LOAN AGREEMENT ($200,000,000 REVOLVING LOAN FACILITY) dated as of November 24, 2004 AMONG HCC INSURANCE HOLDINGS, INC. as Borrower, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger and as a Lender, WACHOVIA BANK,...
Exhibit 10.1
($200,000,000 REVOLVING LOAN FACILITY)
dated as of November 24, 2004
AMONG
HCC INSURANCE HOLDINGS, INC.
as Borrower,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Lead Arranger and as a Lender,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndications Agent and as a Lender,
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
TABLE OF CONTENTS
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1. Definitions |
1 | |||
1.1 Certain Defined Terms |
1 | |||
1.2 Miscellaneous |
16 | |||
2. Commitments and Loans |
16 | |||
2.1 Loans |
16 | |||
2.2 Terminations or Reductions of Commitments |
18 | |||
2.3 Commitment Fees |
18 | |||
2.4 Several Obligations |
18 | |||
2.5 Notes |
19 | |||
2.6 Use of Proceeds |
19 | |||
2.7 Letters of Credit |
19 | |||
3. Borrowings, Payments, Prepayments and Interest Options |
22 | |||
3.1 Borrowings |
22 | |||
3.2 Prepayments |
23 | |||
3.3 Interest Options |
24 | |||
3.4 Capital Adequacy |
27 | |||
3.5 Limitation on Charges; Substitute Lenders; Non-Discrimination |
28 | |||
4. Payments;
Pro Rata Treatment; Computations, Etc. |
29 | |||
4.1 Payments |
29 | |||
4.2 Pro Rata Treatment |
30 | |||
4.3 Certain Actions, Notices, Etc |
30 | |||
4.4 Non-Receipt of Funds by Agent |
31 | |||
4.5 Sharing of Payments, Etc |
32 | |||
5. Conditions Precedent |
32 | |||
5.1 Initial Loans and Letters of Credit |
32 | |||
5.2 All Loans |
34 | |||
6. Representations and Warranties |
34 | |||
6.1 Organization |
35 | |||
6.2 Financial Statements |
35 | |||
6.3 Enforceable Obligations; Authorization |
35 | |||
6.4 Other Debt |
35 | |||
6.5 Litigation |
35 | |||
6.6 Title |
36 | |||
6.7 Taxes |
36 | |||
6.8 Regulations U and X |
36 | |||
6.9 Subsidiaries |
36 | |||
6.10 No Untrue or Misleading Statements |
36 | |||
6.11 ERISA |
36 | |||
6.12 Investment Company Act |
36 | |||
6.13 Public Utility Holding Company Act |
37 | |||
6.14 Solvency |
37 | |||
6.15 Fiscal Year |
37 |
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6.16 Compliance |
37 | |||
6.17 Environmental Matters |
37 | |||
6.18 Property and Earnings of Material Subsidiaries |
37 | |||
7. Affirmative Covenants |
38 | |||
7.1 Taxes, Existence, Regulations, Property, Etc |
38 | |||
7.2 Financial Statements and Information |
38 | |||
7.3 Financial Tests |
39 | |||
7.4 Inspection |
39 | |||
7.5 Further Assurances |
40 | |||
7.6 Books and Records |
40 | |||
7.7 Insurance |
40 | |||
7.8 Notice of Certain Matters |
40 | |||
7.9 ERISA Information and Compliance |
41 | |||
8. Negative Covenants |
42 | |||
8.1 Borrowed Money Indebtedness |
42 | |||
8.2 Liens |
42 | |||
8.3 Contingent Liabilities |
44 | |||
8.4 Mergers and Consolidations |
44 | |||
8.5 Redemption, Dividends and Distributions |
44 | |||
8.6 Nature of Business |
45 | |||
8.7 Transactions with Related Parties |
45 | |||
8.8 Loans and Investments |
45 | |||
8.9 Organizational Documents |
45 | |||
8.10 Unfunded Liabilities |
45 | |||
8.11 Intentionally Left Blank |
45 | |||
8.12 Subsidiaries |
45 | |||
8.13 Property and Earnings of Material Subsidiaries |
46 | |||
9. Defaults |
46 | |||
9.1 Events of Default |
46 | |||
9.2 Right of Setoff |
48 | |||
9.3 Collateral Account |
49 | |||
9.4 Preservation of Security for Unmatured Reimbursement Obligations |
49 | |||
9.5 Remedies Cumulative |
49 | |||
10. Agent |
50 | |||
10.1 Appointment, Powers and Immunities |
50 | |||
10.2 Reliance |
51 | |||
10.3 Defaults |
51 | |||
10.4 Material Written Notices |
51 | |||
10.5 Rights as a Lender |
51 | |||
10.6 Indemnification |
52 | |||
10.7 Non-Reliance on Agent and Other Lenders |
52 | |||
10.8 Failure to Act |
52 | |||
10.9 Resignation or Removal of Agent |
53 | |||
10.10 No Partnership |
53 | |||
10.11 No Waiver |
53 |
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10.12 Syndications Agent |
53 | |||
11. Miscellaneous |
54 | |||
11.1 Waiver |
54 | |||
11.2 Notices |
54 | |||
11.3 Expenses, Etc |
55 | |||
11.4 Indemnification |
56 | |||
11.5 Amendments, Etc |
56 | |||
11.6 Successors and Assigns |
57 | |||
11.7 Limitation of Interest |
59 | |||
11.8 Survival |
60 | |||
11.9 Captions |
60 | |||
11.10 Counterparts |
60 | |||
11.11 Governing Law |
60 | |||
11.12 Severability |
60 | |||
11.13 Tax Forms |
60 | |||
11.14 Venue |
61 | |||
11.15 Jury Waiver |
61 | |||
11.16 Conflicts Between This Agreement and the Other Loan Documents |
61 | |||
11.17 Disclosure to Other Persons; Confidentiality |
61 | |||
11.18 USA Patriot Act |
62 | |||
11.19 Amendment and Restatement; Renewal Notes |
63 |
EXHIBITS
A — Request for Extension of Credit
B — Rate Designation Notice
C — Note
D — Assignment and Acceptance
E — Compliance Certificate
F — Subsidiaries as of the Effective Date
G — Existing Borrowed Money Indebtedness
H — Existing Liens
SCHEDULES
I – Commitments
II – Agency Subsidiaries
III – Insurance Company Subsidiaries
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THIS LOAN AGREEMENT is made and entered into as of November 24, 2004, by and among HCC INSURANCE HOLDINGS, INC., a Delaware corporation (together with its permitted successors, herein called the “Borrower”); each of the lenders which is or may from time to time become a party hereto (individually, a “Lender” and, collectively, the “Lenders”), XXXXX FARGO BANK, NATIONAL ASSOCIATION (“Xxxxx Fargo”), a national banking association, as Administrative Agent for the Lenders and Lead Arranger (in such capacity, together with its successors in such capacity, the “Agent”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndications Agent.
The parties hereto agree as follows:
Unless a particular term, word or phrase is otherwise defined or the context otherwise requires, capitalized terms, words and phrases used herein or in the Loan Documents (as hereinafter defined) have the following meanings (all definitions that are defined in this Agreement in the singular have the same meanings when used in the plural and vice versa):
Accounts, General Intangibles and Inventory shall have the respective meanings assigned to them in the Uniform Commercial Code enacted in the State of Texas in force on the Effective Date.
Additional Interest means the aggregate of all amounts accrued or paid pursuant to the Notes or any of the other Loan Documents (other than interest on the Notes at the Stated Rate) which, under applicable laws, are or may be deemed to constitute interest on the indebtedness evidenced by the Notes.
Adjusted LIBOR means, with respect to each Interest Period applicable to a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a percentage, of (a) LIBOR with respect to such Interest Period divided by (b) 1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of such Interest Period.
Affiliate means any Person controlling, controlled by or under common control with any other Person. For purposes of this definition, “control” (including “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or otherwise.
Agency Subsidiaries means the Subsidiaries listed on Schedule II hereto and such other Subsidiaries which are not direct or indirect Subsidiaries of another Agency Subsidiary or an Insurance Company Subsidiary and which are engaged primarily in the same businesses as the entities listed on Schedule II hereto as Borrower may from time to time designate as an “Agency Subsidiary” by giving Agent written notice thereof and by executing and delivering to Agent
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such Security Agreements, Guaranties, stock certificates, stock powers, authorization documentation, legal opinions and other items as Agent may reasonably request, each in Proper Form and duly executed and delivered, in order to ensure that a Default shall not occur under the provisions of Sections 9.1(j) or (l) hereof. Borrower may at any time cause any of the above listed entities to no longer be characterized as an “Agency Subsidiary” so long as no Event of Default has occurred which is continuing and so long as such change in characterization does not result in any Default or Event of Default (and in the event any Person ceases to be an “Agency Subsidiary” as above provided, such Person’s Guaranty (if any) shall be promptly released by Agent and the equity interests in and to such Person shall be promptly released by Agent from the Liens of each Security Document covering such equity interests and the certificates evidencing such equity interests shall be promptly delivered to Borrower by Agent).
Agreement means this Loan Agreement, as it may from time to time be amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial statements of a Person, including all notes thereto, which statements shall include a balance sheet as of the end of such fiscal year and an income statement and a statement of cash flows for such fiscal year, all setting forth in comparative form the corresponding figures from the previous fiscal year, all prepared in conformity with GAAP in all material respects, and accompanied by the unqualified opinion of independent certified public accountants of recognized national standing, which shall state that such financial statements present fairly in all material respects the financial position of such Person and, if such Person has any Subsidiaries, its consolidated Subsidiaries as of the date thereof and the results of its operations for the period covered thereby in conformity with GAAP or, as applicable, statutory financial standards.
Applications means all applications and agreements for Letters of Credit, or similar instruments or agreements, in Proper Form, now or hereafter executed by any Person in connection with any Letter of Credit now or hereafter issued or to be issued under the terms hereof at the request of any Person. To the extent that any Application contains provisions granting liens or security interests not granted in the Loan Agreement or contains events of default waivers, and cure periods (or fails to provide cure periods as provided in the Loan Agreement) which are more restrictive than those contained in the Loan Agreement, the provisions of the Loan Agreement shall control.
Assignment and Acceptance shall have the meaning ascribed to such term in Section 11.6 hereof.
Bankruptcy Code means the United States Bankruptcy Code, as amended, and any successor statute.
Base Rate means for any day a rate per annum equal to the lesser of (a) the greater of (1) the Prime Rate for that day or (2) the Federal Funds Rate for that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason Agent shall have determined (which determination shall create a rebuttable presumption as to the accuracy thereof) that it is unable to ascertain the Federal Funds Rate for any reason, including, without limitation, the inability or failure of Agent to obtain sufficient quotations in accordance with the terms hereof (and in such event, Agent shall furnish written evidence to Borrower showing how Agent made such determination), the Base Rate
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shall, until the circumstances giving rise to such inability no longer exist, be the lesser of (a) the Prime Rate or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to Property purchased by such Person, (iv) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding obligations of such Person to creditors for raw materials, inventory, services and supplies and deferred payments for services to employees and former employees incurred in the ordinary course of such Person’s business), (v) all capital lease obligations of such Person, (vi) all obligations of others secured by any lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vii) Interest Rate Risk Indebtedness of such Person (to the extent treated as Indebtedness under GAAP), (viii) all obligations of such Person in respect of outstanding letters of credit issued for the account of such Person (whether or not drawn and in the stated amount thereof), exclusive of letters of credit which are fully secured by cash or marketable securities, (ix) that portion (if any) of any convertible preferred or trust preferred securities issued by Borrower which is recognized by Standard & Poor’s as indebtedness and (x) all guarantees of such Person of any of the foregoing.
Business Day means any day other than a day on which commercial banks are authorized or required to close in Houston, Texas, New York City, New York or Denver, Colorado. A separate definition of “LIBOR Business Day” applies to LIBOR Borrowings under this Agreement.
Capital Expenditures means, with respect to any Person for any period, expenditures in respect of fixed or capital assets by such Person, including capital lease obligations incurred during such period (to the extent not already included), which would be reflected as additions to Property, plant or equipment on a balance sheet of such Person and its consolidated Subsidiaries, if any, prepared in accordance with GAAP; but excluding expenditures during such period for the repair or replacement of any fixed or capital asset which was destroyed or damaged, in whole or in part, to the extent financed by the proceeds of an insurance policy maintained by such Person. Capital Expenditures shall not include Permitted Investments or the assets owned by any Person acquired by way of a Permitted Investment or assets comprising substantially all of an entire business which is acquired by the applicable Person.
Cash Flow Coverage Ratio means, as of the end of any fiscal year, the ratio of (a) the sum of the maximum aggregate dividends that the insurance company Subsidiaries of Borrower are permitted by applicable regulatory authorities to pay to Borrower in the applicable fiscal year plus all cash dividends received by Borrower from agency operations of Subsidiaries of Borrower in the applicable fiscal year plus Interest Expense paid by a Subsidiary of Borrower to Borrower for the applicable fiscal year plus principal payments made by a Subsidiary of Borrower to Borrower for the applicable fiscal year to (b) the sum of Interest Expense of Borrower and its Subsidiaries for the applicable fiscal year plus scheduled principal payments
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paid or payable by Borrower and its Subsidiaries for the applicable fiscal year plus dividends paid by Borrower to its shareholders for the applicable fiscal year.
Ceiling Rate means, on any day, the maximum nonusurious rate of interest permitted for that day by whichever of applicable federal or Texas (or any jurisdiction whose usury laws are deemed to apply to the Notes or any other Loan Documents despite the intention and desire of the parties to apply the usury laws of the State of Texas) laws permits the higher interest rate, stated as a rate per annum. On each day, if any, that the Texas Finance Code establishes the Ceiling Rate, the Ceiling Rate shall be the “weekly ceiling” (as defined in §303 of the Texas Finance Code) for that day. Agent may from time to time, as to current and future balances, implement any other ceiling under the Texas Finance Code by notice to Borrower, if and to the extent permitted by the Texas Finance Code. Without notice to Borrower or any other person or entity, the Ceiling Rate shall automatically fluctuate upward and downward as and in the amount by which such maximum nonusurious rate of interest permitted by applicable law fluctuates.
Change of Control means a change resulting when any Unrelated Person or any Unrelated Persons acting together which would constitute a Group together with any Affiliates or Related Persons thereof (in each case also constituting Unrelated Persons) shall at any time either (i) Beneficially Own more than 50% of the aggregate voting power of all classes of Voting Stock of Borrower or (ii) succeed in having sufficient of its or their nominees elected to the Board of Directors of Borrower such that such nominees, when added to any existing directors remaining on the Board of Directors of Borrower after such election who is an Affiliate or Related Person of such Person or Group, shall constitute a majority of the Board of Directors of Borrower. As used herein (a) “Beneficially Own” means “beneficially own” as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, or any successor provision thereto; provided, however, that, for purposes of this definition, a Person shall not be deemed to Beneficially Own securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates until such tendered securities are accepted for purchase or exchange; (b) “Group” means a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; (c) “Unrelated Person” means at any time any Person other than Borrower or any Subsidiary of Borrower and other than any trust for any employee benefit plan of Borrower or any Subsidiary of Borrower; (d) “Related Person” of any Person shall mean any other Person owning (1) 5% or more of the outstanding common stock of such Person or (2) 5% or more of the Voting Stock of such Person; and (e) “Voting Stock” of any Person shall mean capital stock of such Person which ordinarily has voting power for the election of directors (or persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency.
