Execution Copy
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CREDIT AGREEMENT
Dated as of September 23, 2005
among
ODYSSEY RE HOLDINGS CORP.,
as the Borrower,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
and
L/C Issuer,
and
The Other Lenders Party Hereto
WACHOVIA CAPITAL MARKETS, LLC,
as
Sole Lead Arranger and Sole Book Runner
KEY BANK, NATIONAL ASSOCIATION
as
Syndication Agent
and
CITIBANK, N.A. and XXXXXXX BANK, NATIONAL ASSOCIATION
as
Documentation Agents
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms............................................ 1
Section 1.2 Other Interpretive Provisions............................ 26
Section 1.3 Accounting Terms......................................... 27
Section 1.4 Rounding................................................. 27
Section 1.5 Times of Day............................................. 27
Section 1.6 Letter of Credit Amounts................................. 27
Section 1.7 Exchange Rates; Currency Equivalents..................... 28
Section 1.8 Redenomination of Certain Foreign Currencies and
Computation of Dollar Amounts............................ 28
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
Section 2.1 Revolving Loans.......................................... 28
Section 2.2 Borrowings, Conversions and Continuations of Revolving
Loans.................................................... 29
Section 2.3 Letters of Credit........................................ 30
Section 2.4 Prepayments.............................................. 41
Section 2.5 Termination or Reduction of Commitments.................. 42
Section 2.6 Repayment of Revolving Loans............................. 42
Section 2.7 Interest................................................. 42
Section 2.8 Fees..................................................... 43
Section 2.9 Computation of Interest and Fees......................... 44
Section 2.10 Evidence of Debt......................................... 44
Section 2.11 Payments Generally; Administrative Agent's Clawback...... 44
Section 2.12 Sharing of Payments by Lenders........................... 46
Section 2.13 Increase in Commitments.................................. 47
Section 2.14 Addition of Subsidiary Obligors.......................... 48
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.1 Taxes.................................................... 48
Section 3.2 Illegality............................................... 50
Section 3.3 Inability to Determine Rates............................. 51
Section 3.4 Increased Costs.......................................... 51
Section 3.5 Compensation for Losses.................................. 53
Section 3.6 Mitigation Obligations; Replacement of Lenders........... 53
Section 3.7 Survival................................................. 54
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ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
Section 4.1 Conditions of Initial Credit Extension................... 54
Section 4.2 Conditions to all Credit Extensions...................... 56
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Existence, Qualification and Power; Compliance with Laws. 57
Section 5.2 Authorization; No Contravention.......................... 58
Section 5.3 Governmental Authorization; Other Consents............... 58
Section 5.4 Binding Effect........................................... 58
Section 5.5 Financial Statements; No Material Adverse Effect......... 58
Section 5.6 Litigation............................................... 59
Section 5.7 No Default............................................... 59
Section 5.8 Ownership of Property; Liens............................. 59
Section 5.9 Insurance................................................ 60
Section 5.10 Taxes.................................................... 60
Section 5.11 ERISA Compliance......................................... 60
Section 5.12 Subsidiaries; Equity Interests........................... 61
Section 5.13 Margin Regulations; Investment Company Act; Public
Utility Holding Company Act.............................. 61
Section 5.14 Disclosure............................................... 61
Section 5.15 Compliance with Laws..................................... 62
Section 5.16 Solvent.................................................. 62
Section 5.17 Licenses................................................. 62
Section 5.18 Reinsurance Agreements................................... 62
Section 5.19 OFAC; Anti-Terrorism Laws................................ 63
Section 5.20 Security Documents....................................... 63
Section 5.21 Withholding Taxes........................................ 64
ARTICLE VI
AFFIRMATIVE COVENANTS
Section 6.1 Financial Statements..................................... 64
Section 6.2 Certificates; Other Information.......................... 65
Section 6.3 Notices.................................................. 67
Section 6.4 Payment of Obligations................................... 68
Section 6.5 Preservation of Existence, Etc........................... 69
Section 6.6 Maintenance of Properties................................ 69
Section 6.7 Maintenance of Insurance................................. 69
Section 6.8 Compliance with Laws..................................... 69
Section 6.9 Books and Records........................................ 69
Section 6.10 Inspection Rights........................................ 69
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Section 6.11 Use of Proceeds.......................................... 70
Section 6.12 Dividends................................................ 70
Section 6.13 OFAC, PATRIOT Act Compliance............................. 70
Section 6.14 Collateral............................................... 70
Section 6.15 Further Assurances....................................... 71
ARTICLE VII
NEGATIVE COVENANTS
Section 7.1 Liens.................................................... 71
Section 7.2 Investments.............................................. 72
Section 7.3 Indebtedness............................................. 73
Section 7.4 Merger; Consolidation.................................... 74
Section 7.5 Disposition of Assets.................................... 74
Section 7.6 Restricted Payments...................................... 74
Section 7.7 Change in Nature of Business............................. 75
Section 7.8 Transactions with Affiliates............................. 75
