have employed satisfactory
counsel to represent the Indemnified Person within a reasonable time after
notice of the institution of such action, claim, suit, proceeding or
investigation; or (iv) the Borrower shall authorize the Indemnified Person to
employ separate counsel (in addition to any local counsel) at the expense of the
Borrower. The Borrower shall not, in connection with any action, claim, suit,
proceeding or investigation, be liable for the fees and expenses of more than
one separate firm of legal counsel (in addition to any appropriate and necessary
local legal counsel) for all Indemnified Parties, except to the extent the use
of one counsel to represent all Indemnified Parties would present such counsel
with an actual or potential conflict of interest, and in the event that separate
counsel is to be retained to represent one or more Indemnified Parties, such
separate counsel shall be chosen by Administrative Agent.
(c) Each Indemnified Person agrees that without the Borrower's
prior written consent (not to be unreasonably withheld), it will not settle,
compromise or consent to the entry of any judgment in or otherwise seek to
terminate any claim, action, suit, proceeding or investigation in respect of
which indemnification could be sought hereunder unless such settlement,
compromise, consent or termination includes an unconditional release of the
Borrower and the Indemnified Person from any liabilities arising out of such
claim, action, suit, proceeding or investigation.
SECTION 10.6 Payments Set Aside. To the extent that the
Borrower makes a payment to the Administrative Agent or the Lenders, or the
Administrative Agent or the Lenders exercise their right of set-off, and such
payment or the proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any bankruptcy or other insolvency proceeding or
otherwise, then (a) to the extent of such
52
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Lender severally
agrees to pay to the Administrative Agent upon demand its Applicable Percentage
of any amount so recovered from or repaid by the Administrative Agent.
SECTION 10.7 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and each Lender.
SECTION 10.8 Assignments, Participations, etc. (a) Any Lender
may, with the written consent of the Borrower (at all times other than during
the existence of a Default or an Event of Default) and the Administrative Agent,
which consents shall not be unreasonably withheld or delayed, at any time assign
and delegate to one or more Eligible Assignees (provided that no written consent
of the Borrower or the Administrative Agent shall be required in connection with
any assignment and delegation by a Lender to an Eligible Assignee that is an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of all,
of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, provided, however, that the aggregate principal amount of the
Commitments and Loans assigned by any Lender to someone other than another
Lender shall be in a minimum amount of $5,000,000 (or if less, the entire
Commitments then held by such Lender) and integral multiplies of $1,000,000
thereafter and after giving effect to any such assignment by a Lender, the
aggregate amount of the Commitments and/or Loans held by such assigning Lender
is at least $5,000,000 (unless such Lender has assigned the entire Commitment
and Loans then held by it). The Borrower and the Administrative Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrower and the
Administrative Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to the Borrower and the Administrative Agent an
Assignment and Acceptance in the form of Exhibit E ("Assignment and Acceptance")
and (iii) the assignor Lender or Assignee has paid to the Administrative Agent a
processing fee in the amount of $3,500.
(b) From and after the date that the Administrative Agent
notifies the assignor Lender that it has received (and provided the required
consents with respect to) an executed Assignment and Acceptance and payment of
the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents.
(c) Immediately upon the Administrative Agent's receipt of the
processing fee payment under the Assignment and Acceptance, this Agreement shall
be deemed to be amended
53
to the extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitments and Loans allocated to each Assignee shall reduce such Commitments
and Loans of the assigning Lender pro tanto.
(d) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Borrower (a "Participant")
participating interests in any Loans or Commitment of that Lender and the other
interests of that Lender (the "Originating Lender") hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Lender's
obligations under this Agreement shall remain unchanged, (ii) the Originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Borrower and the Administrative Agent shall continue to deal solely
and directly with the Originating Lender in connection with the originating
Lender's rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Lender shall transfer or grant any participating interest
under which the Participant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other Loan Document,
except to the extent such amendment, consent or waiver would require unanimous
consent of the Lenders or of the Revolving Lenders or Term Lenders, as
applicable. In the case of any such participation, the Participant shall be
entitled to the benefit of Sections 3.1, 3.3 and 10.5 to the extent the Lender
selling such participation would be so entitled, and if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
SECTION 10.9 Confidentiality. Each Lender agrees to maintain
and to cause its Affiliates to maintain the confidentiality of all information
provided to it by the Borrower or any Subsidiary, or by the Administrative Agent
on behalf of the Borrower or any Subsidiary of either of them, under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated directly with the Borrower or
any Subsidiary; except to the extent such information (i) was or becomes
generally available to the public other than as a result of disclosure by the
Lender or in violation of any applicable confidentiality agreement known to the
Lender, or (ii) was or becomes available on a non-confidential basis from a
source other than the Borrower, provided that such source is not bound by a
confidentiality agreement with the Borrower and/or with any restrictions on its
use known to the Lender; provided, however, that any Lender may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Lender is subject or in connection with an
examination of such Lender by any such authority; provided that the Lender
requests confidential treatment of
54
such information to the extent permitted by law; (B) pursuant to subpoena or
other court process; (C) as may be required (in such Person's reasonable
judgment) in accordance with the provisions of any applicable Requirement of
Law; (D) to the extent reasonably required in connection with any litigation or
proceeding to which the Administrative Agent, any Lender or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (F)
to such Lender's independent auditors and other professional advisors who agree
to the confidentiality provisions hereof; (G) to any Participant or Assignee,
actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Lenders hereunder.
SECTION 10.10 Set-off. In addition to any rights and
remedies of the Lenders provided by law, if an Event of Default exists or the
Loans have been accelerated, each Lender is authorized at any time and from time
to time, without prior notice to the Borrower, any such notice being waived by
the Borrower to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by, such Lender to or
for the credit or the account of the Borrower against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not
the Administrative Agent or such Lender shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.
SECTION 10.11 Notification of Addresses, Lending Offices,
Etc. Each Lender shall notify the Administrative Agent in writing of any changes
in the address to which notices to the Lender should be directed, of addresses
of any Lending Office, of payment instructions in respect of all payments to be
made to it hereunder and of such other administrative information as the
Administrative Agent shall reasonably request.
SECTION 10.12 Counterparts. This Agreement may be executed
in any number of separate counterparts, each of which, when so executed, shall
be deemed an original, and all of said counterparts taken together shall be
deemed to constitute but one and the same instrument.
SECTION 10.13 Severability. The illegality or
unenforceability of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
SECTION 10.14 No Third Parties Benefitted. This Agreement is
made and entered into for the sole protection and legal benefit of the Borrower,
the Lenders, the Administrative Agent and the Agent-Related Persons, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
55
SECTION 10.15 Governing Law and Jurisdiction. (a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN 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 AGREEMENT, EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID OR BY ANY OTHER MEANS PERMITTED BY NEW YORK OR FEDERAL LAW.
SECTION 10.16 Waiver of Jury Trial. THE BORROWER, THE
LENDERS AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE
ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.17 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, except that the Borrower
may not assign or transfer any of its rights or
56
obligations under this Agreement without the prior written consent of the
Administrative Agent, the Fronting Bank and each Lender.