Code means the Internal Revenue Code of 1986, as amended, as now or hereafter in effect, together with all regulations, rulings and interpretations thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal or mixed, now or hereafter subject to the Security Documents.
Combined Ratio means, for any period, the sum of the Loss Ratio for such period plus the Expense Ratio for such period, determined on a statutory accounting basis.
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Commitment means, as to any Lender, the obligation, if any, of such Lender to make Loans and incur or participate in Letter of Credit Liabilities in an aggregate principal amount at any one time outstanding up to (but not exceeding) the amount, if any, set forth on Schedule I hereto, or otherwise provided for in an Assignment and Acceptance Agreement (as the same may be reduced from time to time pursuant to Section 2.2 hereof).
Compliance Certificate shall have the meaning given to it in Section 7.2 hereof.
Controlled Group means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Borrower, are treated as a single employer under Section 414 of the Code.
Corporation means any corporation, limited liability company, partnership, joint venture, joint stock association, business trust and other business entity.
Cover for Letter of Credit Liabilities shall be effected by paying to Agent immediately available funds, to be held by Agent in a collateral account maintained by Agent at its Principal Office and collaterally assigned as security for the financial accommodations extended pursuant to this Agreement using documentation reasonably satisfactory to Agent, in the amount required by any applicable provision hereof. Such amount shall be retained by Agent in such collateral account until such time as the applicable Letter of Credit shall have expired and the Reimbursement Obligations, if any, with respect thereto shall have been fully satisfied or such Cover is no longer required by the terms of this Agreement; provided, however, that at such time if a Default or Event of Default has occurred and is continuing, Agent shall not be required to release such amount in such collateral account until such Default or Event of Default shall have been cured or waived.
Debt to Capitalization Ratio means, as of the end of any fiscal quarter, the ratio of (a) Indebtedness as of such date to (b) the sum of Indebtedness as of such date plus Shareholder’s Equity as of such date.
Default means an Event of Default or an event which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.
Dollars and $ means lawful money of the United States of America.
Effective Date means November 24, 2004.
Environmental Claim means any third party (including Governmental Authorities and employees) action, lawsuit, claim or proceeding (including claims or proceedings at common law or under the Occupational Safety and Health Act or similar laws relating to safety of employees) which seeks to impose liability for (i) noise; (ii) pollution or contamination of the air, surface water, ground water or land or the clean-up of such pollution or contamination; (iii) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation; (iv) exposure to Hazardous Substances; (v) the safety or health of employees or (vi) the manufacture, processing, distribution in commerce or use of Hazardous Substances. An “Environmental Claim” includes, but is not limited to, a common law action, as well as a proceeding to issue, modify or terminate an Environmental Permit, or to adopt or amend a regulation to the extent
5
that such a proceeding attempts to redress violations of an applicable permit, license, or regulation as alleged by any Governmental Authority.
Environmental Liabilities includes all liabilities arising from any Environmental Claim, Environmental Permit or Requirement of Environmental Law under any theory of recovery, at law or in equity, and whether based on negligence, strict liability or otherwise, including but not limited to: remedial, removal, response, abatement, investigative, monitoring, personal injury and damage to property or injuries to persons, and any other related costs, expenses, losses, damages, penalties, fines, liabilities and obligations, and all costs and expenses necessary to cause the issuance, reissuance or renewal of any Environmental Permit including reasonable attorneys’ fees and court costs.
Environmental Permit means any permit, license, approval or other authorization under any applicable Legal Requirement relating to pollution or protection of health or the environment, including laws, regulations or other requirements relating to emissions, discharges, releases or threatened releases of pollutants, contaminants or hazardous substances or toxic materials or wastes into ambient air, surface water, ground water or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants or Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules, regulations, rulings and interpretations adopted by the Internal Revenue Service or the U.S. Department of Labor thereunder.
Eurodollar Rate means for any day during an Interest Period for a LIBOR Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the Margin Percentage from time to time in effect or (b) the Ceiling Rate. Each Eurodollar Rate is subject to adjustments for reserves, insurance assessments and other matters as provided for in Section 3.3 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage (expressed as a decimal fraction and rounded, if necessary, to the next highest one ten thousandth [.0001]) which is in effect on such day for determining all reserve requirements (including, without limitation, basic, supplemental, marginal and emergency reserves) applicable to “Eurocurrency liabilities,” as currently defined in Regulation D. Each determination of the Eurodollar Reserve Requirement by Agent shall create a rebuttable presumption as to the accuracy thereof, and may be computed using any reasonable averaging and attribution method.
Event of Default shall have the meaning assigned to it in Section 9 hereof.
Expense Ratio means, for any period, the ratio of (a) Statutory Net Operating Expenses for the 12 months ending on the last day of the immediately preceding calendar quarter to (b) Statutory Net Written Premiums for the 12 months ending on the last day of the immediately preceding calendar quarter, tested at the end of each calendar quarter.
Federal Funds Rate means, for any day, a fluctuating interest rate per annum equal for such day to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for
6
such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any such day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal funds brokers of recognized standing selected by Agent in its sole and absolute discretion.
Financing Statements means all such Uniform Commercial Code financing statements as Agent shall reasonably require, in Proper Form, duly executed by Borrower (or any other applicable Obligor) to give notice of and to perfect or continue perfection of Agent’s Liens in any applicable Collateral, as any of the foregoing may from time to time be amended, modified, supplemented or restated.
Foreign Subsidiaries means Subsidiaries which are organized under the laws of a jurisdiction other than the United States of America, any State of the United States or any political subdivision thereof.
Funding Loss means, with respect to (a) Borrower’s payment of principal of a LIBOR Borrowing on a day other than the last day of the applicable Interest Period; (b) Borrower’s failure to borrow a LIBOR Borrowing on the date specified by Borrower; (c) Borrower’s failure to make any prepayment of the Loans (other than Base Rate Borrowings) on the date specified by Borrower, or (d) any cessation of a Eurodollar Rate to apply to the Loans or any part thereof pursuant to Section 3.3, in each case whether voluntary or involuntary, any loss, expense, penalty, premium or liability actually incurred by any Lender (including but not limited to any actual loss or reasonable expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain a Loan), but excluding loss of margin or profit for the period after such payment or failure to borrow or prepay and excluding losses resulting from the gross negligence or willful misconduct of the applicable Lender.
GAAP means, as to a particular Person, such accounting practice as, in the opinion of independent certified public accountants of recognized national standing regularly retained by such Person, conforms at the time to generally accepted accounting principles, consistently applied for all periods after the Effective Date so as to present fairly the financial condition, and results of operations and cash flows, of such Person. If any change in any accounting principle or practice is required by the Financial Accounting Standards Board, all reports and financial statements required hereunder may be prepared in accordance with such change so long as Borrower provides to Agent such disclosures of the impact of such change as Agent may reasonably require. No such change in any accounting principle or practice shall, in itself, cause a Default or Event of Default hereunder (but Borrower, Agent and Lenders shall negotiate in good faith to replace any financial covenants hereunder to the extent such financial covenants are affected by such change in accounting principle or practice).
Governmental Authority means any foreign governmental authority, the United States of America, any State of the United States, and any political subdivision of any of the foregoing, and any central bank, agency, department, commission, board, bureau, court or other tribunal having jurisdiction over Agent, any Lender, any Obligor or their respective Property.
Guaranties means, collectively, (i) the Guaranties dated on or prior to the date of hereof executed by each of the current Agency Subsidiaries of Borrower which is not a Foreign
7
Subsidiary in favor of Agent, for the benefit of Lenders, and (ii) any and all other guaranties hereafter executed in favor of Agent, for the benefit of Lenders, relating to the Obligations, as any of them may from time to time be amended, modified, restated or supplemented.
Hazardous Substance means petroleum products, and any hazardous or toxic waste or substance defined or regulated as such from time to time by any law, rule, regulation or order described in the definition of “Requirements of Environmental Law”.
Indebtedness means, for any Person, (i) all obligations of such Person for Borrowed Money Indebtedness (or which has been incurred in connection with the acquisition of property) and (ii) preferred stock having a mandatory redemption prior to the maturity of the Revolving Loan Obligations.
Index Debt means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.
Insurance Company Subsidiaries means the Subsidiaries listed on Schedule III hereto and such other Subsidiaries which are not direct or indirect Subsidiaries of another Insurance Company Subsidiary or an Agency Subsidiary and which are engaged primarily in the same businesses as the entities listed on Schedule III hereto as Borrower may from time to time designate as an “Insurance Company Subsidiary” by giving Agent written notice thereof and by executing and delivering to Agent such Security Agreements, stock certificates, stock powers, authorization documentation, legal opinions and other items as Agent may reasonably request, each in Proper Form and duly executed and delivered, in order to ensure that a Default shall not occur under the provisions of Sections 9.1(j) or (l) hereof. Borrower may at any time cause any of the above listed entities to no longer be characterized as an “Insurance Company Subsidiary” so long as no Event of Default has occurred which is continuing and so long as such change in characterization does not result in any Default or Event of Default (and in the event any Person ceases to be an “Insurance Company Subsidiary” as above provided, the equity interests in and to such Person shall be promptly released by Agent from the Liens of each Security Document covering such equity interests and the certificates evidencing such equity interests shall be promptly delivered to Borrower by Agent).
Interest Expense means, for any Person, the sum of (i) all interest on Indebtedness paid or due and payable (including the portion of rents payable under capital leases allocable to interest) plus (ii) all debt discount and expense amortized or required to be amortized during such period.
Interest Options means the Base Rate and each Eurodollar Rate, and “Interest Option” means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings, December 31, 2004 and the last Business Day of each March, June, September and December thereafter prior to the Revolving Loan Maturity Date, and the Revolving Loan Maturity Date and (b) for LIBOR Borrowings, the end of the applicable Interest Period (and if such Interest Period exceeds three months’ duration, quarterly, commencing on the first quarterly anniversary of the first day of such Interest Period), and the Revolving Loan Maturity Date.
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Interest Period means, for each LIBOR Borrowing, a period commencing on the date such LIBOR Borrowing began and ending on the numerically corresponding day which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2, 3, 6 or 12 months thereafter, as Borrower shall elect in accordance herewith; provided, (1) unless Agent shall otherwise consent, no Interest Period with respect to a LIBOR Borrowing shall commence on a date earlier than three (3) Business Days after this Agreement shall have been fully executed; (2) any Interest Period with respect to a LIBOR Borrowing which would otherwise end on a day which is not a LIBOR Business Day shall be extended to the next succeeding LIBOR Business Day, unless such LIBOR Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding LIBOR Business Day; (3) any Interest Period with respect to a LIBOR Borrowing which begins on the last LIBOR 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 LIBOR Business Day of the appropriate calendar month; (4) no Interest Period for a Loan shall ever extend beyond the Revolving Loan Maturity Date, and (5) Interest Periods shall be selected by Borrower in such a manner that the Interest Period with respect to any portion of the Loans which shall become due shall not extend beyond such due date.
Interest Rate Risk Agreement means an interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or similar arrangement entered into by Borrower for the purpose of reducing Borrower’s exposure to interest rate fluctuations and not for speculative purposes, approved in writing by Agent (such approval not to be unreasonably withheld), as it may from time to time be amended, modified, restated or supplemented.
Interest Rate Risk Indebtedness means all obligations and Indebtedness of Borrower with respect to the program for the hedging of interest rate risk provided for in any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities or Indebtedness of, or the making of any loan, advance, transfer of Property (other than transfers in the ordinary course of business) or capital contribution to, or the incurring of any liability (other than trade accounts payable arising in the ordinary course of business), contingently or otherwise, in respect of the Indebtedness of, any Person; provided, however, that the purchase by Borrower or any of its Subsidiaries of any Indebtedness of Borrower or any of its Subsidiaries for the purpose of retiring such Indebtedness shall not be deemed to be an Investment.
Issuer means the issuer (or, where applicable, each issuer) of a Letter of Credit under this Agreement.
Legal Requirement means any law, statute, ordinance, decree, requirement, order, judgment, rule, or regulation (or interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, whether presently existing or arising in the future.
Letter of Credit shall have the meaning assigned to such term in Section 2.7 hereof.
Letter of Credit Liabilities means, at any time and in respect of any Letter of Credit, the sum of (i) the amount available for drawings under such Letter of Credit plus (ii) the aggregate
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unpaid amount of all Reimbursement Obligations at the time due and payable in respect of previous drawings made under such Letter of Credit.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or if such Telerate Page shall not be available, any successor or similar service as may be selected by Agent and Borrower as the London interbank rate for deposits in United States dollars) as of 11:00 London time (or as soon thereafter as practicable) on the day two LIBOR Business Days prior to the first day of such Interest Period for deposits in United States dollars having a term comparable to such Interest Period and in an amount comparable to the principal amount of the LIBOR Borrowing to which such Interest Period relates. If none of such Telerate Page 3750 nor any successor or similar service is available, then “LIBOR” shall mean, with respect to any Interest Period for any applicable LIBOR Borrowing, the rate of interest per annum, rounded upwards, if necessary, to the nearest 1/100th of 1%, quoted by Agent at or before 11:00 London time (or as soon thereafter as practicable), on the date two LIBOR Business Days before the first day of such Interest Period, to be the arithmetic average of the prevailing rates per annum at the time of determination and in accordance with the then existing practice in the applicable market, for the offering to Agent by one or more prime banks selected by Agent in its sole discretion, in the London interbank market, of deposits in United States dollars for delivery on the first day of such Interest Period and having a maturity equal to the length of such Interest Period and in an amount equal (or as nearly equal as may be) to the LIBOR Borrowing to which such Interest Period relates. Each determination by Agent of LIBOR shall create a rebuttable presumption as to the accuracy thereof, and may be computed using any reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the Loans at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in United States dollar deposits between lenders may be carried on in the London interbank market.
Lien means any mortgage, pledge, charge, encumbrance, security interest, collateral assignment or other lien or restriction of any kind, whether based on common law, constitutional provision, statute or contract, and shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions and other title exceptions.
Loans means the loans provided for by Section 2.1 hereof.
Loan Documents means, collectively, this Agreement, the Guaranties, the Security Documents, the Notes, all Applications, the Notice of Entire Agreement, all instruments, certificates and agreements now or hereafter executed or delivered by any Obligor to Agent or any Lender pursuant to any of the foregoing or in connection with the Obligations or any commitment regarding the Obligations, and all amendments, modifications, renewals, extensions, increases and rearrangements of, and substitutions for, any of the foregoing.
Loss and Loss Adjustment Expenses means the total of all claims incurred by an insurance or reinsurance company under a policy or policies, whether paid or unpaid (including a provision for claims that have occurred but have not yet been reported to the insurer or reinsurer)
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and the total expense of settling claims, including legal and other fees and the portion of general expense allocated to claim settlement costs, as determined in accordance with statutory accounting standards.