Section 7.9 Certain Amendments....................................... 75
Section 7.10 Burdensome Agreements.................................... 75
Section 7.11 Use of Proceeds.......................................... 76
Section 7.12 Fiscal Year.............................................. 76
Section 7.13 Reinsurance Agreements................................... 76
Section 7.14 Financial Covenants...................................... 76
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1 Events of Default........................................ 77
Section 8.2 Remedies Upon Event of Default........................... 79
Section 8.3 Application of Funds..................................... 80
ARTICLE IX
ADMINISTRATIVE AGENT
Section 9.1 Appointment and Authority................................ 81
Section 9.2 Rights as a Lender....................................... 81
Section 9.3 Exculpatory Provisions................................... 81
Section 9.4 Reliance by Administrative Agent......................... 82
Section 9.5 Delegation of Duties..................................... 83
Section 9.6 Resignation of Administrative Agent...................... 83
Section 9.7 Non-Reliance on Administrative Agent and Other Lenders... 84
Section 9.8 No Other Duties, Etc..................................... 84
Section 9.9 Administrative Agent May File Proofs of Claim............ 84
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ARTICLE X
MISCELLANEOUS
Section 10.1 Amendments, Etc.......................................... 85
Section 10.2 Notices; Effectiveness; Electronic Communication......... 86
Section 10.3 No Waiver; Cumulative Remedies........................... 87
Section 10.4 Expenses; Indemnity; Damage Waiver....................... 88
Section 10.5 Payments Set Aside....................................... 89
Section 10.6 Successors and Assigns................................... 90
Section 10.7 Treatment of Certain Information; Confidentiality........ 93
Section 10.8 Right of Set-off......................................... 94
Section 10.9 Interest Rate Limitation................................. 95
Section 10.10 Counterparts; Integration; Effectiveness................. 95
Section 10.11 Survival of Representations and Warranties............... 95
Section 10.12 Severability............................................. 95
Section 10.13 Replacement of Lenders................................... 95
Section 10.14 Governing Law; Jurisdiction; Etc......................... 96
Section 10.15 Waiver Jury Trial........................................ 97
Section 10.16 PATRIOT Act Notice....................................... 97
SCHEDULES
2.1 Commitments and Applicable Percentages
5.5 Supplement to Interim Financial Statements
5.10 Tax Sharing Agreements
5.12 Subsidiaries and Other Equity Investments
5.17 Licenses
5.18 Reinsurance Agreements
7.1 Existing Liens
7.2 Investments
7.3 Existing Indebtedness
7.8 Transactions with Affiliates
10.2 Administrative Agent's Office; Certain Addresses for Notices
EXHIBITS
A Form of Revolving Loan Notice
B Form of Revolving Note
C Form of Compliance Certificate
D Form of Assignment and Assumption
E Form of Security Agreement
F Form of L/C Conversion Notice
G Form of L/C Collateral Balance Report
H Form of Assumption Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of September 23,
2005, among ODYSSEY RE HOLDINGS CORP., a Delaware corporation (the "Borrower"),
ODYSSEY AMERICA REINSURANCE CORPORATION, a Connecticut corporation ("OARC"),
CLEARWATER INSURANCE COMPANY, a Delaware corporation, CLEARWATER SELECT
INSURANCE COMPANY, a Delaware corporation, XXXXXX INSURANCE COMPANY, a Delaware
corporation, XXXXXX SPECIALTY INSURANCE COMPANY, a New York corporation, XXXXXX
CORPORATE NAME LIMITED, a company incorporated in England and Wales, each lender
from time to time party hereto (collectively, the "Lenders" and individually, a
"Lender"), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent and
L/C Issuer.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Account Control Agreements" means, collectively, each control agreement
among a Custodian, the Administrative Agent and (respectively) each of the
Credit Parties, each in form and substance reasonably satisfactory to the
Administrative Agent, as amended.
"Acquisition" means the acquisition by any Person of (a) a majority of the
Equity Interests of another Person, (b) all or substantially all of the assets
of another Person or (c) all or substantially all of a line of business of
another Person, in each case (i) whether or not involving a merger or
consolidation with such other Person and (ii) whether in one transaction or a
series of related transactions.
"Administrative Agent" means Wachovia in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.2, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement.
"A.M. Best" means A.M. Best Company, Inc. and any successor thereto.
"Annual Statement" means, with respect to any Insurance Subsidiary for any
fiscal year, the annual financial statements of such Insurance Subsidiary as
required to be filed with the Insurance Regulatory Authority of its jurisdiction
of domicile and in accordance with the laws of such jurisdiction, together with
all exhibits, schedules, certificates and actuarial opinions required to be
filed or delivered therewith, prepared in accordance with Statutory Accounting
Practices. References to amounts on particular exhibits, schedules, lines, pages
and columns of such Annual Statements are based on the formats promulgated by
the NAIC for 2004 Annual Statements for the applicable Insurance Subsidiary. If
such format is changed in future years so that different information is
contained in such items or they no longer exist, it is understood that the
reference is to information consistent with that recorded in the referenced item
in the 2004 Annual Statement of the Insurance Subsidiary.
"Applicable Currency" shall mean (i) in the case of Revolving Loans,
Dollars and (ii) in the case of Letters of Credit, the currency in which the
Stated Amount of such Letter of Credit is denominated.
"Applicable Percentage" means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender's Commitment at such time. If the commitment of each
Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 8.2 or if the
Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.1 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.