SECTION 10.18 Service of Process. On or prior to the
Effective Date, the Borrower shall appoint LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P. (the "Agent"), with an office on the date hereof at 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx, as its agent to receive on its behalf
and its property service of copies of the summons and complaints and any other
process which may be served in any such action or proceeding, provided that a
copy of such process is also mailed by registered or certified mail, postage
prepaid, to the Borrower at its address specified pursuant to Section 10.2. Such
service may be made by mailing or delivering a copy of such process to the
Borrower in care of the Process Agent at the Process Agent's above address, and
the Borrower hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. The Borrower agrees to indemnify the Process
Agent in connection with all matters relating to its appointment as agent of the
Borrower for such purposes, to enter into any agreement relating to such
appointment which such Process Agent may customarily require, and to pay such
Process Agent's customary fees upon demand. As an alternative method of service,
the Borrower also irrevocably consents to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to the
Borrower at its address specified pursuant to Section 10.2. Nothing in this
Section 10.18 shall affect the right of the Administrative Agent or any Lender
to serve legal process in any other manner permitted by law or affect the right
of the Administrative Agent or any Lender to bring any action or proceeding
against the Borrower, or any of its properties in the courts of any other
jurisdiction.
SECTION 10.19 Currency Indemnity. The Borrower, the
Administrative Agent and each Lender hereby agree that if, in the event that a
judgment is given in relation to any sum due to the Administrative Agent or any
Lender hereunder, such judgment is given in a currency (the "Judgment Currency")
other than that in which such sum was originally denominated (the "Original
Currency"), the Borrower agrees to indemnify the Administrative Agent or such
Lender, as the case may be, to the extent that the amount of the Original
Currency which could have been purchased by the Administrative Agent in
accordance with normal banking procedures on the Business Day following receipt
of such sum is less than the sum which could have been so purchased by the
Administrative Agent had such purchase been made on the day on which such
judgment was given or, if such day is not a Business Day, on the Business Day
immediately preceding the giving of such judgment
SECTION 10.20 Entire Agreement. This Agreement, together with the
other Loan Documents, embodies the entire agreement and understanding among the
Borrower, the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof except for those
matters expressly contained in the syndication letter dated November 19, 2001
among the Borrower, BofA, the Arranger, White Mountains Insurance Group, Ltd.
and Xxxxxxxx Group plc.
57
MONTPELIER RE HOLDINGS LTD.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------
Title: Director
---------------------------------
BANK OF AMERICA, N.A., as Administrative
Agent and Lender
By: /s/
_________________________________
Title: _________________________________
SCHEDULE 1.2
Pricing Grid
Applicable Margin for Offshore Rate Loans
----------------------------------------- Facility Fee
Leveraged Ratio Revolving Loans Term Loans Rate
--------------- ---------------- ---------------- ------------
Pricing Level I Less than or equal to 10% 37.5 50.0 12.5
-------------------------------------------------------------------------------------------------------------------
Pricing Level II Less than or equal to 20%, 60.0 75.0 15.0
but greater than 10%
-------------------------------------------------------------------------------------------------------------------
Pricing Level III Less than or equal to 25%, 65.0 85.0 20.0
but greater than 20%
-------------------------------------------------------------------------------------------------------------------
Pricing Level IV Greater than 25% 100.0 125.0 25.0
-------------------------------------------------------------------------------------------------------------------
SCHEDULE 2.1
COMMITMENTS
Revolving Loan Term Loan Revolving Term Voting
Lender Commitment Commitment Percentage Percentage Percentage
------ ----------- ------------- ---------- ---------- ----------
Bank of $50,000,000 $ 150,000,000 100.0000% 100.000% 100.000%
America, N.A.
----------- ------------- --------- -------- --------
Total $50,000,000 $ 150,000,000 100.0000% 100.000% 100.000%
SCHEDULE 4.1
JURISDICTIONS
ENTITY JURISDICTION
------ ------------
Montpelier Re Holdings Ltd. Bermuda
Montpelier Reinsurance Ltd. Bermuda
Montpelier Marketing Services (UK) Limited UK
SCHEDULE 4.9
SUBSIDIARIES
SUBSIDIARY DESIGNATION
---------- -----------
Montpelier Reinsurance Ltd. Insurance Subsidiary
Montpelier Marketing Services (UK) Limited Non-Insurance Subsidiary
SCHEDULE 10.2
ADDRESSES
LENDING OFFICES
ADDRESSES FOR NOTICES
---------------------
BANK OF AMERICA, NATIONAL ASSOCIATION,
-------------------------------------
as Administrative Agent for the Lenders
Bank of America, N.A.
Agency Management
0000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Abayari
Facsimile: (000) 000-0000
Lending Office and Notices (other than notice of Credit Extensions):
Bank of America, National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
MONTPELIER RE HOLDINGS LTD.
The Ace Xxxxxxxx
00 Xxxxxxxxx Xxxxxx
X.X. Xxx XX 0000
Xxxxxxxx XX XX
Xxxxxxx
Xxxxxxxxx: Controller
Facsimile: (000) 000-0000
EXHIBIT A
NOTICE OF BORROWING
Date: _____________
To: Bank of America N.A., as Administrative Agent for the Lenders parties
to the Credit Agreement dated as of December 12, 2001 (as extended,
renewed, amended or restated from time to time, the "Credit
Agreement") among Montpelier Re Holdings Ltd., certain Lenders which
are signatories thereto and Bank of America N.A., as Administrative
Agent
Ladies and Gentlemen:
The undersigned, Montpelier Re Holdings Ltd. (the "Borrower"), refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.4 of the
Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is __________,
20__.
2. The aggregate amount of the proposed Borrowing is $__________
in [Term] [Revolving] Loans.
3. The Borrowing is to be comprised of $__________ of [Base Rate]
[Offshore Rate] Loans.
4. The duration of the Interest Period for the Offshore Rate
Loans included in the Borrowing shall be [______ months].
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,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrower contained
in Article IV of the Credit Agreement are true and correct in all
material respects as though made on and as of such date (except to the
extent such representations and warranties relate to a specified
date);
(b) no Default or Event of Default has occurred and is
continuing, or would result from the making of such Loans; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans to exceed the combined
Revolving Loan Commitments.
MONTPELIER RE HOLDINGS LTD.
By: _________________________________
Title: _________________________________
A-1
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
Date: _________
To: Bank of America N.A., as Administrative Agent for the Lenders parties
to the Credit Agreement dated as of December 12, 2001 (as extended,
renewed, amended or restated from time to time, the "Credit -------
Agreement") among Montpelier Re Holdings Ltd., certain Lenders which
are signatories thereto, and Bank of America N.A., as Administrative
Agent
Ladies and Gentlemen:
The undersigned, Montpelier Re Holdings Ltd. (the "Borrower"), refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.5 of the
Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The Conversion/Continuation Date is __________, 20__.