Loss Ratio means, for any period, the ratio of (a) the sum of Loss and Loss Adjustment Expenses for the 12 months ending on the last day of the immediately preceding calendar quarter to (b) Net Earned Premiums for the 12 months ending on the last day of the immediately preceding calendar quarter, tested at the end of each calendar quarter.
Majority Lenders means two or more Lenders having greater than 51% of the Commitments or, if the Commitments are terminated, two or more Lenders having greater than 51% of the outstanding Loans.
Margin Percentage means, on any day, the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based upon the ratings by S&P applicable on such date to the Index Debt:
Index Debt | ||||
Rating |
Margin Percentage |
|||
A or higher |
0.75 | |||
A- or lower |
1.00 |
For purposes of the foregoing, (i) if S&P shall not have in effect a rating for the Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then S&P shall be deemed to have established a rating of A- or lower and (ii) if the ratings established or deemed to have been established by S&P for the Index Debt shall be changed (other than as a result of a change in the rating system of S&P), such change shall be effective as of the date on which it is first announced by S&P, irrespective of when notice of such change shall have been furnished by the Borrower to the Agent and the Lenders pursuant to this Agreement or otherwise. Each change in the Margin Percentage shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of S&P shall change, or if S&P shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from S&P and, pending the effectiveness of any such amendment, the Margin Percentage shall be determined by reference to the rating most recently in effect prior to such change or cessation.
Material Adverse Effect means relative to any occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding), resulting in (i) a material adverse effect on the financial condition, business, operations, or assets of Borrower and its Subsidiaries, on a consolidated basis, from those reflected in the financial statements furnished to Agent referred to in Section 6.2 hereof or from the facts represented or warranted in this Agreement or any other Loan Document, (ii) a material impairment of the ability of Borrower and its Subsidiaries, on a consolidated basis, to perform their obligations under the Loan Documents or (iii) a material impairment of the validity or
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enforceability of the Loan Documents the result of which is a material adverse effect on the ability of Lenders to collect the Obligations when due.
Material Subsidiaries means the Insurance Company Subsidiaries and the Agency Subsidiaries.
Net Earned Premiums means the portion of Net Written Premiums during or prior to a given period which is actually earned during such period.
Net Written Premiums means the total of all premiums received or to be received for insurance underwritten and reinsurance assumed during a given period less the total premium paid or to be paid for reinsurance ceded to others during such period, as determined in accordance with statutory accounting standards.
Newly Acquired Subsidiaries means, as of any date, any Subsidiary formed, created or acquired within forty-five (45) days prior to such date.
Notes means the promissory notes of Borrower evidencing the Loans, in the form of Exhibit C hereto, together with all renewals, extensions, modifications, amendments, increases and/or and replacements thereof and substitutions therefor.
Notice of Entire Agreement means a notice of entire agreement, in Proper Form, executed by Borrower and Agent, as the same may from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of the following: (i) the aggregate principal amount of Loans outstanding hereunder on such date, plus (ii) the aggregate amount of the outstanding Letter of Credit Liabilities hereunder on such date, plus (iii) all other outstanding liabilities, obligations and indebtedness of any Obligor under any Loan Document on such date.
Obligors means Borrower, the Insurance Company Subsidiaries and each other Subsidiary of Borrower which is a party to any Guaranty or Security Agreement.
Organizational Documents means, with respect to a corporation, the certificate of incorporation, articles of incorporation and bylaws of such corporation; with respect to a partnership, the partnership agreement establishing such partnership and with respect to a trust, the instrument establishing such trust; in each case including any and all modifications thereof as of the date of the Loan Document referring to such Organizational Document and any and all future modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the lesser of (i) the Ceiling Rate for that day or (ii) the Base Rate plus three percent (3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
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Permitted Dividends means (i) dividends or distributions by a Subsidiary of Borrower to Borrower (or to another Subsidiary of Borrower) or redemption by a Subsidiary of any of its stock held by Borrower (or by another Subsidiary of Borrower), (ii) dividends paid in stock and stock splits and (iii) so long as no Default or Event of Default shall have occurred and be continuing (or would result therefrom), dividends or distributions by Borrower not exceeding, in the aggregate in any applicable fiscal year, the greater of (x) $50,000,000 or (y) 33% of the net income of Borrower for the immediately preceding fiscal year. The dividends and distributions otherwise permitted under this definition shall be subject to the provisions of Section 8.13 hereof.
Permitted Investment means Investments permitted under the terms of Section 8.8 hereof.
Permitted Liens means Liens permitted under the provisions of Section 8.2 hereof.
Person means any individual, Corporation, trust, unincorporated organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either (a) maintained by Borrower or any member of the Controlled Group for employees of Borrower or any member of the Controlled Group or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which Borrower or any member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
Prime Rate means, on any day, the prime rate for that day as determined from time to time by Xxxxx Fargo at its principal office in Denver, Colorado. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate or a favored rate, and Xxxxx Fargo, Agent and each Lender disclaims any statement, representation or warranty to the contrary. Xxxxx Fargo, Agent or any Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.
Principal Office means 0000 Xxxxxxx Xxx., XXX X0000-000, Xxxxxx, Xxxxxxxx 00000.
Proper Form means in form reasonably satisfactory to Agent.
Property means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.
Quarterly Dates means the last Business Day of each March, June, September and December.
Quarterly Financial Statements means the quarterly financial statements of a Person, which statements shall include a balance sheet as of the end of such fiscal quarter, an income statement for the period ended on such fiscal quarter and for the fiscal year to date and a statement of cash flows for the fiscal year to date, subject to normal year-end adjustments, prepared in accordance with GAAP in all material respects except that such statements are condensed and exclude detailed footnote disclosures and certified by the chief financial officer or
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other authorized officer of such Person as fairly presenting, in all material respects, the financial position of such person as of such date.
Rate Designation Date means that Business Day which is (a) in the case of Base Rate Borrowings, 11:00 a.m., Houston, Texas time, on the date of such borrowing and (b) in the case of LIBOR Borrowings, 11:00 a.m., Houston, Texas time, on the date three LIBOR Business Days preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the form of Exhibit B.
Regulation D means Regulation D of the Board of Governors of the Federal Reserve System from time to time in effect and includes any successor or other regulation relating to reserve requirements applicable to member banks of the Federal Reserve System.
Regulatory Change means with respect to any Lender, any change on or after the date of this Agreement in any Legal Requirement (including, without limitation, Regulation D) or the adoption or making on or after such date of any interpretation, directive or request applying to a class of lenders including such Lender under any Legal Requirements (whether or not having the force of law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, the obligations of Borrower then outstanding, or which may thereafter arise, in respect of Letters of Credit under this Agreement, to reimburse the applicable Issuers for the amount paid by such Issuers in respect of any drawing under such Letters of Credit, which obligations shall at all times be payable in Dollars notwithstanding any such Letter of Credit being payable in a currency other than Dollars.
Request for Extension of Credit means a request for extension of credit duly executed by the chief executive officer, president, chief financial officer, any vice president or treasurer of Borrower or any other officer of Borrower duly authorized in writing by Borrower, appropriately completed and substantially in the form of Exhibit A attached hereto.
Requirements of Environmental Law means all requirements imposed by any law (including for example and without limitation The Resource Conservation and Recovery Act and The Comprehensive Environmental Response, Compensation, and Liability Act), rule, regulation, or order of any federal, state or local executive, legislative, judicial, regulatory or administrative agency, board or authority in effect at the applicable time which relate to (i) noise; (ii) pollution, protection or clean-up of the air, surface water, ground water or land; (iii) solid, gaseous or liquid waste generation, treatment, storage, disposal or transportation; (iv) exposure to Hazardous Substances; (v) the safety or health of employees or (vi) regulation of the manufacture, processing, distribution in commerce, use, discharge or storage of Hazardous Substances.
Revolving Loan shall mean a Loan made pursuant to Section 2.1(a) hereof.
Revolving Loan Availability Period means, for each Revolving Loan Lender, the period from and including the Effective Date to (but not including) the Revolving Loan Termination Date.
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Revolving Loan Commitment Percentage means, as to any Revolving Loan Lender, the percentage equivalent of a fraction the numerator of which is the amount of such Lender’s Commitment (or if the Commitments have terminated, such Lender’s outstanding Loans) and the denominator of which is the aggregate amount of the Commitments of all Lenders (or if the Commitments have terminated, the aggregate amount of all Loans).
Revolving Loan Lender means each Lender with (i) prior to the Revolving Loan Termination Date, a Commitment and (ii) on and after the Revolving Loan Termination Date, any outstanding Revolving Loan Obligations.
Revolving Loan Maturity Date means the maturity of the Notes, November 30, 2009.
Revolving Loan Obligations means, as at any date of determination thereof, the sum of the following (determined without duplication): (i) the aggregate principal amount of Loans outstanding hereunder plus (ii) the aggregate amount of the Letter of Credit Liabilities hereunder.
Revolving Loan Termination Date means the earlier of (a) the Revolving Loan Maturity Date or (b) the date specified by Agent in accordance with Section 9.1 hereof.
S&P means Standard & Poor’s.
Secretary’s Certificate means a certificate, in Proper Form, of the Secretary or an Assistant Secretary of a corporation as to (a) the resolutions of the Board of Directors of such corporation authorizing the execution, delivery and performance of the documents to be executed by such corporation; (b) the incumbency and signature of the officer of such corporation executing such documents on behalf of such corporation, and (c) the Organizational Documents of such corporation.
Security Agreements means security agreements, each in Proper Form, executed or to be executed in favor of Agent, securing the Obligations, covering all of the issued and outstanding equity interests in each Material Subsidiary of Borrower (other than Foreign Subsidiaries, with respect to which only 65% of its issued and outstanding equity interests shall be covered), as the same may from time to time be amended, modified, restated or supplemented.
Security Documents means, collectively, the Security Agreements and any and all security documents now or hereafter executed and delivered by any Obligor to secure all or any part of the Obligations, as any of them may from time to time be amended, modified, restated or supplemented.
Shareholders’ Equity means the consolidated shareholders’ equity of Borrower and its Subsidiaries determined in accordance with GAAP.
Stated Rate means the effective weighted per annum rate of interest applicable to the Loans; provided, that if on any day such rate shall exceed the Ceiling Rate for that day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each day thereafter until the total amount of interest accrued at the Stated Rate on the unpaid principal balances of the Notes plus the Additional Interest equals the total amount of interest which would have accrued if there had been no Ceiling Rate. Without notice to Borrower or any other Person, the Stated Rate shall
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automatically fluctuate upward and downward in accordance with the provisions of this definition.
Statutory Net Operating Expenses means statutory policy acquisition costs and other underwriting expense, net of miscellaneous income or loss, including equity in earnings (loss) of Subsidiaries for the period of time in question, as determined in accordance with statutory accounting standards.
Statutory Net Written Premiums means the total of all premiums received or to be received for insurance underwritten and reinsurance assumed during a given period less the total premium paid or to be paid for reinsurance ceded to others during such period, as determined in accordance with statutory accounting standards.
Subsidiary means, as to a particular parent Corporation, any Corporation of which more than 50% of the indicia of equity rights (whether outstanding capital stock or otherwise) is at the time directly or indirectly owned by, such parent Corporation.
Swing Loan shall mean a Loan made pursuant to Section 2.1(b) hereof.
Swing Loan Availability Period shall mean the period from and including the Effective Date to (but not including) the Revolving Loan Termination Date.
Swing Note shall mean that certain promissory note dated as of the Effective Date herewith in the original principal amount of $20,000,000 executed by Borrower payable to the order of Xxxxx Fargo.
Taxes shall have the meaning ascribed to it in Section 4.1(d).
Unfunded Liabilities means, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all benefits under such Plan exceeds (b) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent actuarial valuation report for such Plan, but only to the extent that such excess represents a potential liability of any member of the Controlled Group to the PBGC or a Plan under Title IV of ERISA. With respect to multi-employer Plans, the term “Unfunded Liabilities” shall also include asserted withdrawal liability under Section 4201 of ERISA to all multi-employer Plans to which Borrower or any member of a Controlled Group for employees of Borrower contributes.
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termination of any Commitment; (iii) any adverse change in the condition (financial or otherwise) of any Obligor or any other Revolving Loan Lender; (iv) any breach of this Agreement or any other Loan Document by any Obligor or any other Revolving Loan Lender, or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. Each Swing Loan, once so participated, shall cease to be a Swing Loan for the purposes of this Agreement, but shall be a Revolving Loan. Borrower, Agent and the Revolving Loan Lenders agree pursuant to Chapter 346, that Chapter 346 shall not apply to the Swing Note or any Swing Loan and that neither the Swing Note nor any Swing Loan shall be governed by Chapter 346 or subject to its provisions in any manner whatsoever. Each Swing Loan shall be in an amount equal to $100,000 or a multiple thereof.
2.2 Terminations or Reductions of Commitments.
(b) No Reinstatement. No termination or reduction of the Commitments may be reinstated without the written approval of Agent and the Lenders.
(a) Borrower shall pay to Agent for the account of each Revolving Loan Lender revolving loan commitment fees for the period from the Effective Date to and including the Revolving Loan Termination Date at 0.15% per annum. Such revolving loan commitment fees shall be computed (on the basis of the actual number of days elapsed in a year composed of 365 or 366 days, as the case may be) on each day and shall be based on the excess of (x) the aggregate amount of each Revolving Loan Lender’s Commitment for such day over (y) the sum of (i) the aggregate unpaid principal balance of such Lender’s Note (excluding any Swing Loans) on such day plus (ii) the aggregate Letter of Credit Liabilities as to such Lender for such day. Accrued revolving loan commitment fees under this provision shall be payable in arrears on the Quarterly Dates prior to the Revolving Loan Termination Date and on the Revolving Loan Termination Date.
(b) All past due fees payable under this Section shall bear interest at the Past Due Rate.
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subsequent event which would otherwise result in funds being paid to the defaulting Lender, the amount which would have been paid to the defaulting Lender shall be divided among the non-defaulting Lenders ratably according to their respective shares of the outstanding Revolving Loan Commitment Percentages until the Revolving Loan Obligations of each Revolving Loan Lender (including the defaulting Lender) are equal to such Lender’s Revolving Loan Commitment Percentage of the total Revolving Loan Obligations.
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with the prior approval of Borrower, Agent and the applicable Lender, another Lender shall be the Issuer of each Letter of Credit.
(b) Additional Provisions. The following additional provisions shall apply to each Letter of Credit:
(i) Borrower shall give Agent notice requesting each issuance of a Letter of Credit hereunder as provided in Section 4.3 hereof and shall furnish such additional information regarding such transaction as Agent may reasonably request. Upon receipt of such notice, Agent shall promptly notify each Revolving Loan Lender of the contents thereof and of such Lender’s Revolving Loan Commitment Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving effect thereto the sum of (A) the aggregate outstanding principal amount of Loans plus (B) the aggregate Letter of Credit Liabilities would exceed the aggregate of the Commitments. On each day during the period commencing with the issuance of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Commitment of each Revolving Loan Lender shall be deemed to be utilized for all purposes hereof in an amount equal to such Lender’s Revolving Loan Commitment Percentage of the amount then available for drawings under such Letter of Credit (or any unreimbursed Reimbursement Obligations).