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"Applicable Rate" means, for any day, with respect to the (a) Commitment
Fee, (b) the applicable rate to be added to LIBOR for purposes of determining
the interest payable on LIBOR Loans, (c) Utilization Fee, (d) Unsecured Letter
of Credit Fee, (e) Secured Letter of Credit Fee, and (f) the applicable rate to
be added to the Base Rate for purposes of determining the interest payable on
Base Rate Loans, the applicable rate per annum set forth below under the caption
"Commitment Fee," "Applicable Rate on LIBOR Loans," "Utilization Fee,"
"Unsecured Letter of Credit Fee," "Secured Letter of Credit Fee," and
"Applicable Rate on Base Rate Loans" and, respectively, in each case based upon
the Debt Rating (in each case based upon the higher of the two ratings):
APPLICABLE RATE
APPLICABLE RATE UNSECURED SECURED ON
PRICING ON UTILIZATION LETTER OF LETTER OF BASE RATE
LEVEL DEBT RATING COMMITMENT FEE LIBOR LOANS FEE CREDIT FEE CREDIT FEE LOANS
------- --------------- -------------- --------------- ----------- ---------- ---------- ---------------
I > or =BBB+/Baa1 0.125% 0.60% 0.10% 0.60% 0.275% 0.00%
II BBB/Baa2 0.15% 0.75% 0.10% 0.75% 0.275% 0.00%
III BBB-/Baa3 0.175% 0.85% 0.15% 0.85% 0.275% 0.00%
IV < BBB-/Baa3 0.20% 1.00% 0.15% 1.00% 0.275% 0.00%
or unrated
For purposes of the foregoing, (i) if at any time the difference between
the Debt Rating by Xxxxx'x and S&P is more than one rating grade, the rating one
level above the lower rating will apply, (ii) if either Xxxxx'x or S&P shall not
have in effect a Debt Rating, then the Applicable Rate shall be based upon the
remaining rating, and (iii) each change in the Applicable Rate shall be
effective as of the date the applicable rating agency first publicly announces
any change in its Debt Rating; provided, however, that, notwithstanding the
foregoing or anything else herein to the contrary, if at any time an Event of
Default shall have occurred and be continuing or the Debt Rating is not
available from Xxxxx'x and S&P, at all times from and including the date on
which such Event of Default occurred or such Debt Rating is not available to the
date on which such Event of Default shall have been cured or waived or either
Xxxxx'x or S&P shall make publicly available such Debt Rating, each Applicable
Rate shall be determined in accordance with Level IV of the above matrix
(notwithstanding the actual level).
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
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"Arranger" means Wachovia Capital Markets, LLC, in its capacity as sole
lead arranger and sole book runner.
"Asset Disposition" has the meaning specified in Section 7.5(a).
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.6(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit D or any other form approved by the
Administrative Agent.
"Assumption Agreement" means an assumption agreement in substantially the
form of EXHIBIT H.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the fiscal year ended December 31,
2004, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Auto-Extension Letter of Credit" has the meaning specified in Section
2.3(b)(iii).
"Availability Period" means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.6, and (c) the date of termination
of the commitment of each Lender to make Revolving Loans and of the obligation
of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.2.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Wachovia as
its "prime rate." The "prime rate" is a rate set by Wachovia based upon various
factors including Wachovia's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any change
in such rate announced by Wachovia shall take effect at the opening of business
on the day specified in the public announcement of such change.
"Base Rate Loan" means a Revolving Loan that bears interest based on the
Base Rate.
"Borrower" has the meaning specified in the introductory paragraph hereto.
"Borrower Materials" has the meaning specified in Section 6.2.
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"Borrower Reinsurance Agreement" means any arrangement whereby any
Insurance Subsidiary, as reinsurer, agrees to indemnify any other insurance or
reinsurance company against all or a portion of the insurance risks underwritten
by such insurance or reinsurance company under any insurance or reinsurance
policy.
"Borrowing" means a Revolving Borrowing.
"Business Day" means (i) any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located,
(ii) if such day relates to any LIBOR Loan, any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market, (iii) if such day relates to the issuance or payment under
any Letter of Credit denominated in Pounds Sterling (or any notice with respect
thereto), that is also a day on which commercial banks and the foreign exchange
market settle payments in London, England and/or (iv) if such day relates to the
issuance or payment under any Letter of Credit denominated in Euro (or any
notice with respect thereto), that is also a TARGET Day.
"Cash Collateral" and "Cash Collateralize" have the meanings specified in
Section 2.3(g).
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except
that a person or group shall be deemed to have "beneficial ownership" of
all Equity Interests that such person or group has the right to acquire
(such right, an "option right"), whether such right is exercisable
immediately or only after the passage of time) other than Fairfax, directly
or indirectly, of 25% or more of the Equity Interests of the Borrower
entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into
account all such securities that such person or group has the right to
acquire pursuant to any option right); or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that board or
5
equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause
(iii), any individual whose initial nomination for, or assumption of office
as, a member of that board or equivalent governing body occurs as a result
of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or on
behalf of the board of directors); or
(c) Fairfax and its Affiliates shall fail to own more than 50% of the
Equity Interests of the Borrower entitled to vote for members of the board
of directors of the Borrower; or
(d) any Change of Control (as defined in any other Indebtedness of the
Borrower or any of its Subsidiaries) shall occur.
"Clearwater" means Clearwater Insurance Company, a Delaware corporation.
"Clearwater Select" means Clearwater Select Insurance Company (formerly
Overseas Partners US Reinsurance Company), a Delaware corporation.