2. The aggregate amount of the [Term] [Revolving] Loans to be
[converted] [continued] is $__________.
3. The Loans are to be [converted into] [continued as] [Offshore Rate]
[Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be [__ days] [__ months].
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the proposed
Conversion/Continuation Date, before and after giving effect thereto and to the
application of the proceeds therefrom:
(a) no Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation]; and
(b) the proposed [conversion] [continuation] will not cause the
aggregate principal amount of all outstanding Revolving Loans to exceed the
combined Commitments of the Lenders.(1)
MONTPELIER RE HOLDINGS LTD.
By: _________________________________
Title: _________________________________
-------------------------------
(1) Delete if only Term Loans.
B-1
EXHIBIT C
Montpelier Re Holdings Ltd.
COMPLIANCE CERTIFICATE
Financial Statement Date: __________
Reference is made to that certain Credit Agreement dated as of
December 12, 2001 (as extended, renewed, amended or restated from time to time,
the "Credit Agreement") among Montpelier Re Holdings Ltd., a company organized
under the laws of Bermuda (the "Borrower"), the various financial institutions
from time to time parties to the Credit Agreement (the "Lenders"), and Bank of
America N.A., as agent for the Lenders (in such capacity, the "Administrative
Agent"). Unless otherwise defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Credit Agreement.
The undersigned hereby certifies as of the date hereof that he/she is
the [chief executive officer] [chief financial officer] [treasurer] [controller]
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Lenders and the Administrative Agent on the behalf of
the Borrower and its consolidated Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in
connection with the financial statements required by Section 5.1(a)(ii) of the
Credit Agreement.
1. Attached as Schedule 1 hereto are (a) a true and correct copy
of the audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of the Fiscal Year ended ____________, ____ and (b)
the related consolidated statements of income and retained earnings and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of ______
which report states that such consolidated financial statements are complete and
correct and have been prepared in accordance with GAAP, and fairly present, in
all material respects, the consolidated financial position and the consolidated
results of operations and cash flows of the Borrower and its Subsidiaries as at
the end of such Fiscal Year and for the period then ended.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [5.1(a)(i)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy
of the unaudited consolidated and consolidating balance sheets of the Borrower
and its consolidated Subsidiaries as of the end of the Fiscal Quarter ended
__________, _____, and (b) the related unaudited consolidated and consolidating
statements of income, and cash flows for the portion of the Fiscal Year ending
on the last day of such quarter, and certified by [chief executive officer] [the
chief financial officer] [treasurer] [controller] that such financial statements
were prepared in accordance with GAAP (subject only to normal year-end
adjustments and except that footnote and schedule disclosure may be abbreviated)
and fairly present, in all material respects, the
C-1
consolidated results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as at the end of such Fiscal Quarter and for the
period then ended.
2. The undersigned has reviewed and is familiar with the terns of
the Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Borrower during the accounting period covered by the attached
financial statements.
3. To the best of the undersigned's knowledge, the Borrower, during
such period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Credit Agreement to be
observed, performed or satisfied by the Borrower, and the undersigned has no
knowledge of any Default or Event of Default.
4. The following financial covenant analyses and information set
forth on Schedule 2 attached hereto are true and accurate on and as of the date
of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of __________, ____.
MONTPELIER RE HOLDINGS LTD.
By: _________________________________
Title: _________________________________
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Schedule 2
I. Section 6.1 - Leverage Coverage Ratio.
-------------------------------------
A. Total Debt $____________
B. Hedging Obligations $____________
C. Consolidated Debt (Item A minus Item B) $____________
D. Consolidated Net Worth $____________
E. Intangible Assets $____________
F. Capitalized Expenses $____________
G. Tangible Net Worth (Item D minus E minus F) $____________
H. Item C plus Item G $____________
I. Ratio of Item C to Item H ____________%
Item I is not permitted to exceed 30%
II. Section 6.2 - Net Worth.
-----------------------
A. 50% of Positive Consolidated Net Income for Fiscal Quarter (with
no deductions for net losses) $____________
B. Cumulative Positive Consolidated Net Income for previous Fiscal
Quarters (Sum of Item II B plus Item II A in each case as shown
on the last Compliance Certificate) $____________
C. 50% of Net Equity Proceeds since Effective Date $____________
D. Additional Restricted Payments since Effective Date $____________
E. Item A plus Item B plus Item C minus Item D $____________
F. Net Worth as at end of Fiscal Quarter $____________
G. Intangible Assets and Capitalized Expenses $____________
H. Tangible Net Worth (Item F minus Item G) $____________
I. Required Tangible Net Worth ($475,000,000 plus Item E) $____________
III. Section 6.3 - Statutory Premiums/Insurance Subsidiary Net Worth
(commencing March 31, 2002).
---------------------------------------------------------------
A. Statutory Net Written Premiums for the Insurance Subsidiaries for
the four Fiscal Quarters then ended $____________
B. Consolidated Insurance Subsidiary Net Worth for the Insurance
Subsidiaries on the last day of such four Fiscal Quarters then
ended $____________
C. Item A divided by Item B _________:1.0
[Item C must be less than 1.5:1.0]
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IV. Section 6.8 - Unencumbered Assets.
---------------------------------
A. Fair Market Value of Unencumbered Asset $____________
B. Required Amount $400,000,000
V. Section 6.10 - Restricted Payments.(2)
----------------------------------
A. Cumulative Consolidated Net Income from April 1, 2003 through
Fiscal Quarter just ended $____________
B. 50% of Item A $____________
C. Permitted Restricted Payments made since April 1, 2003 [Item C
can't exceed Item B] $____________
D. Additional Restricted Payment to be made $____________
E. Item D multiplied by 43% $____________
F. Debt Capital Refunding to be made $____________
VI. Pricing Level.
-------------
A. Leverage Ratio (from Item I.I.) ____________%
B. Applicable Pricing Level $____________
Attached hereto is a list of all Invested Assets of the Borrower and
its Subsidiaries specifying CUSIP, name of investment and market value, par
value, cost, coupon and rating, as applicable, indicating the category of
Permitted Investment, if applicable and showing compliance with Section 5.9.
-------------------------------
(2) Items I, II, and III and V to be included only in Compliance Certificate
given pursuant to Section 6.10.
C-3
EXHIBIT D
[FORM OF] PROMISSORY NOTE
$-------------------- --------, ----
FOR VALUE RECEIVED, the undersigned, Montpelier Re Holdings Ltd.,
a company organized under the laws of Bermuda (the "Borrower"), hereby promises
to pay to the order of ____________________ (the "Lender") the principal sum of
__________ Dollars ($__________) or, if less, the aggregate unpaid principal
amount of all [Revolving] [Term] Loans made by the Lender to the Borrower
pursuant to the Credit Agreement, dated as of December 12, 2001 (such Credit
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time, being hereinafter called the "Credit Agreement "), among the
Company, the Lender, the other lenders parties thereto, and Bank of America
N.A., as Administrative Agent for the Lenders, on the dates and in the amounts
provided in the Credit Agreement. The Borrower further promises to pay interest
on the unpaid principal amount of the Loans evidenced hereby from time to time
at the rates, on the dates, and otherwise as provided in the Credit Agreement.