(iii) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment thereunder, Agent shall promptly notify Borrower and each Lender as to the amount to be paid as a result of such demand and the payment date therefor. If at any time prior to the earlier of the expiration date of a Letter of Credit or the Revolving Loan Termination Date any Issuer shall have made a payment to a beneficiary of a Letter of Credit in respect of a drawing under such Letter of Credit, each Revolving Loan Lender will pay to Agent immediately upon demand by such Issuer at any time during the period commencing after such payment until reimbursement thereof in full by Borrower, an amount equal to such Lender’s Revolving Loan Commitment Percentage of such payment, together with interest on such amount for each day from the date of demand for such payment (or, if such demand is made after 12:00 noon Houston, Texas time on such date, from the next succeeding Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the Federal Funds Rate for such period. To the extent that it is ultimately determined that the Borrower is relieved of its obligation to reimburse the applicable Issuer because of such Issuer’s gross negligence or willful misconduct in determining that documents received under any applicable Letter of Credit comply with the terms thereof, the applicable Issuer shall be obligated to refund to the paying Lenders all amounts paid to such Issuer to reimburse Issuer for the applicable drawing under such Letter of Credit.
(iv) Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse Agent, on the date on which the Agent notifies Borrower of the date and amount of any payment by the Issuer of any drawing under a Letter of Credit, for the amount paid by any Issuer upon such drawing, without presentment, demand, protest or other formalities of any kind, all of which are hereby waived. Such reimbursement may, subject to satisfaction of the conditions in Sections 5.1 and 5.2 hereof and to the aggregate of the Commitments (after adjustment in the same to reflect the elimination of the corresponding Letter of Credit Liability), be made by the borrowing of Loans. Agent will pay to each Revolving Loan Lender such
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Lender’s Revolving Loan Commitment Percentage of all amounts received from Borrower for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Letter of Credit, but only to the extent such Lender has made payment to Agent in respect of such Letter of Credit pursuant to clause (iii) above.
(v) Borrower will pay to Agent at the Principal Office for the account of each Revolving Loan Lender a letter of credit fee with respect to each Letter of Credit equal to the greater of (x) $500 or (y) the then current Margin Percentage multiplied by the face amount of such Letter of Credit (and computed on the basis of the actual number of days elapsed in a year composed of 360 days), in each case for the period from and including the date of issuance of such Letter of Credit to and including the date of expiration or termination thereof, such fee to be due and payable in advance. Agent will pay to each Revolving Loan Lender, promptly after receiving any payment in respect of letter of credit fees referred to in this clause (v), an amount equal to the product of such Lender’s Revolving Loan Commitment Percentage times the amount of such fees. In addition to and cumulative of the above described fees, Borrower shall pay to Agent, for the account of the applicable Issuer, in advance on the date of the issuance of the applicable Letter of Credit, a fronting fee in an amount equal to 0.10% of the face amount of the applicable Letter of Credit (such fronting fee to be retained by the applicable Issuer for its own account). The Borrower shall also pay each Issuer’s standard fees with respect to the amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.
(vi) The issuance by the applicable Issuer of each Letter of Credit shall, in addition to the conditions precedent set forth in Section 5 hereof, be subject to the conditions precedent (A) that such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory to Agent, and (B) that Borrower shall have executed and delivered such Applications and other instruments and agreements relating to such Letter of Credit as Agent shall have reasonably requested and are not inconsistent with the terms of this Agreement. In the event of a conflict between the terms of this Agreement and the terms of any Application, the terms hereof shall control.
(vii) Issuer will send to the Borrower and each Lender, immediately upon issuance of any Letter of Credit issued by Issuer or any amendment thereto, a true and correct copy of such Letter of Credit or amendment.
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expenses which may now exist or may hereafter arise, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason of or in connection with the failure of any other Revolving Loan Lender to fulfill or comply with its obligations to Agent, such Lender or such Issuer, as the case may be, hereunder (but nothing herein contained shall affect any rights Borrower may have against such defaulting Lender); provided that Borrower shall not be required to indemnify any party seeking indemnification for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of the party seeking indemnification, or (ii) the failure by the party seeking indemnification to pay under any Letter of Credit after the presentation to it of a request required to be paid under applicable law or (iii) disputes between or among any and all of Agent, Lenders and Issuers. Nothing in this Section 2.7(c) is intended to limit the obligations of Borrower under any other provision of this Agreement.
3. Borrowings, Payments, Prepayments and Interest Options.
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made hereunder as provided in Section 4.3 hereof and Agent shall promptly notify each Lender of such request. Not later than 1:00 p.m., Houston, Texas time on the date specified for each such borrowing hereunder, each Lender shall make available the amount of the Loan, if any, to be made by it on such date to Agent at its Principal Office, in immediately available funds, for the account of Borrower. Such amounts received by Agent will be held in an account maintained by Borrower with Agent. The amounts so received by Agent shall, subject to the terms and conditions of this Agreement, be made available to Borrower by wiring or otherwise transferring, in immediately available funds, such amount to an account designated by Borrower. Borrower shall give Agent notice of each borrowing of a Swing Loan to be made hereunder as provided in Section 4.3 hereof and, no later than 1:00 p.m., Houston, Texas time on the date specified for such borrowing hereunder, Xxxxx Fargo shall make available the amount of such Swing Loan to Borrower by depositing the same, in immediately available funds, in an account designated by Borrower and approved by Agent
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(i) Borrower shall give Agent telephonic notice, promptly confirmed by a Rate Designation Notice (and Agent shall promptly inform each Lender thereof). Each such telephonic and written notice shall specify the amount of the Loan which is the subject of the designation, if any; the amount of borrowings into which such borrowings are to be converted or for which an Interest Option is designated; the proposed date for the designation or conversion and the Interest Period or Periods, if any, selected by Borrower. Such telephonic notice shall be irrevocable and shall be given to Agent no later than the applicable Rate Designation Date.
(ii) No more than ten (10) LIBOR Borrowings shall be in effect with respect to the Loans at any time.
(iii) Each designation or conversion of a LIBOR Borrowing shall occur on a LIBOR Business Day.
(iv) Each request for a LIBOR Borrowing shall be in the amount equal to an integral multiple of $2,000,000 or an integral multiple of $100,000 in excess thereof.
(v) Each designation of an Interest Option with respect to the Notes shall apply to all
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of the Notes ratably in accordance with their respective outstanding principal balances. If any Lender assigns an interest in any of its Notes when any LIBOR Borrowing is outstanding with respect thereto, then such assignee shall have its ratable interest in such LIBOR Borrowing.
(c) Special Provisions Applicable to LIBOR Borrowings.
(1) | subject any Lender to any Taxes, or any deduction or withholding for any Taxes, on or from any payment due under any LIBOR Borrowing or other amount due hereunder, other than income and franchise taxes of the United States or its political subdivisions or such other jurisdiction in which the applicable Lender has its principal office or applicable lending office; or | |||
(2) | change the basis of taxation of payments due from Borrower to any Lender under any LIBOR Borrowing (other than by a change in the rate of taxation of the overall net income of such Lender); or | |||
(3) | impose, modify, increase or deem applicable any reserve requirement (excluding that portion of any reserve requirement included in the calculation of the applicable Eurodollar Rate), |
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special deposit requirement or similar requirement (including, but not limited to, state law requirements and Regulation D) against assets of any Lender, or against deposits with any Lender, or against loans made by any Lender, or against any other funds, obligations or other property owned or held by any Lender; or | ||||
(4) | Impose on any Lender any other condition regarding any LIBOR Borrowing; |
and the result of any of the foregoing is to materially increase the cost to any Lender of agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or reduce the amount of principal or interest received by any Lender, then, within 15 Business Days after demand by the applicable Lender (accompanied by a statement setting forth in reasonable detail the applicable Lender’s basis therefor), Borrower shall pay to Agent additional amounts which shall compensate each Lender for such increased cost or reduced amount. The determination by any Lender of the amount of any such increased cost, increased reserve requirement or reduced amount shall create a rebuttable presumption as to the accuracy thereof. Borrower shall have the right, if it receives from Agent any notice referred to in this paragraph, upon three Business Days’ notice to Agent (which shall notify each affected Lender), either (i) to repay in full (but not in part) any borrowing with respect to which such notice was given, together with any accrued interest thereon, or (ii) to convert the LIBOR Borrowing which is the subject of the notice to a Base Rate Borrowing; provided, that any such repayment or conversion shall be accompanied by payment of (x) the amount required to compensate each Lender for the increased cost or reduced amount referred to in the preceding paragraph; (y) all accrued and unpaid interest to date on the amount so repaid or converted, and (z) any Funding Loss which any Lender may incur as a result of such repayment or conversion. Each Lender will notify Borrower through Agent of any event occurring after the date of this Agreement which will entitle such Lender to compensation pursuant to this Section as promptly as practicable after it obtains knowledge thereof and determines to request such compensation, and (if so requested by Borrower through Agent) will designate a different lending office of such Lender for the applicable LIBOR Borrowing or will take such other action as Borrower may reasonably request if such designation or action is consistent with the internal policy of such Lender and legal and regulatory restrictions, will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Lender, be materially disadvantageous to such Lender (provided that such Lender shall have no obligation so to designate a different lending office which is located in the United States of America).
(iii) Inadequacy of Pricing and Rate Determination. If, for any reason with respect to any Interest Period, Agent shall have determined (which determination shall create a rebuttable presumption as to the accuracy thereof) that:
(1) | Agent is unable through its customary general practices to determine any applicable Eurodollar Rate, or | |||
(2) | by reason of circumstances affecting the applicable market, generally, Agent is not being offered deposits in United States dollars in such market, for the applicable Interest Period and in an amount equal to the amount of any applicable LIBOR Borrowing requested by Borrower, |
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then Agent shall give Borrower written notice thereof (accompanied by a statement setting forth in reasonable detail the applicable Lender’s basis therefor) and thereupon, (A) any Rate Designation Notice previously given by Borrower designating the applicable LIBOR Borrowing which has not commenced as of the date of such notice from Agent shall be deemed for all purposes hereof to be of no force and effect, as if never given, and (B) until Agent shall notify Borrower that the circumstances giving rise to such notice from Agent no longer exist, each Rate Designation Notice requesting the applicable Eurodollar Rate shall be deemed a request for a Base Rate Borrowing, and any applicable LIBOR Borrowing then outstanding shall be converted, without any notice to or from Borrower, upon the termination of the Interest Period then in effect with respect to it, to a Base Rate Borrowing.
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agency charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive after the Effective Date regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency has or would have the effect of reducing the rate of return on such Lender’s capital as a consequence of its obligations hereunder, under the Letters of Credit, the Notes or other Obligations held by it to a level below that which such Lender could have achieved but for such adoption, change or compliance by an amount deemed by such Lender to be material, then from time to time, upon satisfaction of the conditions precedent set forth in this Section, after demand by such Lender (with a copy to Agent) as provided below, Borrower shall pay (subject to Section 11.7 hereof) to such Lender such additional amount or amounts as will compensate such Lender for such reduction. The certificate of any Lender setting forth such amount or amounts as shall be necessary to compensate it and the basis thereof and reasons therefor shall be delivered as soon as practicable to Borrower and shall create a rebuttable presumption as to the accuracy thereof. Borrower shall pay the amount shown as due on any such certificate within five (5) Business Days after the delivery of such certificate. In preparing such certificate, a Lender may employ such assumptions and allocations of costs and expenses as it shall in good xxxxx xxxx reasonable and may use any reasonable averaging and attribution method.
(1) | Borrower shall not be required to pay to any Lender reimbursement with regard to any costs or expenses described in such Sections, unless such Lender notifies Borrower of such costs or expenses within 90 days after the date paid or incurred but in no event more than 90 days after the repayment of the Loans and the termination of the Commitments; | |||
(2) | none of the Lenders shall be permitted to pass through to Borrower charges and costs under such Sections (other than Funding Losses) on a discriminatory basis (i.e., which are not also passed through by such Lender to all other customers of such Lender similarly situated where such customer is subject to documents providing for such pass through); and | |||
(3) | if any Lender (including, without limitation, the Agent) elects to pass through to Borrower any material charge or cost under such Sections (other than Funding Losses) or elects to terminate the availability of LIBOR Borrowings for any material period of time, Borrower may, within 60 days after the date of such event and so long as no Default shall have occurred and be continuing, elect to terminate such Lender as a party to this Agreement; provided that, concurrently with such termination Borrower shall (i) if Agent and each of the other Lenders shall consent, pay that Lender all principal, interest and fees and other amounts owed to such Lender through such date of termination or (ii) have arranged for another financial institution approved by Agent (such approval not to be unreasonably withheld) as of such date, to become a substitute Lender for all purposes under this Agreement in the manner provided in Section 11.6; provided further that, prior to substitution for any Lender, Borrower shall have given written notice to Agent of such intention and the Lenders shall |
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have the option, but no obligation, for a period of 60 days after receipt of such notice, to increase their Commitments in order to replace the affected Lender in lieu of such substitution. |
4. Payments; Pro Rata Treatment; Computations, Etc.
(a) Except to the extent otherwise provided herein, all payments of principal, interest Reimbursement Obligations and other amounts to be made by Borrower hereunder, under the Notes and under the other Loan Documents shall be made in Dollars, in immediately available funds, without set-off, deduction or counterclaim, to Agent at the Principal Office (or in the case of a successor Agent, at the principal office of such successor Agent in the United States), not later than 1:00 p.m., Houston, Texas time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day).
(b) Borrower shall, at the time of making each payment hereunder, under any Note or under any other Loan Document, specify to Agent the Loans or other amounts payable by Borrower hereunder or thereunder to which such payment is to be applied. Each payment received by Agent hereunder, under any Note or under any other Loan Document for the account of a Lender shall be paid promptly to such Lender, in immediately available funds. If Agent fails to send to any Lender the applicable amount by the close of business on the date any such payment is received by Agent if such payment is received prior to 1:00 p.m., Houston, Texas time (or on the next succeeding Business Day with respect to payments which are received after 1:00 p.m., Houston, Texas time), Agent shall pay to the applicable Lender interest on such amount from such date at the Federal Funds Rate.
(c) If the due date of any payment hereunder or under any Note falls on a day which is not a Business Day, the due date for such payments (except as otherwise provided in Section 3.3 hereof) shall be extended to the next succeeding Business Day and interest shall be payable for any principal so extended for the period of such extension.