"Closing Date" means the first date all the conditions precedent in Section
4.1 are satisfied or waived in accordance with Section 4.1 (or, in the case of
Section 4.1(b), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986.
"Collateral" has the meaning specified in the Security Agreement.
"Collateral Coverage Percentage" means, for any category of L/C Collateral,
the percentage set forth opposite such category of L/C Collateral set forth
below and, in each case, subject to the original term to maturity criteria set
forth therein:
CATEGORY OF L/C COLLATERAL PERCENTAGE
-------------------------- -------------
Cash (denominated in U.S. Dollars) 100%
Prime bank certificates of deposit issued by U.S. banks
rated Aa3/AA- or better 95%
U.S. Government Securities
Maturity 2 years or less 95% of Market
Maturity over 2 years 90% of Market
Investment-grade municipal bonds (Rating Aaa/AAA)
Maturity 5 years or less 90% of Market
Investment-grade municipal bonds (Rating Aa1/AA+ -
Baa2/BBB)
Maturity 5 years or less 85% of Market
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CATEGORY OF L/C COLLATERAL PERCENTAGE
-------------------------- -------------
Investment-grade municipal bonds (Rating Aaa/AAA -
Baa3/BBB-)
Maturity over 5 years 80% of Market
Investment-grade corporate bonds (Rating Aa3/AA- or
better, non-convertible, NYSE-traded)
Maturity 2 years or less 90% of Market
Maturity over 2 years 85% of Market
Investment-grade corporate bonds (Rating A1/A+ to
Baa3/BBB-, non-convertible, NYSE-traded)
Maturity 2 years or less 85% of Market
Maturity over 2 years 80% of Market
Commercial paper (Rating A1-A2, P1-P2) 90% of Market
"Collateral Deficiency" has the meaning specified in Section 2.3(m)(ii).
"Collateral Value" means the fair market value of government, municipal or
corporate obligations or bonds or commercial paper as determined from the most
recent closing bid price for such obligations, bonds or commercial paper
obtained from the Wall Street Journal, or such other reputable reporting service
as the Administrative Agent may select. If such closing bid price is not
available in the Wall Street Journal, or such other reputable reporting service
as the Administrative Agent may select, the Collateral Value shall be the value
quoted to the Administrative Agent by a reputable brokerage firm selected by the
Administrative Agent.
"Commitment" means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to Section 2.1, and (b) purchase participations
in L/C Obligations, and in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender's name on
Schedule 2.1 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement.
"Commitment Fee" has the meaning specified in Section 2.8(a).
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C.
"Consolidated Indebtedness" means, as of the last day of any fiscal
quarter, the aggregate (without duplication) of all Indebtedness of the Borrower
and its Subsidiaries as of such date, determined on a consolidated basis in
accordance with GAAP. For purposes of calculating the Total Debt to
Capitalization Ratio, the aggregate amount of Guarantees listed on Schedule 7.3
shall be excluded from the calculation of Consolidated Indebtedness.
"Consolidated Net Income" means, for any period, all amounts which, in
conformity with GAAP consistently applied, would be included under net income on
a consolidated income statement of the Borrower and its Subsidiaries for such
period.
"Consolidated Net Worth" means, at any time, the net worth of the Borrower
and its Subsidiaries at such time, determined on a consolidated basis in
accordance with GAAP but excluding any preferred stock or other class of Equity
Interest that, by its stated terms (or by the terms of any class of Equity
Interest issuable upon conversion thereof or in exchange therefor),
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or upon the occurrence of any event, matures or is mandatorily redeemable, or is
redeemable at the option of the holders thereof, in whole or in part and
excluding the effect of Statement of Financial Accounting Standards No. 115
issued by the Financial Accounting Standards Board.
"Contingent Obligation" means, as to any Person (without duplication), any
direct or indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease, dividend, letter
of credit (excluding any letter of credit supporting reinsurance liabilities to
the extent of reserves established under GAAP) or other obligation (the "primary
obligations") of another person (the "primary obligor") including (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or discharge
of any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary obligation
against loss in respect thereof (each, a "Guaranty Obligation"); (b) with
respect to any Surety Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered, or (d) in respect of any Swap Contract;
provided, however, that obligations of each of the Insurance Subsidiaries under
Insurance Agreements or Borrower Reinsurance Agreements which are entered into
the ordinary course of business (including security posted by each of the
Insurance Subsidiaries in the ordinary course of its business to secure
obligations thereunder) shall not be deemed to be Contingent Obligations of such
Insurance Subsidiary or the Borrower for the purposes of this Agreement. The
amount of any Person's obligation under any Contingent Obligations shall
(subject to any limitation set forth therein) be deemed to be the lesser of (i)
the outstanding principal amount (or maximum permitted principal amount, if
larger) of the Indebtedness, obligation or other liability guaranteed or
supported thereby or (ii) the maximum stated amount so guaranteed or supported.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Convertible Debt" means (i) the 4.375% Convertible Senior Debentures due
2022, dated June 18, 2002, in the initial aggregate amount of $110,000,000, and
which are outstanding on the Closing Date and (ii) any other securities issued
by the Borrower or any of its Subsidiaries that are mandatorily convertible into
common equity, so long as such debt securities are afforded
8
equity capital treatment by S&P and Xxxxx'x (and the Borrower shall have
provided satisfactory evidence of such treatment to the Administrative Agent).