The Lender is authorized to endorse the amount and the date on
which each Loan is made, the maturity date therefor and each payment of
principal with respect thereto on the schedules annexed hereto and made a part
hereof, or on continuations thereof which shall be attached hereto and made a
part hereof; provided, that any failure to endorse such information on such
schedule or continuation thereof shall not in any manner affect any obligation
of the Borrower under the Credit Agreement and this Promissory Note (the
"Note").
This Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
Terms defined in the Credit Agreement are used herein with their
defined meanings therein unless otherwise defined herein. This Note shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York.
MONTPELIER RE HOLDINGS LTD.
By: _________________________________
Title: _________________________________
D-1
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE LOANS
(3) (5)
(2) Type (4) Amount
Amount of Loan Maturity Date of Base (6)
(1) of Base (Revolving/ of Base Rate Loan Notation
Date Rate Loan Term) Rate Loan Repaid Made By
---- --------- ---- --------- ------ -------
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
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Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(3) (5)
(2) Type (4) Amount of
Amount of Loan Maturity Date Offshore (6)
(1) of Base (Revolving/ of Base Rate Loan Notation
Date Rate Loan Term) Rate Loan Repaid Made By
---- --------- ---- --------- ------ -------
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
____________________ _________________ __________________ _________________ __________________ _________________
D-3
EXHIBIT E
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
---------------------------------------------
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of __________, ____ is made between ____________ (the
"Assignor") and ____________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement
dated as of December 12, 2001 (as amended, amended and restated, modified,
supplemented or renewed, the "Credit Agreement") among Montpelier Re Holdings
Ltd., a company organized under the laws of Bermuda (the "Borrower"), the
several financial institutions from time to time party thereto (including the
Assignor, the "Lenders"), and Bank of America N.A., as agent for the Lenders
(the "Administrative Agent"). Any terms defined in the Credit Agreement and not
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Revolving Loans (the "Revolving Loans") to the Borrower in
an aggregate amount not to exceed $_____________ (the "Revolving Loan
Commitment");
WHEREAS, [the Assignor has made Revolving Loans in the aggregate
principal amount of $_____________ to the Borrower] [no Revolving Loans are
outstanding under the Credit Agreement]; and
WHEREAS, as provided under the Credit Agreement, the Assignor has
made Term Loans in the aggregate principal amount of $___________ to the
Borrower; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of
the] [all] rights and obligations of the Assignor under the Credit Agreement in
respect of its [Revolving Loan Commitment, together with a corresponding portion
of each of its outstanding Revolving Loans in the amount equal to $_________]
[and] [Term Loans] in an amount equal to $_________ (the "Assigned Amount") on
the terms and subject to the conditions set forth herein and the Assignee wishes
to accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) ____% (the "Assignee's Percentage
Share") of (A) [the Revolving Loan Commitment and the Revolving Loans] [and]
[the Term Loans] of the Assignor and (B) all related rights, benefits,
obligations,
E-1
liabilities and indemnities of the Assignor with respect thereto under and in
connection with the Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification[, with a Revolving Loan
Commitment in an amount equal to the Assigned Amount]. The Assignee 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
Lender. [It is the intent of the parties hereto that the Revolving Loan
Commitment of the Assignor shall, as of the Effective Date, be reduced by an
amount equal to the Assigned Amount and the Assignor shall relinquish its rights
and be released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee; provided, however, the
Assignor shall not relinquish its rights under Sections 10.4 and 10.5 of the
Credit Agreement to the extent such rights relate to the time prior to the
Effective Date.](3)
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's [Revolving Loan Commitment
will be $__________] [and] [the Assignee's outstanding Term Loans will be
$__________].
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's [Revolving Loan Commitment
will be $ __________] [and] [the Assignor's outstanding Term Loans will be
$_______________.]
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to
$______________.
(b) The [Assignor] [Assignee] further agrees to pay to the
Administrative Agent a processing fee in the amount specified in Section 10.8(a)
of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective
Date with respect to the [Revolving Loan Commitment, the Revolving Loans] [and]
[the Term Loans] shall be for the account of the Assignor. Any interest, fees
and other payments accrued on and after the Effective Date with respect to the
Assigned Amount shall be for the account of the Assignee. Each of the Assignor
and the Assignee agrees that it will hold in trust for the other party any
interest, fees and other amounts which it may receive to which the other party
is entitled pursuant to the preceding sentence and pay to the other party any
such amounts which it may receive promptly upon receipt.
--------------------
(3) Include only if Revolving Loan Commitment is assigned.
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4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the
Credit Agreement and the Schedules and Exhibits thereto, together with copies of
the most recent financial statements referred to in Section 5.1 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Administrative Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and legal decisions in taking or not
taking action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date
for this Assignment and Acceptance shall be ___________, _____ (the "Effective
Date"); provided that the following conditions precedent have been satisfied on
or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Borrower and the Administrative
Agent required for an effective assignment of the Assigned Amount by the
Assignor to the Assignee under Section 10.8(a) of the Credit Agreement shall
have been duly obtained and shall be in full force and effect as of the
Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof
and in Section 10.8(a) of the Credit Agreement shall have been paid to the
Administrative Agent; and
(v) the Assignor shall have assigned and the Assignee shall
have assumed a percentage equal to the Assignee's Applicable Percentage of the
rights and obligations of the Assignor under the Credit Agreement (if such
agreement exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Administrative
Agent for acknowledgment by the Administrative Agent, a Notice of Assignment in
the form attached hereto as Schedule 1.
[6. Administrative Agent. [INCLUDE ONLY IF ASSIGNOR IS ADMINISTRATIVE
AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Administrative Agent by the Lenders
pursuant to the terms of the Credit Agreement.
E-3
(b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Administrative Agent under the Credit
Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the
Administrative Agent and the Borrower that under applicable law and treaties no
tax will be required to be withheld by the Lender with respect to any payments
to be made to the Assignee hereunder, (b) agrees to furnish (if it is organized
under the laws of any jurisdiction other than the United States or any State
thereof) to the Administrative Agent and the Borrower prior to the time that the
Administrative Agent or Borrower is required to make any payment of principal,
interest or fees hereunder, duplicate executed originals of either U.S. Internal
Revenue Service Form W-8BEN and agrees to provide a new Form W-8BEN upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by the Assignee, and (c) agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) 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 Lien or other adverse claim; (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor 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 execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Guarantor or the Borrower, or the performance or observance by the
Guarantor or the Borrower, of any of its respective obligations under the Credit
Agreement, the Guaranty or any other instrument or document furnished in
connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute
E-4
and deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this Assignment
and Acceptance, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any Person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Credit Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and
deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrower or the Administrative Agent, which may
be required in connection with the assignment and assumption contemplated
hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment
and Acceptance shall be in writing and signed by the parties hereto. No failure
or delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off
or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number
of counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. The Assignor and
the Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in New York over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably
E-5
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the
Assignor and the Assignee, provided that such provisions are not inconsistent
with the Credit Agreement.]