(d) All payments by the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for or on account of any present or future income, stamp, or other taxes, fees, duties, withholding or other charges of any nature whatsoever imposed by any taxing authority excluding in the case of each Lender taxes imposed on or measured by its net income or franchise taxes imposed by the jurisdiction in which it is organized or through which it acts for purposes of this Agreement (such non-excluded items being hereinafter referred to as “Taxes”). If as a result of any change in law (or the interpretation thereof) after the date that the applicable Lender became a “Lender” under this Agreement any withholding or deduction from any payment to be made to, or for the account of, a Lender by the Borrower hereunder or under any other Loan Document is required in respect of any Taxes pursuant to any applicable law, rule, or regulation, then the Borrower will (i) pay to the relevant authority the full amount required to be so withheld or deducted; (ii) to the extent available, promptly forward to the Agent an official receipt or other documentation reasonably satisfactory to the Agent evidencing such payment to such authority; and (iii) pay to the Agent, for the account of each affected Lender, such additional amount or amounts as are necessary to ensure
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that the net amount actually received by such Lender will equal the full amount such Lender would have received had no such withholding or deduction been required. Each Lender shall determine such additional amount or amounts payable to it (which determination shall create a rebuttable presumption as to the accuracy thereof), and in such event, Agent shall furnish written evidence to Borrower showing how Agent made such determination. If a Lender becomes aware that any such withholding or deduction from any payment to be made by the Borrower hereunder or under any other Loan Document is required, then such Lender shall promptly notify the Agent and the Borrower thereof stating the reasons therefor and the additional amount required to be paid under this Section. Each Lender shall execute and deliver to the Agent and Borrower such forms as it may be required to execute and deliver pursuant to Section 11.13 hereof. To the extent that any such withholding or deduction results from the failure of a Lender to provide a form required by Section 11.13 hereof (unless such failure is due to some prohibition under applicable Legal Requirements), the Borrower shall have no obligation to pay the additional amount required by clause (iii) above. Anything in this Section notwithstanding, if any Lender elects to require payment by the Borrower of any material amount under this Section, the Borrower may, within 60 days after the date of receiving notice thereof and so long as no Default shall have occurred and be continuing, elect to terminate such Lender as a party to this Agreement; provided that, concurrently with such termination the Borrower shall (i) if the Agent and each of the other Lenders shall consent, pay that Lender all principal, interest and fees and other amounts owed to such Lender through such date of termination or (ii) have arranged for another financial institution approved by the Agent (such approval not to be unreasonably withheld) as of such date, to become a substitute Lender for all purposes under this Agreement in the manner provided in Section 11.6; provided further that, prior to substitution for any Lender, the Borrower shall have given written notice to the Agent of such intention and the Lenders shall have the option, but no obligation, for a period of 60 days after receipt of such notice, to increase their Commitments in order to replace the affected Lender in lieu of such substitution.
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Number of Business | ||
Days Prior Notice | ||
Borrowing at the Base Rate
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1 Business Day | |
Borrowings or prepayments of
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same day | |
Swing Loans |
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Repayment of Base Rate Borrowing
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1 Business Day | |
Borrowing at Eurodollar Rate
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3 LIBOR Business Days | |
Repayment of LIBOR Borrowing |
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prior to last day of the applicable
|
3 LIBOR Business Days | |
Interest Period |
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Letter of Credit issuance
|
5 Business Days | |
Termination or Reduction of |
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Commitments
|
2 Business Days (subject to any | |
Funding Losses with respect to LIBOR Borrowings) |
Each such notice of termination or reduction shall specify the amount of the applicable Commitment to be terminated or reduced. Each such notice of borrowing or prepayment shall specify the amount of the Loans to be borrowed or prepaid and the date of borrowing or prepayment (which shall be a Business Day). Agent shall promptly notify the affected Lenders of the contents of each such notice. Any selection of a Eurodollar Rate with respect to a Loan shall be subject to the advance notice requirements set forth in Section 3.3 hereof.
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(a) Authorization and Status. Agent shall have received from the appropriate Governmental Authorities certified copies of the Organizational Documents (other than by-laws) of each Obligor, and evidence satisfactory to Agent of all action taken by each Obligor authorizing the execution, delivery and performance of the Loan Documents and all other documents related to this Agreement to which it is a party (including, without limitation, a certificate of the secretary of each such party which is a corporation setting forth the resolutions of its Board of Directors authorizing the transactions contemplated thereby and attaching a copy of its bylaws), together with such certificates as may be appropriate to demonstrate the qualification and good standing of and payment of taxes by each Obligor in the jurisdiction of its organization and in each other jurisdiction where the failure in which to qualify would have a Material Adverse Effect.
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each Lender may conclusively rely on such certificates until they receive notice in writing from the applicable Obligor to the contrary.
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(k) Ratings Confirmation. Agent shall have received reaffirmation of current ratings with respect to Borrower issued by Standard & Poor’s.
(l) Projections. Agent shall have received projections of consolidated financial statements of Borrower and its Subsidiaries, on a consolidated basis, for the balance of the current fiscal year and for the following fiscal year.
6. Representations and Warranties.
To induce the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, Borrower represents and warrants (such representations and warranties to survive any investigation and the making of the Loans and the issuance of any Letters of Credit) to the Lenders and Agent as follows:
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Governmental Authority which does or would reasonably be expected to have a Material Adverse Effect. No Obligor is in default with respect to any judgment, order or decree of any Governmental Authority where such default would have a Material Adverse Effect.
6.8 Regulations U and X. None of the proceeds of any Loan will be used for the purpose of purchasing or carrying directly or indirectly any margin stock or for any other purpose which would constitute this transaction a “purpose credit” within the meaning of Regulations U and X of the Board of Governors of the Federal Reserve System, as any of them may be amended from time to time.
6.10 No Untrue or Misleading Statements. No representation or warranty made by Borrower in any Loan Document or in any document, instrument or other writing furnished to the Lenders by or on behalf of any Obligor in connection with the transactions contemplated in any Loan Document contains any untrue material statement of material fact or omits to state any such material fact (of which any executive officer of Borrower has knowledge) necessary to make the representations, warranties and other statements contained herein or in such other document, instrument or writing not misleading in any material respect on the date when made or deemed made.
6.12 Investment Company Act. No Obligor is an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly,
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controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act.
6.15 Fiscal Year. The fiscal year of each Obligor ends on December 31.
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aggregate earnings, on a consolidated basis, of the Material Subsidiaries and Newly Acquired Subsidiaries for the twelve month period ending on the Effective Date is equal to or greater than ninety percent (90%) of the aggregate consolidated earnings of Borrower and its Subsidiaries for such period.
Borrower covenants and agrees with Agent and the Lenders that prior to the termination of this Agreement it will do or cause to be done, and cause each of its Subsidiaries to do or cause to be done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times (a) pay when due all taxes and governmental charges of every kind upon it or against its income, profits or Property, unless and only to the extent that the same shall be contested diligently in good faith and adequate reserves in accordance with GAAP have been established therefor and, in the case of Subsidiaries which are not Obligors, the failure to pay would reasonably be expected to have a Material Adverse Effect; (b) do all things necessary to preserve its existence, qualifications, rights and franchises in all jurisdictions where such failure to qualify would reasonably be expected to have a Material Adverse Effect; (c) comply with all applicable Legal Requirements (including without limitation Requirements of Environmental Law) in respect of the conduct of its business and the ownership of its Property, the noncompliance with which would reasonably be expected to have a Material Adverse Effect; and (d) cause its Property to be protected, maintained and kept in good repair (ordinary wear and tear excepted) and make all replacements and additions to such Property as may be reasonably necessary to conduct its business properly and efficiently except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.
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Subsidiaries which are not Foreign Subsidiaries (as filed with the appropriate regulatory authorities); (f) as soon as available and in any event within 180 days after the end of each applicable fiscal year, beginning with the fiscal year ending on December 31, 2004, annual financial statements prepared on a statutory basis for each Insurance Company Subsidiary which is a Foreign Subsidiary (as filed with the applicable regulatory authorities); (g) promptly upon their becoming publicly available, each financial statement, report, notice or definitive proxy statements sent by Borrower or any of its Subsidiaries to shareholders generally and each regular or periodic report and each registration statement or prospectus filed by Borrower or any of its Subsidiaries with any securities exchange or the Securities and Exchange Commission or any successor agency; (h) within sixty (60) days after the end of each fiscal year, projections of the consolidated financial statements of Borrower and its Subsidiaries for the following fiscal year; (i) at the request of Agent or the Majority Lenders, independent actuarial reserve adequacy summary reports for the Insurance Company Subsidiaries, in such form and substance as is utilized by the applicable Insurance Company Subsidiary in the ordinary course of its business and which conforms to normal and customary industry practice, issued by the actuarial consultant utilized by the Insurance Company Subsidiaries, such consultant to be reasonably satisfactory to Agent and the Majority Lenders; (j) within thirty (30) days after the provision thereof, all significant reports by the National Association of Insurance Commissioners or any insurance regulatory authority or other Governmental Authority with respect to any Insurance Company Subsidiary’s insurance business, and (k) such other financial projections and other information (including without limitation significant filings under state insurance holding company acts) relating to the condition (financial or otherwise), operations or business of any Obligor as from time to time may be reasonably requested by Agent (or any Lender through Agent). Each delivery of a financial statement pursuant to this Section 7.2 shall constitute a restatement of the representations contained in the last two sentences of Section 6.2 with respect to the period of time from the date of such most recently delivered financial statements.
(a) S&P Rating — a rating by S&P applicable to the Index Debt of A- or better.
(b) A.M. Best Rating — an A.M. Best rating for each of the Insurance Company Subsidiaries of at least “A”.
(c) Debt to Capitalization Ratio — a Debt to Capitalization Ratio of not greater than 35% at all times.
(d) Cash Flow Coverage Ratio — a Cash Flow Coverage Ratio at the end of each fiscal year of not less than 2.00 to 1.00.
(e) Combined Ratio — a Combined Ratio at the end of each fiscal quarter of not greater than 105%.
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inside and outside), confidential information regarding insured parties (provided that Borrower shall, if requested by Agent, use good faith efforts to obtain consent, or take such other actions, to permit the disclosure thereof) and classified governmental material, and make and take away copies thereof, and to discuss its affairs with its officers and accountants, all during normal business hours and at such intervals and to such extent as Agent or such Lender may reasonably desire. Unless an Event of Default has occurred which is continuing, Agent and Lenders shall not exercise their rights hereunder more than once each calendar year and Agent or the applicable Lender, as the case may be, shall pay its own costs and expenses relating to the exercise of the rights under this Section.
(a) the issuance by any court or governmental agency or authority of any injunction, order or other restraint prohibiting, or having the effect of prohibiting, the performance of this Agreement, any other Loan Document, or the making of the Loans or the initiation of any litigation, or any claim or controversy which would reasonably be expected to result in the initiation of any litigation, seeking any such injunction, order or other restraint;
(b) the filing or commencement of any action, suit or proceeding, whether at law or in equity or by or before any court or any Governmental Authority involving claims in excess of $15,000,000 (exclusive of claims covered by insurance and exclusive of claims made in the ordinary course of the insurance business of such Person) or which would reasonably be expected to result in a Default hereunder;
(c) any Event of Default or Default, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto;
(d) the incurrence of material burdensome restrictions under contracts or applicable law which would reasonably be expected to have a Material Adverse Effect and any other event (including strikes, labor disputes or loss of use of material patents or trademarks) which could reasonably be expected to have a Material Adverse Effect;
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(e) promptly after S&P shall have announced a change in the rating established or deemed to have been established for the Index Debt, written notice of such rating change; and
Borrower will also notify Agent in writing at least 30 days prior to the date that any Obligor changes its name or the location of its chief executive office or principal place of business or the place where it keeps its books and records.
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Borrower covenants and agrees with Agent and the Lenders that prior to the termination of this Agreement it will not, and will not suffer or permit any of its Subsidiaries to, do any of the following without the prior written consent of the Majority Lenders:
(i) | Indebtedness under this Agreement and the other Loan Documents and Indebtedness secured by Liens permitted by Section 8.2 hereof; | |||
(ii) | the liabilities and other credit facilities (whether or not funded) existing on the date of this Agreement and disclosed in the financial statements delivered on or prior to the Effective Date pursuant to Section 6.2 hereof and set forth on Exhibit G hereto, and all renewals, extensions and replacements (but not increases) of any of the foregoing; | |||
(iii) | the Interest Rate Risk Indebtedness; | |||
(iv) | current liabilities incurred in the ordinary course of business; | |||
(v) | purchase money Indebtedness (whether for the purchase of real or personal Property) and/or real estate construction Indebtedness which does not result in an Event of Default; | |||
(vi) | Indebtedness under sale and leaseback transactions not to exceed $10,000,000 in the aggregate at any time outstanding; | |||
(vii) | unsecured Indebtedness of Subsidiaries of the Borrower not to exceed $25,000,000 in the aggregate at any time outstanding (inclusive of amounts shown on Exhibit G hereto); | |||
(viii) | other unsecured Indebtedness of the Borrower which does not result in an Event of Default. |
(i) | artisans’, mechanics’ or other Liens imposed by law arising in the ordinary course of business, but only to the extent that payment thereof shall not at the time be overdue by more than 30 days or, if overdue by more than 30 days, the |
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payment thereof is being diligently contested in good faith and adequate reserves computed in accordance with GAAP have been set aside therefor; | ||||
(ii) | normal encumbrances and restrictions on, and defects in, title including, without limitation, zoning restrictions, easements, rights-of-way, restrictions and similar encumbrances, which do not secure Borrowed Money Indebtedness and which would not be reasonably expected to have, in the aggregate, a Material Adverse Effect; | |||
(iii) | Liens in favor of Agent or any Lender under the Loan Documents, including, without limitation, Liens securing Interest Rate Risk Indebtedness owed to one or more of the Lenders or Affiliate thereof (but not to any Person which is not, at the time the Interest Rate Risk Indebtedness is incurred, a Lender or an Affiliate thereof); | |||
(iv) | Liens incurred or deposits made in the ordinary course of business (1) in connection with workmen’s compensation, unemployment insurance, social security and other like laws, or (2) to secure insurance in the ordinary course of business, the performance of bids, tenders, contracts, leases, licenses, statutory obligations, surety, appeal and performance bonds and other similar obligations incurred in the ordinary course of business, not, in any of the cases specified in this clause (2), incurred in connection with the borrowing of money, the obtaining of advances or the payment of the deferred purchase price of Property; | |||
(v) | attachments, judgments and other similar Liens arising in connection with court proceedings, provided that the execution and enforcement of such Liens are effectively stayed and the claims secured thereby are being actively contested in good faith with adequate reserves made therefor in accordance with GAAP; | |||
(vi) | Liens securing obligations in respect of capital leases covering the property subject to the applicable capital lease provided that such capital leases are permitted under the other provisions of this Agreement; | |||
(vii) | existing Liens as of Effective Date as set forth on Exhibit H hereto; | |||
(viii) | Liens for taxes, fees, assessments or other governmental charges, but only to the extent that payment thereof shall not at the time be due or if due, the payment thereof is being diligently contested in good faith and adequate reserves computed in accordance with GAAP have been set aside therefor; | |||
(ix) | Liens securing purchase money Indebtedness permitted under Section 8.1 hereof and sale and leaseback Indebtedness permitted under Section 8.1 hereof and covering the Property so purchased or leased (as the case may be); | |||
(x) | Liens arising from precautionary Uniform Commercial Code financing statement filings with respect to operating leases or consignment arrangements otherwise permitted hereunder entered into by Borrower or any of its Subsidiaries in the ordinary course of business; |
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(xi) | licenses, leases and subleases permitted under this Agreement and granted to others that do not interfere in any material respect with the business or operations of Borrower and its Subsidiaries taken as a whole; and | |||
(xii) | extensions, renewals and replacements of Liens referred to in clauses (i) through (xi) above; provided that any such extension, renewal or replacement Lien shall be limited to the Property or assets covered by the Lien extended, renewed or replaced and that the Borrowed Money Indebtedness secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the amount of the Indebtedness secured by the Lien extended, renewed or replaced. |
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cash to the owner of any of the equity interests in Borrower or any of its Subsidiaries other than Permitted Dividends.