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"Credit Parties" means, collectively, the Borrower and each Subsidiary
Obligor.
"Credit Party Jurisdiction" means, with respect to any Credit Party, any of
(i) the jurisdiction of its organization and (ii) any other jurisdiction (y)
where such Credit Party is licensed or qualified to do business or (z) from or
through which payments hereunder are made by such Credit Party.
"Xxxx & Xxxxxxx" means Xxxx & Xxxxxxx Holdings Corp., a Delaware
corporation.
"Custodial Account" means each custodial, brokerage or similar account of
any Credit Party maintained by a custodian, broker or other securities
intermediary as a "securities account" within the meaning of Section 8-501(a) of
the Uniform Commercial Code for such Credit Party as the "entitlement holder"
within the meaning of Section 8-102(7) of the Uniform Commercial Code pursuant
to a Custodial Agreement, on which (and on the contents of which) a Lien has
been granted as security for the Secured Letters of Credit and the Obligations
relating thereto.
"Custodial Agreement" means each custodial or similar agreement between the
Credit Parties (or any of them) and a Custodian, pursuant to which one or more
Custodial Accounts are maintained, in each case as amended.
"Custodian" means each bank or financial institution that maintains a
Custodial Account (in its capacity as custodian thereof), in each case including
any sub-custodian.
"Debt Rating" means, as of any date of determination, the rating as
determined by Xxxxx'x or S&P of the Borrower's non-credit enhanced, senior
unsecured long-term debt.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a LIBOR Loan, the Default Rate shall be
an interest rate equal to the interest rate (including any Applicable Rate)
otherwise applicable to such Revolving Loan plus 2% per annum, and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum.
9
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Revolving Loans or participations in L/C Obligations required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding or other proceeding under any Debtor
Relief Law.
"Designation Date" has the meaning specified in Section 2.14.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Dollar Amount" means (i) with respect to Dollars or an amount denominated
in Dollars, such amount, and (ii) with respect to an amount of Foreign Currency
or an amount denominated in a Foreign Currency, the equivalent of such amount in
Dollars as determined by the Administrative Agent at such time on the basis of
the Spot Rate (determined with respect to the most recent Revaluation Date) for
the purchase of Dollars with such Foreign Currency.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and the L/C Issuer, and (ii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Credit Party or any of
their respective Subsidiaries directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights
10
for the purchase or acquisition from such Person of shares of capital stock of
(or other ownership or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other
ownership or profit interests in) such Person or warrants, rights or options for
the purchase or acquisition from such Person of such shares (or such other
interests), and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Euro" means the single currency of Participating Member States of the
European Union.
"Event of Default" has the meaning specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute, and all rules and regulations from time
to time promulgated thereunder.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of any Credit Party hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which any Credit Party is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 10.13), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the
11
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender's failure or inability (other
than as a result of a Change in Law) to comply with Section 3.1(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 3.1(a).
"Existing Senior Credit Facility" has the meaning specified in Section
4.1(d).
"Fairfax" means Fairfax Financial Holdings Limited, a Canada corporation.
"Fair Market Value" means, as of any date of determination thereof and with
respect to any property, the sale value of such property that would be realized
in an arm's-length sale at such time between an informed and willing buyer and
an informed and willing seller (neither being under a compulsion to buy or
sell).
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Wachovia on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated August 17, 2005 among the
Borrower, the Administrative Agent and the Arranger.
"Financial Strength Rating" means the opinion by A.M. Best of a Person's
ability to meet its obligations to its policyholders.
"Foreign Currency" means, at any time, (i) Pounds Sterling or (ii) Euro.
"Foreign Currency Equivalent" shall mean, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable Foreign
Currency as determined by the Administrative Agent at such time on the basis of
the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of such Foreign Currency with Dollars.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which any Credit Party is resident for tax
purposes. For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
12
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Granting Lender" has the meaning specified in Section 10.6(h).
"Guarantee" means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided, that a
Guarantee shall exclude (A) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of such
Person's business, and (B) obligations under indemnities in the ordinary course
of such Person's business (including, without limitation, pursuant to contracts
of insurance or reinsurance issued or assumed by such Person) or under stock
purchase or asset purchase or sale agreements, or which do not cover
Indebtedness of the type described in clauses (a) through (h) of the definition
of Indebtedness. The amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term "Guarantee" as a
verb has a corresponding meaning.
13
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HCNL" means Xxxxxx Corporate Name Limited, a company incorporated in
England and Wales.
"Historical Statutory Statements" has the meaning specified in Section
5.5(c).
"Honor Date" has the meaning specified in Section 2.3(c)(i).
"Xxxxxx" means Xxxxxx Insurance Company, a Delaware corporation.
"Xxxxxx Specialty" means Xxxxxx Specialty Insurance Company, a New York
corporation.
"Increase Effective Date" has the meaning specified in Section 2.13(d).
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business and, in each case, not past due for more than 60 days
after the date on which such trade account payable was created);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in
such Person or any other
14
Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends;
(h) the aggregate value of all Convertible Debt that exceeds 15% of
Total Capitalization at the time of determination; and
(i) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 10.4(b).
"Insurance Agreement" means all contracts of insurance issued by an
Insurance Subsidiary.