E-6
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
this Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By: _________________________________
Title: _________________________________
By: _________________________________
Title: _________________________________
Address:
[ASSIGNEE]
By: _________________________________
Title: _________________________________
By: _________________________________
Title: _________________________________
E-7
SCHEDULE I
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 20__
Bank of America, N.A.,
as Administrative Agent
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Montpelier Re Holdings Ltd.
The Ace Xxxxxxxx
00 Xxxxxxxxx Xxxxxx
P.O. Box HM 2079
Pembroke HM HX, Bermuda
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of December 12, 2001 (as
amended, amended and restated, modified, supplemented or renewed from time to
time the "Credit Agreement") among Montpelier Re Holdings Ltd. (the "Borrower"),
the Lenders referred to therein, and Bank of America N.A. as agent for the
Lenders (the "Administrative Agent"). Terms defined in the Credit Agreement are
used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________ (the "Assignor") to _______________ (the "Assignee") of
_______% of the right, title and interest of the Assignor in and to the Credit
Agreement (including, without limitation, the right, title and interest of the
Assignor in and to the [Revolving Loan Commitments of the Assignor[,] [and] all
outstanding [Revolving] [Term] Loans made by the Assignor) pursuant to the
Assignment and Acceptance Agreement attached hereto (the "Assignment and
Acceptance"). Before giving effect to such assignment the Assignor's [Revolving
Loan Commitment is $________,] [the aggregate amount of the Assignor's
outstanding Term Loans is $__________] [, and the aggregate amount of its
outstanding Revolving Loans is $_________________].
2. The Assignee agrees that, upon receiving the consent of the
Administrative Agent and, if applicable, Montpelier Re Holdings Ltd. to such
assignment, the Assignee will be bound by the terms of the Credit Agreement as
fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
A. Notice Address:
Assignee name ________________________________
I-1
Address ________________________________
Attention: ________________________________
Telephone: ( )
________________________________
Telecopier: ( )
________________________________
Telex (Answerback):____________________________
B. Payment Instructions:
Account No.: ________________________________
At:
________________________________
Reference: ________________________________
Attention: ________________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very Truly Yours,
[NAME OF ASSIGNOR]
By: ________________________________
Title: ________________________________
By: ________________________________
Title: ________________________________
Address:
[NAME OF ASSIGNEE]
By: ________________________________
Title: ________________________________
By: ________________________________
Title: ________________________________
I-2
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
MONTPELIER RE HOLDINGS LTD.
By: ________________________________
Title: ________________________________
BANK OF AMERICA, N.A.,
as Administrative Agent
By: ________________________________
Title: ________________________________
I-3
AMENDMENT AGREEMENT
This Amendment Agreement ("Amendment") is entered into as of December
26, 2001 among Montpelier Re Holdings Ltd., a Bermuda company (the "Borrower"),
and the Lender listed on the signature pages hereto (the "Lender") and Bank of
America, N.A., in its capacity as Administrative Agent for the Lender (the
"Administrative Agent").
R E C I T A L S
WHEREAS, the Borrower, the Lender and the Administrative Agent are
parties to the Credit Agreement dated as of December 12, 2001 (the "Credit
Agreement") pursuant to which the Lender has made available to the Borrower a
revolving loan facility and a term loan facility; and
WHEREAS, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
SECTION 1. CREDIT AGREEMENT DEFINITIONS. Capitalized terms used herein
that are defined in the Credit Agreement shall have the same meaning when used
herein unless otherwise defined herein.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. Effective on, the date this
Amendment is executed by all parties hereto, the Credit Agreement shall be
amended as follows:
2.1 Amendment to Section 1. Section 1.1 of the Credit Agreement is
amended by adding the following definitions in the proper alphabetical order:
(a) Granting Lender - is defined in Section 10.8(f).
(b) SPC - is defined in Section 10.8(f).
2.2 Amendment to Section 6.2. Section 6.2 of the Credit Agreement is
amended in its entirety to read as follows:
Not permit the Tangible Net Worth of the Borrower to be less
than the sum of (a) $525,000,000 plus (b) 50% of positive
quarterly Consolidated Net Income (with no deduction for net
losses) plus (c) 50% of Net Equity Proceeds received after
January 11, 2002 minus (d) Additional Restricted Payments.
2.3 Amendment to Section 10.8. Section 10.8 is amended by inserting the
following paragraph (f) at the end thereof:
(f) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle (a "SPC"), identified as such in writing from time to time by
the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such
Granting Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to
make any Revolving Loan, (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of a Revolving
Loan, the Granting Lender shall be obligated to make such Revolving
Loan pursuant to the terms hereof and (iii) no SPC or Granting Lender
shall be entitled to receive any greater amounts pursuant to Section
3.1, 3.3 or 3.4, than the Granting Lender would have been entitled to
receive had the Granting Lender not otherwise granted such SPC the
option to provide any Loan to the Borrower. The making of a Revolving
Loan by an SPC hereunder shall utilize the Revolving Loan Commitment of
the Granting Lender to the same extent, and as if, such Revolving Loan
were made by such Granting Lender. Each party hereto hereby agrees that
no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the
Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any
other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof.
Notwithstanding the foregoing, the Granting Lender unconditionally
agrees to indemnify the Borrower, the Administrative Agent and each
Lender against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be incurred by or asserted
against the Borrower, the Administrative Agent, or such Lender, as the
case may be, in any way relating to or arising as a consequence of any
such forbearance or delay in the initiation of any such proceeding
against its SPC. Each party hereto hereby acknowledges and agrees that
no SPC shall have the rights of a Lender hereunder, such rights being
retained by the applicable Granting Lender. Accordingly, and without
limiting the foregoing, each party hereby further acknowledges and
agrees that no SPC shall have any voting rights hereunder and that the
voting rights attributable to any Loan made by an SPC shall be
exercised only by the relevant Granting Lender and that each Granting
lender shall serve as the administrative agent and attorney-in-fact for
its SPC and shall on behalf of its SPC receive any and all payments
made for the benefit of such SPC. In addition, notwithstanding anything
to the contrary contained in this Section 10.8(f), any SPC may (i) with
notice to, but without the prior written consent of, the Borrower and
the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Revolving
Loans or Term Loans to the Granting Lender or to any financial
institutions (consented to by the Borrower and Administrative Agent)
providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Revolving Loans or Term
Loans and (ii) disclose on a confidential basis in accordance with this
Agreement any non-public information relating to its Revolving Loans or
Term Loans to any rating agency, commercial paper dealer or provider of
any surety, guarantee or credit or liquidity
2
enhancement to such SPC. This section may not be amended without the
written consent of each Granting Lender, all or any part of whose Loan
is being funded by an SPC at the time of such amendment.
SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the
Lender and the Administrative Agent to execute and deliver this Amendment, the
Borrower hereby represents and warrants that:
(a) no Default or Event of Default has occurred and is
continuing or will result from the execution and delivery or
effectiveness of this Amendment; and
(b) the warranties of the Borrower contained in Article IV of
the Credit Agreement are true and correct in all material respects as
of the date hereof, with the same effect as though made on such date
(except where such representation speaks as of a specified date).
SECTION 4. GENERAL.
4.1 Reaffirmation of Loan Documents. From and after the date hereof,
each reference that appears in any Loan Document to the Credit Agreement shall
be deemed to be a reference to the Credit Agreement as amended hereby. As
amended hereby, the Credit Agreement is hereby reaffirmed, approved and
confirmed in every respect and shall remain in full force and effect.
4.2 Counterparts; Effectiveness. This Amendment may be executed by the
parties hereto in any number of counterparts and by the different parties in
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same agreement.
4.3 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 5. LOAN DOCUMENT. This Amendment is a Loan Document.
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Title: Chief Executive Officer
------------------------------------
BANK OF AMERICA, N.A., as Administrative
Agent and Lender
By: /s/ [Illegible]
--------------------------------------
Title: Vice President
------------------------------------
4
SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement ("Amendment") is entered into as of June
17, 2002 among Montpelier Re Holdings Ltd., a Bermuda company (the "Borrower"),
and the Lenders listed on the signature pages hereto (the "Lenders") and Bank of
America, N.A., in its capacity as Administrative Agent for the Lender (the
"Administrative Agent").
R E C I T A L S
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to the Credit Agreement dated as of December 12, 2001, as amended by
Amendment Agreement dated as of December 26, 2001 (the "Credit Agreement")
pursuant to which the Lenders made available to the Borrower a revolving loan
facility and a term loan facility; and
WHEREAS, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
SECTION 1. CREDIT AGREEMENT DEFINITIONS. Capitalized terms used herein
that are defined in the Credit Agreement shall have the same meaning when used
herein unless otherwise defined herein.
SECTION 2. AMENDMENT TO CREDIT AGREEMENT. Effective on (and subject to the
occurrence of) the Second Amendment Effective Date (as defined below), the
Credit Agreement shall be amended as follows: The first sentence of Section 6.10
of the Credit Agreement shall be amended in its entirety to read as follows:
Not, and not permit its Subsidiaries to declare, pay or set aside funds
for any Restricted Payments other than dividends or distributions payable in
shares of capital stock of the Borrower.
SECTION 3. LIMITED WAIVER. Effective on (and subject to the occurrence of)
Page 1
the Second Amendment Effective Date (as defined below), notwithstanding Sections
6.4 and 6.8 of the Credit Agreement, the Borrower or Montpelier Reinsurance Ltd.
shall be permitted to obtain a letter of credit in an amount not to exceed
(pound)20,000,000 secured by cash to support the obligation of such Person to
purchase shares in Wellington Re Limited.
SECTION 4. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders
and the Administrative Agent to execute and deliver this Amendment, the Borrower
hereby represents and warrants that:
(a) no Default or Event of Default has occurred and is continuing or
will result from the execution and delivery or effectiveness of this
Amendment; and
(b) the warranties of the Borrower contained in Article IV of the
Credit Agreement are true and correct in all material respects as of the
date hereof, with the same effect as though made on such date (except
where such representation speaks as of a specified date).
SECTION 5. CONDITIONS TO EFFECTIVENESS. The amendments set forth in
Section 2 and the Consent set forth in Section 3 shall become effective on the
date (the "Second Amendment Effective Date") upon (i) receipt by the
Administrative Agent of four counterparts of this Amendment executed by the
Borrower, the Administrative Agent and the Required Lenders and (ii) payment by
the Borrower to the Administrative Agent of an amendment fee equal to $40,000,
payable pro rata to the executing Lenders.
SECTION 6. GENERAL.
6.1 Reaffirmation of Loan Documents. From and after the date hereof, each
Page 2
reference that appears in any Loan Document to the Credit Agreement shall be
deemed to be a reference to the Credit Agreement as amended hereby. As amended
hereby, the Credit Agreement is hereby reaffirmed, approved and confirmed in
every respect and shall remain in full force and effect.
6.2 Counterparts; Effectiveness. This Amendment may be executed by the
parties hereto in any number of counterparts and by the different parties in
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same agreement.
6.3 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 7. LOAN DOCUMENT. This Amendment is a Loan Document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By: /s/ Xxxxxx X. X. Xxxxxx
-----------------------------------------
Title: Chief Operating Officer
--------------------------------------
BANK OF AMERICA, N.A., as
Administrative Agent and Lender
By: /s/
-----------------------------------------
Title: Principal
-------------------------------------
Page 3
THE BANK OF N.T. XXXXXXXXXXX &
SON LIMITED
By: /s/
-----------------------------------------
Title: Vice President
--------------------------------------
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Title: Director
--------------------------------------
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
THE BANK OF BERMUDA LTD.
By: /s/ A. Xxxxx Xxxxxxx
-----------------------------------------
Title: V.P. - Credit Manager
--------------------------------------
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Title: Director
--------------------------------------
Page 0
XXX XXXX XX XXX XXXX
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
BARCLAYS BANK PLC
By: /s/
----------------------------------------
Title: Relationship Director
-------------------------------------
Page 5
THIRD AMENDMENT AGREEMENT
-------------------------
This Third Amendment Agreement ("Amendment") is entered into as of
August 1, 2002 among Montpelier Re Holdings Ltd., a Bermuda company (the
"Borrower"), and the Lenders listed on the signature pages hereto (the
"Lenders") and Bank of America, N.A., in its capacity as Administrative Agent
for the Lender (the "Administrative Agent").
R E C I T A L S
---------------
WHEREAS, the Borrower, the Lenders and the Administrative Agent are
parties to the Credit Agreement dated as of December 12, 2001, as amended by
Amendment Agreement dated as of December 26, 2001 and by Second Amendment
Agreement dated June 17, 2002 (the "Credit Agreement") pursuant to which the
Lenders made available to the Borrower a revolving loan facility and a term loan
facility; and
WHEREAS, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
SECTION 1. CREDIT AGREEMENT DEFINITIONS. Capitalized terms used herein
that are defined in the Credit Agreement shall have the same meaning when used
herein unless otherwise defined herein.
SECTION 2. AMENDMENT TO CREDIT AGREEMENT. Effective on (and subject to the
occurrence of) the Third Amendment Effective Date (as defined below), the Credit
Agreement shall be amended as follows:
(a) the definition of "GAAP" in Section 1.1 of the Credit
Agreement is amended in its entirety to read as follows:
GAAP means (a) for purposes of the financial statements delivered pursuant
to Section 5.1(a), the maintenance of books and records under Section 5.3
and the reserves referred to in Sections 4.11, 5.5, 6.8(i) and (viii), and
7.1(d), generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within
the U.S. accounting profession), which are applicable to the circumstances
as of the date of determination and (b) for all other purposes including
calculation of financial covenants, generally accepted accounting
principles set forth from time to time in the opinions and pronouncements
of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession)
which are applicable to Persons reporting on a "consolidated" rather than
a "combined" basis.