8.7 Transactions with Related Parties. Enter into any material transaction or material agreement with any officer, director or holder of any equity interest in Borrower or any of its Subsidiaries (or any Affiliate of any such Person) unless the same is upon terms substantially similar to those obtainable from wholly unrelated sources (to the best knowledge of the executive officers of Borrower); provided that the foregoing shall not prohibit Borrower or any Subsidiary from entering into transactions by and among Borrower and its Subsidiaries, subject to the provisions of Section 8.13 hereof. Notwithstanding the foregoing, Borrower and its Subsidiaries shall be entitled to make the following payments and/or enter into the following transactions: (i) the payment of reasonable and customary fees and reimbursement arrangements with respect to the procurement of services from any Subsidiary in the ordinary course of business; (ii) the payment of reasonable and customary fees and reimbursement of expenses payable to officers and directors of Borrower and its Subsidiaries; and (iii) the payment of reasonable lease payments for the use of vehicles, office space, equipment and other Property in which any officer or director of Borrower or any Subsidiary has a direct or indirect ownership interest.
8.11 Intentionally Left Blank.
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prior Lien upon such equity interests (or, in the case of Foreign Subsidiaries, 65% of such equity interests) securing the Obligations within forty-five (45) days after its formation, creation or acquisition.
(a) Payments - (i) any Obligor shall fail to make any payment or required prepayment of any installment of principal on the Loans or any Reimbursement Obligation payable under the Notes, this Agreement or the other Loan Documents when due or (ii) any Obligor fails to make any payment or required prepayment of interest with respect to the Loans, any Reimbursement Obligation or any other fee or amount under the Notes, this Agreement or the other Loan
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Documents when due and such failure to pay continues unremedied for a period of three Business Days; or
(b) Other Obligations - Borrower or any of its Subsidiaries shall default in the payment when due of any principal of or interest on any Indebtedness having an outstanding principal amount of at least $2,500,000 (other than the Loans and Reimbursement Obligations) and such default shall continue beyond any applicable period of grace; or any event or condition shall occur which results in the acceleration of the maturity of any Indebtedness having an outstanding principal amount of at least $2,500,000 (other than the Loans and Reimbursement Obligations) or enables (or, with the giving of notice or lapse of time or both, would enable) the holder of any such Indebtedness or any Person acting on such holder’s behalf to accelerate the maturity thereof and such event or condition shall not be cured within any applicable period of grace; or
(c) Representations and Warranties - any representation or warranty made or deemed made by or on behalf of any Obligor in this Agreement or any other Loan Document or in any certificate furnished or made by any Obligor to Agent or the Lenders in connection herewith or therewith shall prove to have been incorrect, false or misleading in any material respect as of the date thereof or as of the date as of which the facts therein set forth were stated or certified or deemed stated or certified; or
(d) Affirmative Covenants - (i) default shall be made in the due observance or performance of any of the covenants or agreements contained in Sections 7.3 or 7.8(c) hereof or (ii) default is made in the due observance or performance of any of the other covenants and agreements contained in Section 7 hereof or any other affirmative covenant of any Obligor contained in this Agreement or any other Loan Document and such default continues unremedied for a period of 30 days after (x) notice thereof is given by Agent to Borrower or (y) such default otherwise becomes known to any executive officer of Borrower, whichever is earlier; or
(e) Negative Covenants - default is made in the due observance or performance by Borrower of any of the covenants or agreements contained in Section 8 of this Agreement or of any other negative covenant of any Obligor contained in this Agreement or any other Loan Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a receiver, conservator, liquidator or trustee of Borrower or any of its Subsidiaries or of any of its Property is appointed by the order or decree of any court or agency or supervisory authority having jurisdiction, and such decree or order remains in effect for more than 90 days; or Borrower or any of its Subsidiaries is adjudicated bankrupt or insolvent; or any of such Person’s Property is sequestered by court order and such order remains in effect for more than 90 days; or a petition is filed against Borrower or any of its Subsidiaries under any state or federal bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, dissolution, liquidation or receivership law or any jurisdiction, whether now or hereafter in effect, and is not dismissed within 90 days after such filing; or
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its debts or other liabilities under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its Property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or fails generally to, or cannot, pay its debts generally as they become due (taking into account applicable grace periods) or takes any corporate action to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of Insolvency - Borrower or any of its Subsidiaries makes an assignment for the benefit of its creditors, or admits in writing its inability to pay its debts generally as they become due, or consents to the appointment of a receiver, trustee, or liquidator of such Person or of all or any substantial part of its Property; or
(i) Undischarged Judgments - a final non-appealable judgment or judgments for the payment of money exceeding, in the aggregate, $2,500,000 (exclusive of amounts covered by insurance and exclusive of judgments in the ordinary course of the insurance business of such Person) is rendered by any court or other governmental body against Borrower or any of its Subsidiaries and such Person does not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within 90 days from the date of entry thereof; or
(k) Concealment - Borrower or any of its Subsidiaries shall have concealed, removed, or permitted to be concealed or removed, any part of its Property, with intent to hinder, delay or defraud its creditors or any of them, or shall have made any transfer of its Property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid; or
(m) Change of Control - there should occur any Change of Control.
48
Obligors), to setoff and apply any and all deposits (general or special, time or demand, provisional or final (but excluding the funds held in accounts clearly designated as escrow or trust accounts held by Borrower or any other Obligor for the benefit of Persons which are not Affiliates of any Obligor, whether or not such setoff results in any loss of interest or other penalty, and including without limitation all certificates of deposit) at any time held, and any other funds or Property at any time held, and other Indebtedness at any time owing by such Lender to or for the credit or the account of Borrower or any other Obligor against any and all of the Obligations irrespective of whether or not such Lender or Agent will have made any demand under this Agreement, the Notes or any other Loan Document. Should the right of any Lender to realize funds in any manner set forth hereinabove be challenged and any application of such funds be reversed, whether by court order or otherwise, the Lenders shall make restitution or refund to Borrower pro rata in accordance with their Commitments. Each Lender agrees to promptly notify Borrower and Agent after any such setoff and application, provided that the failure to give such notice will not affect the validity of such setoff and application. The rights of Agent and the Lenders under this Section are in addition to other rights and remedies (including without limitation other rights of setoff) which Agent or the Lenders may have. This Section is subject to the terms and provisions of Sections 4.5 and 11.7 hereof.
49
or hereafter existing at law, in equity, or otherwise, and all such remedies, rights and powers shall be cumulative.
50
Lenders (including itself) in the form of a credit against the Obligations, and Agent or its designee may (but shall not be obligated to) accept title to such collateral for and on behalf of all Lenders.
51
otherwise indicates, include Agent in its individual capacity. Agent may (without having to account therefor to any Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust, letter of credit, agency or other business with Borrower (and any of its Affiliates) as if it were not acting as Agent, and Agent may accept fees and other consideration from Borrower (in addition to the fees heretofore agreed to between Borrower and Agent) for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.
52
assurances to its satisfaction by the Lenders of their indemnification obligations under Section 10.6 hereof against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.
53
(a) All notices and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made by telex, telegraph, telecopy (confirmed by mail), cable or other writing and telexed, telecopied, telegraphed, cabled, mailed or delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof (or provided for in an Assignment and Acceptance); or, as to any party hereto, at such other address as shall be designated by such party in a notice (given in accordance with this Section) (i) as to Borrower, to Agent, (ii) as to Agent, to Borrower and to each Lender, and (iii) as to any Lender, to Borrower and Agent. Except as otherwise provided in this Agreement, all such notices or communications shall be deemed to have been duly given when (i) transmitted by telex or telecopier or delivered to the telegraph or cable office, (ii) personally delivered (iii) one Business Day after deposit with an overnight mail or delivery service, postage prepaid or (iv) three Business Days’ after deposit in a receptacle maintained by the United States Postal Service, postage prepaid, registered or certified mail, return receipt requested, in each case given or addressed as aforesaid.
(b) Borrower agrees that Agent may make any material delivered by Borrower to Agent, as well as any amendments, waivers, consents, and other written information, documents, instruments and other materials relating to Borrower, any of its Subsidiaries, or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby (collectively, the “Communications”) available to the Lenders by posting such notices on an electronic delivery system (which may be provided by Agent, an Affiliate of Agent, or any Person that is not an Affiliate of Agent), such as IntraLinks, or a substantially similar electronic system (the “Platform”). Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither Agent nor any of its Affiliates warrants the accuracy, completeness, timeliness, sufficiency, or sequencing of the Communications posted on the Platform. Agent and its Affiliates expressly disclaim with respect to the Platform any liability for errors in transmission, incorrect or incomplete downloading, delays in posting or delivery, or problems accessing the Communications posted on the Platform and any liability for any losses, costs, expenses or liabilities that may be suffered or incurred in connection with the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by Agent or any of its Affiliates in connection with the Platform. Each Lender agrees that notice to it (as provided in the next
54
sentence) (a “Notice”) specifying that any Communication has been posted to the Platform shall for purposes of this Agreement constitute effective delivery to such Lender of such information, documents or other materials comprising such Communication. Each Lender agrees (i) to notify, on or before the date such Lender becomes a party to this Agreement, Agent in writing of such Lender’s e-mail address to which a Notice may be sent (and from time to time thereafter to ensure that Agent has on record an effective e-mail address for such Lender) and (ii) that any Notice may be sent to such e-mail address.
55
56
pursuant to this Agreement (including releases required under the definitions of “Agency Subsidiaries” and “Insurance Company Subsidiaries” set forth in Section 1.1 hereof) or any of the other Loan Documents or by law), or (g) modify the provisions of Sections 4.1(b) or 4.2 hereof regarding pro rata application of amounts after an Event of Default shall have occurred and be continuing. Notwithstanding anything in this Section 11.5 to the contrary, no amendment, modification, waiver or consent shall be made with respect to Section 10 without the consent of Agent to the extent it affects Agent, as Agent.
(a) This Agreement shall be binding upon and inure to the benefit of Borrower, Agent and the Lenders and their respective successors and assigns; provided, however, that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of all of the Lenders, and any such assignment or transfer without such consent shall be null and void. Each Lender may sell participations to any Person in all or part of any Loan, or all or part of its Notes, Commitments or interests in Letters of Credit, in which event, without limiting the foregoing, the provisions of the Loan Documents shall inure to the benefit of each purchaser of a participation; provided, however, the pro rata treatment of payments, as described in Section 4.2 hereof, shall be determined as if such Lender had not sold such participation. Any Lender that sells one or more participations to any Person shall not be relieved by virtue of such participation from any of its obligations to Borrower under this Agreement relating to the Loans. In the event any Lender shall sell any participation, such Lender shall retain the sole right and responsibility to enforce the obligations of Borrower relating to the Loans, including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement other than amendments, modifications or waivers with respect to (i) any fees payable hereunder to the Lenders, (ii) the amount of principal or the rate of interest payable on, or the dates fixed for the scheduled repayment of principal of, the Loans and (iii) the release of the Liens on all or substantially all of the Collateral.
(b) Each Lender may assign to one or more Lenders or any other Person all or a portion of its interests, rights and obligations under this Agreement; provided, however, that (i) the aggregate amount of the Commitments of the assigning Lender subject to each such assignment shall in no event be less than $5,000,000; (ii) any assignment by any Lender of all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) shall require the prior written consent of the Issuers (such consent not to be unreasonably withheld); (iii) other than in the case of an assignment to another Lender (that is, at the time of the assignment, a party hereto) or to an Affiliate of such Lender or to a Federal Reserve Bank, Agent and, so long as no Event of Default shall have occurred and be continuing, Borrower must each give its prior written consent, which consents shall not be unreasonably withheld, and (iv) the parties to each such assignment shall execute and deliver to Agent, for its acceptance an Assignment and Acceptance in the form of Exhibit D hereto (each an “Assignment and Acceptance”) with blanks appropriately completed, together with any Note or Notes subject to such assignment and a processing and recording fee of $3,000 paid by the assignee (for which Borrower will have no liability). Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (B) the Lender thereunder shall, to the extent provided in such Assignment and
57
Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto except in respect of provisions of this Agreement which survive payment of the Obligations and termination of the Commitments). Notwithstanding anything contained in this Agreement to the contrary, any Lender may at any time assign all or any portion of its rights under this Agreement and the Notes issued to it as collateral to a Federal Reserve Bank; provided that no such assignment shall release such Lender from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim, such Lender assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any of the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant thereto; (ii) such Lender assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance or observance by Borrower of any of its obligations under this Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 6.2 hereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon Agent, such Lender assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents; (v) such assignee appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all obligations that by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Lender.
(d) The entries in the records of Agent as to each Assignment and Acceptance delivered to it and the names and addresses of the Lenders and the Commitments of, and principal amount of the Loans owing to, each Lender from time to time shall create a rebuttable presumption as to the accuracy thereof and Borrower, Agent and the Lenders may treat each Person the name of which is recorded in the books and records of Agent as a Lender hereunder for all purposes of this Agreement and the other Loan Documents.
(e) Upon Agent’s receipt of an Assignment and Acceptance executed by an assigning Lender and the assignee thereunder, together with any Note or Notes subject to such assignment and the written consent to such assignment (to the extent consent is required), Agent shall, if such Assignment and Acceptance has been completed with blanks appropriately filled, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in its records and (iii) give prompt notice thereof to Borrower. Within fifteen (15) Business Days after receipt of
58
notice (and provided that Borrower has consented to the applicable assignment to the extent Borrower’s consent is required with respect thereto), Borrower, at its own expense (but without incurring any expense or cost incurred by Agent or any Lender), shall execute and deliver to Agent in exchange for the surrendered Notes new Notes to the order of such assignee in an amount equal to the respective Commitments assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained Commitments hereunder, new Notes to the order of the assigning Lender in an amount equal to the respective Commitments retained by it hereunder. Such new Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the respective Note. Thereafter, such surrendered Notes shall be marked renewed and substituted and the originals thereof delivered to Borrower (with copies, certified by Borrower as true, correct and complete, to be retained by Agent).
(f) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 11.6, disclose to the assignee or participant or proposed assignee or participant, any information relating to Borrower furnished to such Lender by or on behalf of Borrower.
(g) Any assignment by any Lender of all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) shall require the prior written consent of the applicable Issuers (such consent not to be unreasonably withheld).
59
construed without reference to this Section 11.7, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Ceiling Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Lender at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Ceiling Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Lender, it shall be credited pro tanto against the then-outstanding principal balance of Borrower’s obligations to such Lender, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor.
60
documents satisfactory to such Lender, Borrower and Agent indicating that all payments to be made to such Lender hereunder are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty. Unless Borrower and Agent shall have received such forms or such documents indicating that payments hereunder are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, Borrower or Agent shall withhold taxes from such payments at the applicable statutory rate.