"Insurance Regulatory Authority" means, with respect to any Insurance
Subsidiary, the insurance department or similar Governmental Authority charged
with regulating insurance companies or insurance holding companies, in its
jurisdiction of domicile and, to the extent that it has regulatory authority
over such Insurance Subsidiary, in each other jurisdiction in which such
Insurance Subsidiary conducts business or is licensed to conduct business.
"Insurance Subsidiary" means any Subsidiary of the Borrower the ability of
which to pay dividends is regulated by an Insurance Regulatory Authority or that
is otherwise required to be regulated thereby in accordance with the applicable
Requirements of Law of its jurisdiction of domicile, and shall mean and include,
without limitation, each of the Subsidiary Obligors.
"Interest Payment Date" means, (a) as to any LIBOR Loan, the last day of
each Interest Period applicable to such LIBOR Loan and the Maturity Date;
provided, however, that if any Interest Period for a LIBOR Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Maturity Date.
"Interest Period" means, as to each LIBOR Loan, the period commencing on
the date such LIBOR Loan is disbursed or converted to or continued as a LIBOR
Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Revolving Loan Notice; provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such
15
Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"Investment Guidelines" means, to the extent applicable with respect to any
Credit Party or any Subsidiary, the investment guidelines attached as Schedule A
to such Credit Party's investment agreement filed with the Insurance Regulatory
Authority of such Credit Party or Subsidiary as in effect on, and delivered to
the Administrative Agent on or prior to, the Closing Date, as may be changed
from time to time by a resolution duly adopted by the board of directors of such
Credit Party or Subsidiary (or any committee thereof).
"IRS" means the United States Internal Revenue Service.
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the International Chamber of Commerce (or
such later version thereof as may be in effect at the time of such issuance.
"Issuer Documents" means with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Letter of Credit Obligor or in favor of the L/C
Issuer and relating to any such Letter of Credit.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
16
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Applicable
Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Borrowing.
"L/C Collateral" means each of the categories of collateral identified in
the definition of "Collateral Coverage Percentage," provided such collateral is
(x) capable of being marked-to-market on a weekly basis and (y) subject to a
perfected, first priority Lien in favor of the Administrative Agent for the
benefit of the L/C Issuer and the Lenders.
"L/C Collateral Balance" means, with respect to each Letter of Credit
Obligor, the sum of the Collateral Value of each type of L/C Collateral held in
a Custodial Account of such Letter of Credit Obligor multiplied by the
Collateral Coverage Percentage for such type of L/C Collateral.
"L/C Collateral Balance Report" means the report of each Letter of Credit
Obligor in the form of Exhibit G.
"L/C Conversion Notice" means the notice furnished by the Borrower to
convert Letters of Credit issued for the account of the Borrower from one Type
to another Type in the form of Exhibit F.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Wachovia in its capacity as an issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
Dollar Amount available to be drawn under of all outstanding Letters of Credit
plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.
For purposes of computing the amount available to be drawn under any Letter of
Credit, the Dollar Amount of such Letter of Credit shall be determined in
accordance with Section 1.6. For all purposes of this Agreement, if on any date
of determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
17
"Letter of Credit Expiration Date" means the day that is twelve months
after the Maturity Date (or, if such day is not a Business Day, the next
preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.3(i).
"Letter of Credit Obligors" means the Borrower and the Subsidiary Obligors.
"LIBOR" means, with respect to each LIBOR Loan comprising part of the same
Borrowing for any Interest Period, the rate per annum equal to (y) the rate of
interest (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) appearing on Telerate Page 3750 (or any successor page) or (z) if no such
rate is available, the rate of interest determined by the Administrative Agent
to be the rate or the arithmetic mean of rates (rounded upward, if necessary, to
the nearest 1/16 of one percentage point) at which Dollar deposits in
immediately available funds are offered to first-tier banks in the London
interbank eurodollar market, in each case under (y) and (z) above at
approximately 11:00 a.m., London time, two Business Days prior to the first day
of such Interest Period for a period substantially equal to such Interest Period
and in an amount substantially equal to the amount of Wachovia's LIBOR Loan
comprising part of such Borrowing.
"LIBOR Loan" means, at any time, any Revolving Loan that bears interest at
such time at a rate based on LIBOR.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"License" has the meaning specified in Section 5.17.
"Loan Documents" means this Agreement, each Note, each Issuer Document, the
Fee Letter, the Security Documents and all other documents executed and
delivered by Borrower to the Administrative Agent, the L/C Issuer or any Lender
in connection therewith.
"Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets or properties of the Borrower and its
Subsidiaries, taken as a whole.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent) or financial condition of the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of any
Credit Party to perform its obligations under any Loan Document to which it is a
party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Credit Party of any Loan Document to which
it is a party; provided, however, for the avoidance of any doubt, a Material
Adverse Effect shall not have occurred in the event of one or more claims with
respect to Reinsurance Agreements or Primary Policies issued by the Borrower or
any of its Subsidiaries in the ordinary course of their business that involve
potential liabilities after taxes that, individually or in the aggregate, do not
exceed 10% of Consolidated Net Worth.