(b) Section 4.2 of the Credit Agreement is amended by inserting
following the words "present fairly the consolidated position" the words
"(or, in the event that GAAP requires the financial statements to be
presented on a combined basis, present fairly the combined position)".
(c) Section 5.1(a) of the Credit Agreement is amended by adding the
following new clause (iii) at the end thereof:
(iii) In the event that GAAP requires the financial statements
required under clauses (i) and (ii) above to be presented on a combined
basis, the Borrower shall deliver such combined and combining statements in
lieu of the required consolidated and consolidating financial statements.
(d) Exhibit C to the Credit Agreement is deleted and Exhibit C
attached hereto is substituted therefor.
SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders
and the Administrative Agent to execute and deliver this Amendment, the Borrower
hereby represents and warrants that:
(a) no Default or Event of Default has occurred and is continuing or
will result from the execution and delivery or effectiveness of this
Amendment; and
(b) the warranties of the Borrower contained in Article IV of the
Credit Agreement are true and correct in all material respects as of the
date hereof, with the same effect as though made on such date (except where
such representation speaks as of a specified date).
SECTION 4. CONDITIONS TO EFFECTIVENESS. The amendments set forth in Section
2 shall become effective on the date (the "Third Amendment Effective Date") upon
receipt by the Administrative Agent of four counterparts of this Amendment
executed by the Borrower, the Administrative Agent and the Required Lenders.
SECTION 5. GENERAL.
5.1 Reaffirmation of Loan Documents. From and after the date hereof, each
reference that appears in any Loan Document to the Credit Agreement shall be
deemed to be a reference to the Credit Agreement as amended hereby. As amended
hereby, the Credit Agreement is hereby reaffirmed, approved and confirmed in
every respect and shall remain in full force and effect.
5.2 Counterparts; Effectiveness. This Amendment may be executed by the
parties hereto in any number of counterparts and by the different parties in
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same agreement.
2
5.3 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 6. LOAN DOCUMENT. This Amendment is a Loan Document.
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By:
--------------------------------
Title:
-----------------------------
BANK OF AMERICA N.A., as
Administrative Agent and Lender
By:
--------------------------------
Title:
-----------------------------
THE BANK OF N.T. XXXXXXXXXXX &
SON LIMITED
By:
--------------------------------
Title:
-----------------------------
CREDIT SUISSE FIRST BOSTON
By:
--------------------------------
Title:
-----------------------------
THE BANK OF BERMUDA LTD.
By:
--------------------------------
Title:
-----------------------------
FLEET NATIONAL BANK
By:
--------------------------------
Title:
-----------------------------
THE BANK OF NEW YORK
By:
--------------------------------
Title:
-----------------------------
4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By: /s/ Xxxx XxXxxxxxxx
__________________________
Title: SVP & FINANCIAL CONTROLLER
__________________________
BANK OF AMERICA. N.A., as
Administrative Agent and Lender
By: ______________________________
Title: ___________________________
THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED
By: ______________________________
Title: ___________________________
CREDIT SUISSE FIRST BOSTON
By: ______________________________
Title: ___________________________
THE BANK OF BERMUDA LTD.
By: ______________________________
Title: ___________________________
FLEET NATIONAL BANK
By: ______________________________
Title: ___________________________
THE BANK OF NEW YORK
By: ______________________________
Title: ___________________________
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By:_______________________________
Title:____________________________
BANK OF AMERICA, N.A. as
Administrative Agent and Lender
/s/ XXXXX XXXXX
By:_______________________________
PRINCIPAL
Title:____________________________
THE BANK OF N.T. XXXXXXXXXXX &
SON LIMITED
By:_______________________________
Title:____________________________
CREDIT SUISSE FIRST BOSTON
By:_______________________________
Title:____________________________
THE BANK OF BERMUDA LTD.
By:_______________________________
Title:____________________________
FLEET NATIONAL BANK
By:_______________________________
Title:____________________________
THE BANK OF NEW YORK
By:_______________________________
Title:____________________________
6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By: _____________________________________
Title: __________________________________
BANK OF AMERICA, N.A., as
Administrative Agent and Lender
By: _____________________________________
Title: __________________________________
THE BANK OF N.T. XXXXXXXXXXX & SON LIMITED
[ILLEGIBLE]
By:______________________________________
[ILLEGIBLE]
Title:___________________________________
CREDIT SUISSE FIRST BOSTON
By: _____________________________________
Title: __________________________________
THE BANK OF BERMUDA LTD.
By: _____________________________________
Title: __________________________________
FLEET NATIONAL BANK
By: _____________________________________
Title: __________________________________
THE BANK OF NEW YORK
By: _____________________________________
Title: __________________________________
7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By:
-------------------------------------
Title:
----------------------------------
BANK OF AMERICA, N.A., as
Administrative Agent and Lender
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF N.T. XXXXXXXXXXX &
SON LIMITED
By:
-------------------------------------
Title:
----------------------------------
CREDIT SUISSE FIRST BOSTON
By: /s/ XXX XXXXX
-------------------------------------
Title: Director
----------------------------------
By: /s/ XXXXXX X. GAMES
-------------------------------------
Title: Director
----------------------------------
THE BANK OF BERMUDA LTD.
By:
-------------------------------------
Title:
----------------------------------
FLEET NATIONAL BANK
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK
By:
-------------------------------------
Title:
----------------------------------
8
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By:
-------------------------------------
Title:
----------------------------------
BANK OF AMERICA, N.A., as
Administrative Agent and Lender
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF N.T. XXXXXXXXXXX &
SON LIMITED
By:
-------------------------------------
Title:
----------------------------------
CREDIT SUISSE FIRST BOSTON
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF BERMUDA LTD.
By: /s/ A. XXXXX XXXXXXX
-------------------------------------
Title: VP - Credit Manager
----------------------------------
FLEET NATIONAL BANK
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK
By:
-------------------------------------
Title:
----------------------------------
9
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By:
------------------------------
Title:
---------------------------
BANK OF AMERICA, N.A., as
Administrative Agent and Lender
By:
------------------------------
Title:
---------------------------
THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED
By:
------------------------------
Title:
---------------------------
CREDIT SUISSE FIRST BOSTON
By:
------------------------------
Title:
---------------------------
THE BANK OF BERMUDA LTD.
By:
------------------------------
Title:
---------------------------
FLEET NATIONAL BANK
BY: /s/ XXXXX X. XXXXXXXXX
----------------------------
TITLE: DIRECTOR
THE BANK OF NEW YORK
By:
------------------------------
Title:
---------------------------
10
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by the respective officers as of the date and year first above written.
MONTPELIER RE HOLDINGS LTD.