11.15 Jury Waiver. BORROWER, AGENT AND LENDERS EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
11.16 Conflicts Between This Agreement and the Other Loan Documents. In the event of any conflict between the terms of this Agreement and the terms of any of the other Loan Documents, the terms of this Agreement shall control.
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(i) its and its affiliates’ directors, officers, employees, auditors, attorneys and professional consultants;
(ii) any other Lender;
(iii) any Person to which such Lender offers to sell its Note or any part thereof, provided that each such Person agrees in writing to observe the confidentiality standards described in this Section;
(iv) any Person to which such Lender sells or offers to sell a participation in all or any part of its Note, provided that each such Person agrees in writing to observe the confidentiality standards described in this Section;
(v) any federal or state regulatory authority having jurisdiction over it;
(vi) any other Person to which such delivery or disclosure may be legally required in response to any subpoena or other legal process or investigative demand (in which event the Agent or the applicable Lender, as the case may be, shall, unless prohibited by applicable law, notify Borrower as soon as practicable), and
(vii) any other Person in connection with any litigation involving any obligation, right or remedy of Agent or any Lender under the Loan Documents.
Subject to the foregoing, Agent and each Lender hereby agrees to use its best efforts to hold in confidence and not to disclose any Confidential Information; provided, that such Person will be free, after notice to Borrower, to correct any false or misleading information which may become public concerning its relationship to Borrower. For the purpose of this Section, the term “Confidential Information” shall mean information about Borrower or any Subsidiary of Borrower furnished by Borrower or any such Subsidiary, but does not include any information which (i) is publicly known, or otherwise known to such holder, at the time of disclosure; (ii) subsequently becomes publicly known, but not through any act or omission by such holder, or (iii) otherwise becomes known to such holder other than through disclosure by Borrower or any Subsidiary of Borrower from any Person which is not known to be subject to a confidentiality agreement with Borrower or the applicable Subsidiary of Borrower.
62
11.19 Amendment and Restatement; Renewal Notes. This Agreement amends and restates in its entirety, effective as of the initial funding hereunder, that certain Loan Agreement (the “Prior Loan Agreement”) dated as of December 17, 1999 executed by and among Borrower, Xxxxx Fargo Bank, National Association (or its predecessor in interest), as Agent, and certain financial institutions therein set forth. The Notes have been given in renewal, extension and modification of the revolving credit facility previously provided to Borrower pursuant to such Loan Agreement.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
63
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
HCC INSURANCE HOLDINGS, INC., a Delaware corporation |
||||
By: | /s/ Xxxxxx X. Xxxxx, Xx. | |||
Xxxxxx X. Xxxxx, Xx., Executive Vice | ||||
President and Chief Financial Officer | ||||
Address for Notices: 00000 Xxxxxxxxx Xxxxxxx Xxxxxxx, Xxxxx 00000 Attention: President Telecopy No.: (000) 000-0000 |
64
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger and as a Lender |
||||
By: | /s/ Xxx X. XxXxxxxx | |||
Xxx X. XxXxxxxx, Vice President |
Address for Notices: Xxxxx Fargo Bank, N.A. 0000 Xxxxxxx Xxx. MAC C7300-034 Xxxxxx, Xxxxxxxx 00000 Telecopy No.: 000-000-0000 with a copy to: 12941 X-00 Xxxxx Xxxxxxx Xxxxx 000 XXX X0000-000 Xxxxxxx, XX 00000 Attention: Xxx X. XxXxxxxx Telecopy No.: 000-000-0000 |
65
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Syndications Agent and as a Lender
By: | /s/ Xxxxx Xxxxx |
Title: Director
Address for Notices:
Wachovia Bank, National Association
Global Corporate Loan Administration
000 X. Xxxxxxx Xx, XX0, XX 1183
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Fax: 000-000-0000
00
XXXXXXXXX XXXX XX XXXXX, N.A.
By: | /s/ Xxxx Xxxxxx |
Title: Senior Vice President
Address for Notices:
Southwest Bank of Texas
0000 Xxxx Xxx Xxxxxxx, POP 312
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No.: 000-000-0000
67
CITIBANK, N.A
By: | /s/ Xxxxx X. Xxxxxxx |
Title: Managing Director
Address for Notices:
000 Xxxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy No.: 000-000-0000
00
XXXXX XXXX XX XXXXXXXX
By: | /s/ Xxxxx Xxxxxxxxxx |
Title: Senior Corporate Manager
Address for Notices:
0xx Xxxxx
000 Xxxxxxxxxxxx
Xxxxxx XX0 X0X0
Attention: Xxxxx Xxxxxxxxxx
Telecopy No.: 020 7672 1093
69
BANK OF NEW YORK
By: | /s/ Xxxxx Xxxxxxxx |
Title: Vice President
Address for Notices:
The Bank of New York
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telecopy No.: 000-000-0000
SCHEDULE I
COMMITMENTS
Xxxxx Fargo Bank (Texas), National Association |
$ | 50,000,000 | ||
Wachovia Bank, National Association |
$ | 40,000,000 | ||
Citibank, N.A. |
$ | 40,000,000 | ||
Royal Bank of Scotland |
$ | 30,000,000 | ||
Southwest Bank of Texas, N.A. |
$ | 25,000,000 | ||
The Bank of New York |
$ | 15,000,000 |
1
SCHEDULE II
AGENCY SUBSIDIARIES
HCC Benefits Corporation, a Delaware corporation
ASU International, Inc., a Massachusetts corporation
HCC Global Financial Products, LLC, a Delaware limited liability company
Covenant Underwriters, Ltd., a Louisiana corporation
Continental Underwriters Ltd., a Louisiana corporation
HCC Risk Management Corporation, a Texas corporation
Professional Indemnity Agency, Inc., a New Jersey corporation
HCCS Corporation, a Delaware corporation
HCC Acquisitions (U.K.) Ltd., a company organized under the laws of England and Wales
HCC Employer Services, Inc., an Illinois corporation
HCC Employee Benefits, Inc., a Delaware corporation
1
SCHEDULE III
INSURANCE COMPANY SUBSIDIARIES
Houston Casualty Company, a Texas corporation
Avemco Insurance Company, a Maryland corporation
HCC Reinsurance Company Limited, an insurance company organized under the laws of Bermuda
1
EXHIBIT A
[LETTERHEAD OF THE BORROWER]
REQUEST FOR EXTENSION OF CREDIT
, 20
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent
0000 Xxxxxxx Xxx.
MAC C7300-034
Xxxxxx, Xxxxxxxx 00000
Gentlemen:
The undersigned hereby certifies that he is the of HCC INSURANCE HOLDINGS, INC., a Delaware corporation (the “Borrower”), and that as such he is authorized to execute this Request for Extension of Credit (the “Request”) on behalf of the Borrower pursuant to the Loan Agreement (as it may be amended, supplemented or restated from time to time, the “Agreement”) dated as of November 24, 2004, by and among the Borrower, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger, WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndications Agent, and the Lenders therein named.
The (CHECK ONE) [ ] Revolving Loan [ ] Letter of Credit being requested hereby is to be in the amount set forth in (b) below and is requested to be made on , which is a Business Day. The undersigned further certifies, represents and warrants that to his knowledge, after due inquiry (each capitalized term used herein having the same meaning given to it in the Agreement unless otherwise specified herein):
(A) | As of the date hereof: |
(1)
|
The aggregate Commitments are: | $ | ||
(2)
|
The aggregate outstanding principal of Notes, before giving effect to the Loan (if any) requested hereby, is: | ( ) | ||
(3)
|
The aggregate Letter of Credit Liabilities, before giving effect to the Letter of Credit (if any) requested hereby, is: | ( ) |
(4)
|
The aggregate unused Commitments of all Revolving Loan Lenders [A(1) minus A(2) and A(3)], if positive, is: | $ |
(B) | If and only if the aggregate unused Commitments of all Revolving Loan Lenders [A(4)] is positive, the Borrower hereby requests under this Request a Loan or Letter of Credit (as indicated above) in the amount of $ (which is no more than the aggregate unused Commitments of all Revolving Loan Lenders). | |||
(C) | If a Letter of Credit is requested hereby, it should be issued for the benefit of and should have an expiration date of (which date is no later than the earlier of (x) one year from date of issuance or (y) the date ten (10) Business Days prior to the end of the Revolving Loan Availability Period) and any special language to be incorporated into such Letter of Credit is attached hereto. | |||
(D) | The representations and warranties made in each Loan Document are true and correct in all material respects on and as of the time of delivery hereof, with the same force and effect as if made on and as of the time of delivery hereof (except for such representations and warranties which expressly refer to a prior date in which case they shall be true and correct as of such earlier date); provided, however, that for purposes of this Request in each representation and warranty in Article 6 of the Loan Agreement that makes reference to a Schedule, the representation under this Request that such representation and warranty in Article 6 of the Loan Agreement is true on and as of the date of making of such Loan shall take into account subsequent amendments to any Schedule referred to therein and matters arising after the date of the Loan Agreement which do not otherwise give rise to or constitute a Default under the Loan Agreement. | |||
(E) | No event which could reasonably be expected to have a Material Adverse Effect has occurred. | |||
(F) | No Default or Event of Default has occurred and is continuing. |
Thank you for your attention to this matter.
Very truly yours, | ||
[SIGNATURE OF AUTHORIZED OFFICER] |
EXHIBIT B
RATE DESIGNATION NOTICE
HCC INSURANCE HOLDINGS, INC., XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger (in such capacity herein called “Agent”), WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndications Agent, , and certain financial institutions executed and delivered that certain Loan Agreement (as amended, supplemented and restated, the “Loan Agreement”) dated as of November 24, 2004. Any term used herein and not otherwise defined herein shall have the meaning herein ascribed to it in the Loan Agreement. In accordance with the Loan Agreement, Borrower hereby notifies Agent of the exercise of an Interest Option.
11.20
|
Current borrowings | |||
(a)
|
Interest Options now in effect: | |||
(b)
|
Amounts: $ | |||
(c)
|
Expiration of current Interest Periods, if applicable: | |||
11.21
|
Proposed election | |||
(a)
|
Total Amount: $ | |||
(b)
|
Date Interest Option is to be effective: | |||
(c)
|
Interest Option to be applicable (check one): | |||
[ ] | Base Rate | |||
[ ] | Eurodollar Rate | |||
(d)
|
Interest Period: months (if available and if applicable) |
Borrower represents and warrants that the Interest Option and Interest Period selected above comply with all provisions of the Loan Agreement and that there exists no Event of Default or any event which, with the passage of time, the giving of notice or both, would be an Event of Default.
Date: , 20 |
||||
HCC INSURANCE HOLDINGS, INC., a Delaware corporation |
||||
By: | ||||
Name: | ||||
Title: | ||||
EXHIBIT C
NOTE
Houston, Texas
$ | , 20 |
FOR VALUE RECEIVED, HCC INSURANCE HOLDINGS, INC., a Delaware corporation (“Maker”), promises to pay to the order of (“Payee”), at the principal office of Xxxxx Fargo Bank, National Association, a national banking association, 0000 Xxxxxxx Xxx., MAC C7300-034, Xxxxxx, Xxxxxxxx 00000, in immediately available funds and in lawful money of the United States of America, the principal sum of Dollars ($ ) (or the unpaid balance of all principal advanced against this note, if that amount is less), together with interest on the unpaid principal balance of this note from time to time outstanding at the rate or rates provided in that certain Loan Agreement (as amended, supplemented, restated or replaced from time to time, the “Loan Agreement”) dated as of November 24, 2004 among Maker, certain signatory banks named therein, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger (in such capacity herein called “Agent”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndications Agent; provided, that for the full term of this note the interest rate produced by the aggregate of all sums paid or agreed to be paid to the holder of this note for the use, forbearance or detention of the debt evidenced hereby (including, but not limited to, all interest on this note at the Stated Rate plus the Additional Interest) shall not exceed the Ceiling Rate. Any term defined in the Loan Agreement which is used in this note and which is not otherwise defined in this note shall have the meaning ascribed to it in the Loan Agreement.
13. Mandatory Payments of Principal and Interest.
13.1 Accrued and unpaid interest on the unpaid principal balance of this note shall be due and payable on the Interest Payment Dates.
13.2 On the Revolving Loan Maturity Date, the entire unpaid principal balance
of this note and all accrued and unpaid interest on the unpaid principal balance of this note shall be finally due and payable.
13.3 All payments hereon made pursuant to this Paragraph shall be applied first to accrued interest, the balance to principal.
13.4 The Loan Agreement provides for required prepayments of the indebtedness evidenced hereby upon terms and conditions specified therein.
18. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO THE TEXAS CONFLICT OF LAWS RULES) AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
23. Business Loans. Maker warrants and represents to Payee and all other holders of this note that all loans evidenced by this note are and will be for business, commercial, investment or other similar purpose and not primarily for personal, family, household or agricultural use, as such terms are used in the Texas Finance Code.
HCC INSURANCE HOLDINGS, INC., a Delaware corporation |
||||
By: | ||||
Name: | ||||
Title: | ||||
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated: , 20
Reference is made to the Loan Agreement dated as of November 24, 2004 (as restated, amended, modified, supplemented and in effect from time to time, the “Loan Agreement”), among HCC INSURANCE HOLDINGS, INC., a Delaware corporation (the “Borrower”), the Lenders named therein, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger (in such capacity herein called “Agent”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndications Agent (the “Agent”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Loan Agreement. This Assignment and Acceptance, between the Assignor (as defined and set forth on Schedule I hereto and made a part hereof) and the Assignee (as defined and set forth on Schedule I hereto and made a part hereof) is dated as of the Effective Date of Assignment (as set forth on Schedule I hereto and made a part hereof).
24. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date, an undivided interest (the “Assigned Interest”) in and to all the Assignor’s rights and obligations under the Loan Agreement respecting those, and only those, credit facilities contained in the Loan Agreement as are set forth on Schedule I (collectively, the “Assigned Facilities,” individually, an “Assigned Facility”), in a principal amount for each Assigned Facility as set forth on Schedule I.
25. The Assignor (i) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that it is legally authorized to enter into this Assignment and Acceptance and that it is the legal and beneficial owner of the Assigned Interest and that the Assigned Interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or its Subsidiaries or the performance or observance by the Borrower or its Subsidiaries of any of its respective obligations under the Loan Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto; and (iii) attaches the Note(s) held by it evidencing the Assigned Facility or Facilities, as the case may be, assigned and requests that the Agent exchange such Note(s) for a new Note or Notes payable to the Assignor (if the Assignor has retained any interest in the Loans) and a new Note or Notes payable to the Assignee in the respective amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date of Assignment).
26. The Assignee (i) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (ii) confirms that it has received a copy of the Loan Agreement, together with copies of the financial statements referred to in Section 6.2 thereof, or if later, the
most recent financial statements delivered pursuant to Section 7.2 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis; (iii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (v) agrees that it will be bound by the provisions of the Loan Agreement and will perform in accordance with its terms all the obligations which by the terms of the Loan Agreement are required to be performed by it as a Lender; (vi) if the Assignee is organized under the laws of a jurisdiction outside the United States, attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Loan Agreement or such other documents as are necessary to indicate that all such payments are subject to such tax at a rate reduced by an applicable tax treaty, and (vii) has supplied the information requested on the administrative questionnaire provided by Agent.
27. Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance by it and the Borrower and recording by the Agent pursuant to Section 11.6 of the Loan Agreement, effective as of the Effective Date of Assignment (which Effective Date of Assignment shall, unless otherwise agreed to by the Agent, be at least five Business Days after the execution of this Assignment and Acceptance).
28. Upon such acceptance and recording, from and after the Effective Date of Assignment, the Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee, whether such amounts have accrued prior to the Effective Date of Assignment or accrue subsequent to the Effective Date of Assignment. The Assignor and Assignee shall make all appropriate adjustments in payments for periods prior to the Effective Date of Assignment by the Agent or with respect to the making of this assignment directly between themselves.
29. From and after the Effective Date of Assignment, (i) the Assignee shall be a party to the Loan Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Agreement.
30. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
Schedule I to Assignment and Acceptance
Legal Name of Assignor: |
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Legal Name of Assignee: |
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Effective Date of Assignment: |
||||
Percentage Assigned | ||||||||
of each Assigned Facility | ||||||||
(to at least 8 decimals) | ||||||||
Principal | (Shown as a percentage | |||||||
Assigned | Amount of | of aggregate original principal | ||||||
Facilities |
Assigned Interest |
amount of all Lenders) |
||||||
Loans |
$ | % | ||||||
Commitments |
$ | % |
, | ||
as Assignor |
By: |
||||
Name: |
||||
Title:
|
||||
, | ||
as Assignee |
By: |
||||
Name: |
||||
Title:
|
||||
HCC INSURANCE HOLDINGS, INC.,
a Delaware corporation
By: |
||||
Name: |
||||
Title:
|
||||
Accepted:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Agent
By: |
||||
Name: |
||||
Title:
|
||||
EXHIBIT E
The undersigned hereby certifies that he is the of HCC INSURANCE HOLDINGS, INC., a Delaware corporation (the “Borrower”), and that as such he is authorized to execute this certificate on behalf of the Borrower pursuant to the Loan Agreement (the “Agreement”) dated as of November 24, 2004, by and among the Borrower, XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lead Arranger, WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndications Agent, and the lenders therein named; and that a review of the Borrower and the other Obligors has been made under his supervision with a view to determining whether the Borrower and the other Obligors have fulfilled all of their respective obligations under the Agreement, the Notes and the other Loan Documents; and on behalf of the Borrower further certifies, represents and warrants that to the best knowledge of the officer executing this certificate, after due inquiry (each capitalized term used herein having the same meaning given to it in the Agreement unless otherwise specified):
(a) The Borrower and the other Obligors have fulfilled, in all material respects, their respective obligations under the Agreement, the Notes and the other Loan Documents to which each is a party.
(b) The representations and warranties made in each Loan Document are true and correct in all material respects on and as of the time of delivery hereof, with the same force and effect as if made on and as of the time of delivery hereof (except for such representations and warranties which expressly refer to a prior date in which case they shall be true and correct as of such earlier date); provided, however, that for purposes of this Compliance Certificate, in each representation and warranty in Article 6 of the Loan Agreement that makes reference to a Schedule, the representation under this Compliance Certificate that such representation and warranty in Article 6 of the Loan Agreement is true on and as of the date of making of such Loan shall take into account subsequent amendments to any Schedule referred to therein and matters arising after the date of the Loan Agreement which do not otherwise give rise to or constitute a Default under the Loan Agreement.
(c) The GAAP financial statements delivered to the Agent concurrently with this Compliance Certificate have been prepared in accordance with GAAP consistently followed throughout the period indicated and fairly present in all material respects the financial condition and results of operations of the applicable Persons as at the end of, and for, the period indicated (subject, in the case of Quarterly Financial Statements, to normal changes resulting from year-end adjustments).
The SAP (Statutory Accounting Principles) financial statements delivered to the Agent concurrently with this Compliance Certificate have been prepared in accordance with SAP consistently followed throughout the period indicated and fairly present in all material respects the financial condition and results of operations of the applicable
Persons as at the end of, and for, the period indicated (subject, in the case of Quarterly Financial Statements, to normal changes resulting from year-end adjustments).
(d) No Default or Event of Default has occurred and is continuing. In this regard, the compliance with the provisions of Section 7.3 is as follows:
(i) | Section 7.3(a) – S&P Rating |
Actual |
Required |
|||||||
______% |
³ | A- | % |
(ii) | Section 7.3(b) – A.M. Best Rating |
Actual |
Required |
|||||||
______% |
³ | A | % |
(iii) | Section 7.3(c) — Debt to Capitalization Ratio |
Actual |
Required |
|||||||
______% |
< | 35 | % |
(iv) | Section 7.3(d) — Cash Flow Coverage Ratio |
Actual |
Required |
|||||||
______ to 1.00 |
> | 2.00 to 1.00 |
(v) | Section 7.3(e) — Combined Ratio | |||
The Combined Ratio on a consolidated basis using statutory figures for the period ended is: |
Actual |
Required |
|||||||
______% |
< | 105 | % |
(e) Attached hereto is a corporate chart of the Borrower and its Subsidiaries as of the date hereof, with each Insurance Company Subsidiary and Agency Subsidiary identified thereon and showing the applicable owner(s) of each Subsidiary.
(f) No event which could reasonably be expected to have a Material Adverse Effect has occurred.
DATED as of , 20 .
HCC INSURANCE HOLDINGS, INC., a Delaware corporation |
||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
EXHIBIT F
HCC INSURANCE HOLDINGS, INC.
SUBSIDIARIES
State or | ||||
Country of | ||||
NAME |
Incorporation |
|||
1.
|
5308 Acquisition Co., LLC | Delaware | ||
2.
|
American Contractors Indemnity Company | California | ||
3.
|
ASU International, Inc. | Massachusetts | ||
4.
|
ASU International Limited | United Kingdom | ||
5.
|
Avemco Corporation | Delaware | ||
6.
|
Avemco Insurance Agency, Inc. | Maryland | ||
7.
|
Avemco Insurance Company | Maryland | ||
8.
|
Avemco Services, Inc. | Maryland | ||
9.
|
Aviation & Marine Premium Acceptance Corporation | Texas | ||
10.
|
Centris Insurance Company | Indiana | ||
11.
|
Continental Underwriters Ltd. | Louisiana | ||
12.
|
Covenant Claims Services, LLC | Louisiana | ||
13.
|
Covenant Underwriters, Ltd. | Louisiana | ||
14.
|
Xxxxxxx Manchester & Company, Limited | United Kingdom | ||
15.
|
Eagles Aerobatic Flight Team, Inc. | Wisconsin | ||
16.
|
Euro Sports Underwriters Limited | United Kingdom | ||
17.
|
Great American Industries, Inc. | Louisiana | ||
18.
|
HCC Acquisition Sub, Inc. | New York | ||
19.
|
HCC Acquisition (U.K.) Ltd. | United Kingdom | ||
20.
|
HCC Administrators, Inc. | Illinois | ||
21.
|
HCC Aviation Insurance Group, Inc. | Texas | ||
22.
|
HCC Aviation, LLC | Delaware | ||
23.
|
HCC Aviation, Ltd. | Texas | ||
24.
|
HCC Benefits Corporation | Delaware | ||
25.
|
HCC Diversified Financial Products Limited | United Kingdom | ||
26.
|
HCC Employee Benefits, Inc. | Delaware | ||
27.
|
HCC Employer Services, Inc. | Alabama | ||
28.
|
HCC Employer Services, Inc. | Illinois | ||
29.
|
HCC Global Financial Products, LLC | Delaware | ||
30.
|
HCC Global Financial Products of Alabama, LLC | Alabama | ||
31.
|
HCC Global Financial Products of Texas, LLC | Texas | ||
32.
|
HCC Global Financial Products, SL, Unipersonal, a Spanish Sociedad Limitada | Spain | ||
33.
|
HCC Indemnity Guaranty Agency, Inc. | New York | ||
34.
|
HCC Intermediate Holdings, Inc. | Delaware | ||
35.
|
HCC Life Insurance Company | Indiana | ||
36.
|
HCC Properties, LLC | Delaware | ||
37.
|
HCC Reinsurance Company Limited | Bermuda | ||
38.
|
HCC Risk Management Corporation | Texas | ||
39.
|
HCC Service Company, Ltd. | Texas | ||
40.
|
HCC Service Delaware, LLC | Delaware | ||
41.
|
HCC Specialty Holdings (No. 1) Limited | United Kingdom | ||
42.
|
HCC Specialty Holdings (No. 2) Limited | United Kingdom | ||
43.
|
HCC Specialty Insurance Company | Oklahoma |
State or | ||||
Country of | ||||
NAME |
Incorporation |
|||
44.
|
HCC Specialty Insurance Holdings, Ltd. | United Kingdom | ||
45.
|
HCC Strategic Investments, LLC | Delaware | ||
46.
|
HCC Surety Group, Inc. | Delaware | ||
47.
|
HCC Trustees Limited | United Kingdom | ||
48.
|
HCC Underwriters, A Texas Corporation | Texas | ||
49.
|
HCCS Corporation | Delaware | ||
50.
|
Houston Casualty Company | Texas | ||
51.
|
Houston Casualty Company Europe, Seguros y Reaseguros, S.A. | Spain | ||
52.
|
InsPro Corporation | California | ||
53.
|
Intellicare, Inc. | Alabama | ||
54.
|
Interra, Inc. | Indiana | ||
55.
|
LDG Insurance Agency Incorporated | Massachusetts | ||
56.
|
LDG Re (London) Ltd. | United Kingdom | ||
57.
|
LDG Re Worldwide Limited | Delaware | ||
58.
|
LDG Re Worldwide Limited | United Kingdom | ||
59.
|
LDG Reinsurance Corporation | Massachusetts | ||
60.
|
Loss Management, Inc. | Delaware | ||
61.
|
Loss Management Services, Inc. | Maryland | ||
62.
|
MAG Acquisition Sub, Inc. | Delaware | ||
63.
|
Manchester Xxxxxxx Holdings, Limited | United Kingdom | ||
64.
|
Xxxxxxxx Adjusting Corp. | New York | ||
65.
|
Xxxxxxxx Xxxxxxx, Inc. | New York | ||
66.
|
Merger Sub, Inc. | Texas | ||
67.
|
National Insurance Underwriters | Arkansas | ||
68.
|
XXXXX Holdings Limited | United Kingdom | ||
69.
|
XXXXX Management Services Limited | United Kingdom | ||
70.
|
Premier Risk Services Limited | United Kingdom | ||
71.
|
Professional Indemnity Agency, Inc. | New Jersey | ||
72.
|
Professional Indemnity Agency, Inc. of N.Y. | New York | ||
73.
|
Profind Insurance Services Limited | United Kingdom | ||
74.
|
Xxxxxxx Xxxxxxxxx Limited (Bermuda) Ltd. | Bermuda | ||
75.
|
Xxxxxxx Xxxxxxxxx Limited | United Kingdom | ||
76.
|
Xxxxxxx Xxxxxxxxx Limited, (RML) (Exempted) Co. | Jordan | ||
77.
|
Xxxxxxx Xxxxxxxxx Limited (North America), Inc. | New York | ||
78.
|
SBS Insurance Holdings, A TexasCorporation | Texas | ||
79.
|
Signal Aviation Insurance Services, Inc. | Nevada | ||
80.
|
Specialty Reinsurance Intermediaries, Inc. | Massachusetts | ||
81.
|
Specialty Insurance Underwriters, Inc. | Missouri | ||
82.
|
Specialty Surety & Insurance Services, LLC | California | ||
83.
|
Surety Associates Holding Co., Inc. | New Mexico | ||
84.
|
The Centris Group, Inc. | Delaware | ||
85.
|
The Xxxxxxx Consulting Group, LLC | Georgia | ||
86.
|
TMD Rattner, L.L.C. | New York | ||
87.
|
TTR, LLC | New York | ||
88.
|
U.S. Specialty Insurance Company | Texas | ||
89.
|
US Holdings, Inc. | Delaware | ||
90.
|
USBenefits Insurance Services, Inc. | California | ||
91.
|
XXXX Xxxxxxxx, Inc. | Indiana | ||
92.
|
VASA North America, Inc. | Indiana |
EXHIBIT G
Existing Borrowed Money Indebtedness
1. | $15,000,000 Forward Exchange Transactions Line (uncommitted) from HSBC Bank plc to Xxxxxxx Xxxxxxxxx Limited. | |||
2. | $125,000,000 1.3% Convertible Notes (unsecured). | |||
3. | $172,451,000 2.0% Convertible Notes (unsecured). | |||
4. | Letter Loan Agreement by and between Houston Casualty Company and Xxxxx Fargo Bank, National Association dated April 30, 1998, and related documents, as amended (cash secured letter of credit facility). | |||
5. | Letter Loan Agreement by and between U.S. Specialty Insurance Company and Xxxxx Fargo Bank, National Association dated June 29, 1998, and related documents, as amended (cash secured letter of credit facility). | |||
6. | Letter Loan Agreement by and between HCC Insurance Holdings, Inc. and Xxxxx Fargo Bank, National Association dated April 29, 2002, and related documents, as amended (cash secured letter of credit facility). | |||
7. | Letter Loan Agreement by and between HCC Service Company, Ltd. and Xxxxx Fargo Bank, National Association dated August 26, 2004, and related documents, as amended (cash secured letter of credit facility). | |||
8. | Letter Loan Agreement by and between HCC Reinsurance Company Limited and Xxxxx Fargo Bank, National Association dated September 28, 2001, and related documents, as amended (cash secured letter of credit facility). | |||
9. | Note Payable of HCC Employer Services, Inc., payable to Caremark in monthly installments, included in the rental payment, dated as of April 1, 1997, with a final payment due in November 2005 ($19,673 balance). |
EXHIBIT H
Existing Liens
1. | Security interest in cash collateral granted pursuant to the Letter Loan Agreement by and between Houston Casualty Company and Xxxxx Fargo Bank, National Association dated April 30, 1998, and related documents, as amended. | |||
2. | Security interest in cash collateral granted pursuant to the Letter Loan Agreement by and between U.S. Specialty Insurance Company and Xxxxx Fargo Bank, National Association dated June 29, 1998, and related documents, as amended. | |||
3. | Security interest in cash collateral granted pursuant to the Letter Loan Agreement by and between HCC Insurance Holdings, Inc. and Xxxxx Fargo Bank, National Association dated April 29, 2002, and related documents, as amended. | |||
4. | Security interest in cash collateral granted pursuant to the Letter Loan Agreement by and between HCC Service Company, Ltd. and Xxxxx Fargo Bank, National Association dated August 26, 2004, and related documents, as amended. | |||
5. | Security interest in cash collateral granted pursuant to the Letter Loan Agreement by and between HCC Reinsurance Company Limited and Xxxxx Fargo Bank, National Association dated September , 2001, and related documents, as amended. | |||
6. | Security interest in furniture granted pursuant to Note Payable of HCC Employer Services, Inc. payable to Caremark dated April 1, 1997. |