18
"Material Subsidiary" means each of (i) each Subsidiary Obligor, (ii) at
the relevant time of determination, any other Subsidiary having (after the
elimination of intercompany accounts) (y) in the case of a non-Insurance
Subsidiary, (A) assets constituting at least ten percent (10%) of the total
assets of the Borrower and its Subsidiaries on a consolidated basis, (B)
revenues for the four quarters most recently ended constituting at least ten
percent (10%) of the total revenues of the Borrower and its Subsidiaries on a
consolidated basis, or (C) net income for the four quarters most recently ended
constituting at least ten percent (10%) of Consolidated Net Income, in each case
determined in accordance with GAAP as of the date of the GAAP financial
statements most recently delivered under Section 6.1(a) or Section 6.1(b) prior
to such time (or, with regard to determinations at any time prior to the initial
delivery of financial statements under Section 6.1, as of the date of the most
recent financial statements referred to in Section 5.5(a) and Section 5.5(b)),
or (z) in the case of an Insurance Subsidiary, (A) assets constituting at least
ten percent (10%) of the aggregate assets of all of the Insurance Subsidiaries,
or (B) gross written premiums for the four quarters most recently ended (or, if
not readily available, the fiscal year most recently ended) constituting at
least ten percent (10%) of the aggregate gross written premiums (without
duplication) of all of the Insurance Subsidiaries, in each case determined in
accordance with Statutory Accounting Practices as of the date of the statutory
financial statements most recently delivered under Section 6.1(c) or Section
6.1(d) prior to such time (or, with regard to determinations at any time prior
to the initial delivery of financial statements under Section 6.1, as of the
date of the most recent financial statements referred to in Section 5.5(c)) and
(iii) any Subsidiary that has any of the foregoing as a Subsidiary.
"Maturity Date" means September 23, 2008.
"Maximum Rate" has the meaning specified in Section 10.9.
"Moody's" means Xxxxx'x Investors Service and any successor thereto.
"Mortgage Backed Securities" means investment securities representing any
undivided interest or participation in or which are secured by, a pool of loans
secured by mortgages or deeds of trust.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in absence of the National Association of Insurance
Commissioners or such successor, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.
"Non-Extension Notice Date" has the meaning specified in Section
2.3(b)(iii).
"Northbridge Financial" means Northbridge Financial Corporation, a Canada
corporation.
19
"Note" means a promissory note made by the Borrower in favor of a Lender
evidencing the Revolving Loans made by such Lender, substantially in the form of
Exhibit B.
"OARC" has the meaning specified in the introductory paragraph hereto.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Credit Party arising under any Loan Document or
otherwise with respect to any Revolving Loan or Letter of Credit, whether direct
or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising and including interest
and fees that accrue after the commencement by or against any Credit Party or
any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
"OFAC" means the U.S. Department of the Treasury's Office of Foreign Assets
Control, and any successor thereto.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means (i) with respect to Revolving Loans on any date,
the aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Revolving Loans occurring on such
date; and (ii) with respect to any L/C Obligations on any date, the Dollar
Amount of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
Dollar Amount of the L/C Obligations as of such date, including as a result of
any reimbursements by the Borrower of Unreimbursed Amounts.
"Participant" has the meaning specified in Section 10.6(d).
"Participating Member State" means any member state of the European
Community that adopts or has adopted the Euro as its lawful currency in
accordance with the legislation of the European Union relating to the European
Monetary Union.
20
"PATRIOT Act" means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act
of 2001), as amended from time to time, and any successor statute, and all rules
and regulations from time to time promulgated thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Platform" has the meaning specified in Section 6.2.
"Pounds Sterling" means the lawful currency of the United Kingdom of Great
Britain and Northern Ireland.
"Primary Policies" means any insurance policies issued by an Insurance
Subsidiary.
"Private Placement Debt" means the indebtedness of the Borrower (a) in the
aggregate original principal amount of $100,000,000 under its senior notes
designated "7.49% Senior Notes Due November 30, 2006", each payable in
accordance with the respective terms of such notes and Note Purchase Agreement
entered into with respect thereto, (b) in the aggregate original principal
amount of $225,000,000 under its senior notes designated "7.65% Senior Notes Due
2013" and (c) in the aggregate original principal amount of $125,000,000 under
its senior notes designated "6.875% Senior Notes Due 2015", each payable in
accordance with the respective terms of such notes, indentures and note purchase
agreements entered into with respect thereto
"Public Lender" has the meaning specified in Section 6.2.
"Quarterly Statement" means the quarterly statutory financial statement of
any Insurance Subsidiary required to be filed with the Insurance Regulatory
Authority of its jurisdiction of incorporation or, if no specific form is so
required, in the form of financial statements permitted by such Insurance
Regulatory Authority to be used for filing quarterly statutory financial
statements and shall contain the type of financial information permitted by such
Insurance Regulatory Authority to be disclosed therein, together with all
exhibits, schedules, certificates and actuarial opinions required to be filed or
delivered therewith, prepared in accordance with Statutory Accounting Practices.
21
"Register" has the meaning specified in Section 10.6(c).
"Reinsurance Agreement" means any agreement, contract, treaty, certificate
or other arrangement whereby any Person agrees to transfer, cede or retrocede to
another insurer or reinsurer all or part of the liability assumed or assets held
by such Person under a policy or policies of insurance or reinsurance issued by
such Person.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Revolving Loans, a Revolving Loan Notice, and (b)
with respect to an L/C Credit Extension, a Letter of Credit Application.
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.2, Lenders holding in the
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations
being deemed "held" by such Lender for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, or controller of a Credit Party. Any document delivered
hereunder that is signed by a Responsible Officer of a Credit Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Credit Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Credit Party.