By:
--------------------------------
Title:
-----------------------------
BANK OF AMERICA N.A., as
Administrative Agent and Lender
By:
--------------------------------
Title:
-----------------------------
THE BANK OF N.T. XXXXXXXXXXX &
SON LIMITED
By:
--------------------------------
Title:
-----------------------------
CREDIT SUISSE FIRST BOSTON
By:
--------------------------------
Title:
-----------------------------
THE BANK OF BERMUDA LTD.
By:
--------------------------------
Title:
-----------------------------
FLEET NATIONAL BANK
By:
--------------------------------
Title:
-----------------------------
THE BANK OF NEW YORK
By: /s/ XXXX XXXXX
--------------------------------
Title: Vice President
-----------------------------
11
BARCLAYS BANK PLC
By: /s/ XXXXXXX XXXXXX
--------------------------------
Title: Relationship Director
----------------------------
12
EXHIBIT C
Montpelier Re Holdings Ltd.
COMPLIANCE CERTIFICATE
Financial Statement Date: __
Reference is made to that certain Credit Agreement dated as of December 12,
2001 (as extended, renewed, amended or restated from time to time, the "Credit
Agreement") among Montpelier Re Holdings Ltd., a company organized under the
laws of Bermuda (the "Borrower"), the various financial institutions from time
to time parties to the Credit Agreement (the "Lenders"), and Bank of America
N.A., as agent for the Lenders (in such capacity, the "Administrative Agent").
Unless otherwise defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Credit Agreement.
The undersigned hereby certifies as of the date hereof that he/she is the
[chief executive officer] [chief financial officer] [treasurer] [controller] of
the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Lenders and the Administrative Agent on the behalf of
the Borrower and its [consolidated/combined] Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by Section 5.1(a)(ii) of the Credit Agreement.
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
audited [consolidated/combined] balance sheet of the Borrower and its
[consolidated/combined] Subsidiaries as at the end of the Fiscal Year ended
___________, ___ and (b) the related [consolidated/combined] statements of
income and retained earnings and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous fiscal
year, and accompanied by the opinion of ________ which report states that
such [consolidated/combined] financial statements are complete and correct
and have been prepared in accordance with GAAP, and fairly present, in all
material respects, the [consolidated/combined] financial position and the
[consolidated/combined] results of operations and cash flows of the
Borrower and its Subsidiaries as at the end of such Fiscal Year and for the
period then ended.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [5.1(a)(i)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
unaudited [consolidated/combined] and [consolidating/combining] balance sheets
of the Borrower and its [consolidated/combined] Subsidiaries as of the end of
the Fiscal Quarter ended ________, ____, and (b) related unaudited
[consolidated/combined] and [consolidating/combining] statements of income, and
cash flows for the portion of the
13
Fiscal Year ending on the last day of such quarter, and certified by [chief
executive officer] [the chief financial officer] [treasurer] [controller] that
such financial statements were prepared in accordance with GAAP (subject only to
normal year-end adjustments and except that footnote and schedule disclosure
may be abbreviated) and fairly present, in all material respects, the
[consolidated/combined] results of operations and cash flows of the Borrower
and its [consolidated/combined] Subsidiaries at the end of such Fiscal Quarter
and for the period then ended.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions
(financial or otherwise) of the Borrower during the accounting period
covered by the attached financial statements.
3. To the best of the undersigned's knowledge, the Borrower, during
such period, has observed, performed or satisfied all of its covenants and
other agreements, and satisfied every condition in the Credit Agreement to
be observed, performed or satisfied by the Borrower, and the undersigned
has no knowledge of any Default or Event of Default.
4. The following financial covenant analyses and information set forth
on Schedule 2 attached hereto are true and accurate on and as of the date
of this Certificate. [There is no difference between making such
calculations on a combined versus a consolidated basis] [The differences
between making such calculations on a combined versus a consolidated basis
is noted on Schedule 3]
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_______________, ________.
Montpelier Re Holdings Ltd.
By: _______________________________
Title: ____________________________
14
SCHEDULE 2
I. Section 6.1 - Leverage Coverage Ratio.
A. Total Debt $
----------------
B. Hedging Obligations $
----------------
C. Consolidated Debt (Item A minus Item B) $
----------------
D. Consolidated Net Worth $
----------------
E. Intangible Assets $
----------------
F. Capitalized Expenses $
----------------
G. Tangible Net Worth (Item D minus E
minus F) $
----------------
H. Item C plus Item G $
----------------
I. Ratio of Item C to Item H %
----------------
ITEM I IS NOT PERMITTED TO EXCEED 30%
II. Section 6.2 - Net Worth.
A. 50% of Positive Consolidated Net Income
for Fiscal Quarter (with no deductions for
net losses) $
----------------
B. Cumulative Positive Consolidated Net
Income for previous Fiscal Quarters (Sum
of Item II B plus Item II A in each case as
shown on the last Compliance Certificate) $
----------------
C. 50% of Net Equity Proceeds since Effective
Date $
----------------
D. Additional Restricted Payments since
Effective Date $
----------------
E. Item A plus Item B plus Item C minus Item
D $
----------------
F. Net Worth as at end of Fiscal Quarter $
----------------
G. Intangible Assets and Capitalized Expenses $
----------------
H. Tangible Net Worth (Item F minus Item G) $
----------------
I. Required Tangible Net Worth
($475,000,000 plus Item B) $
----------------
15
III. Section 6.3 -- Statutory Premiums/Insurance Subsidiary
Net Worth (commencing March 31, 2002).
A. Statutory Net Written Premiums for the
Insurance Subsidiaries for the four Fiscal
Quarters then ended $ ____________
B. Consolidated Insurance Subsidiary Net
Worth for the Insurance Subsidiaries on the
last day of such four Fiscal Quarters then
ended $ ____________
C. Item A divided by Item B _________ :1.0
[ITEM C MUST BE LESS THAN 1.5:1.0]
IV. Section 6.8 -- Unencumbered Assets
A. Fair Market Value of Unencumbered Asset $ ____________
B. Required Amount $400,000,000
V. Section 6.10, Restricted Payments(1)
A. Cumulative Consolidated Net Income from
April 1, 2003 through Fiscal Quarter just
ended. $ ____________
B. 50% of Item A $ ____________
C. Permitted Restricted Payments made since
April 1, 2003 [ITEM C CAN'T EXCEED ITEM B] $ ____________
D. Additional Restricted Payment to be made $ ____________
E. Item D multiplied by 43% $ ____________
F. Debt Capital Refunding to be made $ ____________
VI. Pricing Level
A. Leverage Ratio (from Item I.I.) ____________ %
B. Applicable Pricing Level $ ____________
Attached hereto is a list of all Invested Assets of the Borrower and its
Subsidiaries specifying CUSIP, name of investment and market value, par value,
cost, coupon and
______________
(1) Items I, II and III and V to be included only in Compliance Certificate
given pursuant to Section 6.10.
16
rating, as applicable, indicating the category of Permitted Investment, if
applicable and showing compliance with Section 5.9.
17