"Revaluation Date" means each of the following: (i) each date on which a
Letter of Credit denominated in a Foreign Currency is issued, (ii) each date on
which disbursement in a Foreign Currency is made under any Letter of Credit,
(iii) the last Business Day of each calendar month, (iv) the Maturity Date and
(v) such additional dates as the Administrative Agent shall specify.
"Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of LIBOR Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.1.
22
"Revolving Loan" has the meaning specified in Section 2.1.
"Revolving Loan Notice" means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a continuation
of LIBOR Loans, pursuant to Section 2.2(a), which, if in writing, shall be
substantially in the form of Exhibit A.
"S&P" means Standard & Poor's Insurance Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Sanctioned Country" means a country subject to a sanctions program
identified on the list maintained by OFAC and available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxx/xxxx/xxxxxxxxx/ index/html, or as otherwise
published from time to time by OFAC.
"Sanctioned Person" means (i) a Person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/ eotffc/ofac/sdn/index/html, or as otherwise
published from time to time by OFAC, or (ii) (A) an agency of the government of
a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or
(C) a Person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Secured Letter of Credit" means a Letter of Credit issued as, or converted
into, a Secured Letter of Credit pursuant to Section 2.3(b).
"Secured Letter of Credit Fee" has the meaning specified in Section 2.3(i).
"Security Agreement" means a Pledge and Security Agreement executed by the
Borrower and each of the Letter of Credit Obligors in favor of the
Administrative Agent, substantially in the form of Exhibit E.
"Security Documents" means, collectively, the Security Agreement and each
of the Account Control Agreements.
"Solvent" means, with respect to any Person, as of any date of
determination, that the fair value of the assets of such Person (at fair
valuation) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date, that the present fair saleable value of the assets of such
Person will, as of such date, be greater than the amount that will be required
to pay the probable liability of such Person on its debts as such debts become
absolute and matured, and that, as of such date, such Person will be able to pay
all liabilities of such Person as such liabilities mature and such Person does
not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
23
"SPC" has the meaning specified in Section 10.6(h).
"Spot Rate" means, with respect to any Foreign Currency, the rate quoted by
Wachovia as the spot rate for the purchase by Wachovia of such Foreign Currency
with Dollars through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made.
"Statutory Accounting Practices" means, with respect to any Insurance
Subsidiary, the statutory accounting practices prescribed or permitted by the
relevant Insurance Regulatory Authority of its state of domicile, consistently
applied and maintained and in conformity with those used in the preparation of
the most recent Historical Statutory Statements, as in effect from time to time,
subject to the provisions of Section 1.3.
"Statutory Surplus" means the total amount shown as "surplus as regards
policyholders" on line 35, column 1, page 3 of the Annual Statement of OARC.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Subsidiary Obligors" means, collectively, OARC, Clearwater, Clearwater
Select, Xxxxxx, Xxxxxx Specialty, HCNL and any other Person that joins this
Agreement upon the terms and conditions set forth in Section 2.14.
"Surplus Relief Reinsurance Agreement" means any agreement or other
arrangement whereby any Insurance Subsidiary cedes business under a reinsurance
agreement that would not be considered a transaction that indemnifies an insurer
against loss or liability relating to insurance risk, as determined in
accordance with Statement of Financial Accounting Standards No. 113 ("FAS 113")
issued by the Financial Accounting Standards Board.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement,
24
or any other master agreement (any such master agreement, together with any
related schedules, a "Master Agreement"), including any such obligations or
liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"TARGET Day" means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer payment system (or any successor settlement
system as determined by the Administrative Agent) is open for the settlement of
payments in Euro.
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Total Capitalization" means, as of any date of determination, the sum of
(i) Consolidated Net Worth as of such date and (ii) Consolidated Indebtedness as
of such date.
"Total Debt to Capitalization Ratio" means, as of any date of
determination, the ratio of (a) Consolidated Indebtedness as of such date to (b)
the sum of (i) Consolidated Indebtedness and (ii) Consolidated Net Worth, each
as of such date; provided, however, for purposes of calculating the Total Debt
to Capitalization Ratio, only the amount of any outstanding claim against any of
the Guarantees set forth in items 1, 2 and 3 on Schedule 7.3 which has not been
indemnified and paid by Fairfax within 10 days after such claim is made against
any of such Guarantees shall be included in the calculation of Consolidated
Indebtedness.
"Total Outstandings" means the aggregate Outstanding Amount of all
Revolving Loans and all L/C Obligations.
"Type" means, (i) with respect to a Revolving Loan, its character as a Base
Rate Loan or a LIBOR Loan and (ii) with respect to a Letter of Credit, its
character as a Secured Letter of Credit or an Unsecured Letter of Credit.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets,
25
determined in accordance with the assumptions used for funding the Pension Plan
pursuant to Section 412 of the Code for the applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.3(c)(i).
"Unsecured Letter of Credit" means each Letter of Credit designated as an
Unsecured Letter of Credit by the Administrative Agent pursuant to Section
2.3(m)(ii).
"Unsecured Letter of Credit Fee" has the meaning specified in Section
2.3(i).
"Utilization Fee" has the meaning specified in Section 2.8(b).
"Wachovia" means Wachovia Bank, National Association and its successors.
"Wholly Owned Subsidiary" means any Person in which (other than directors'
qualifying shares or similar interests required by law) 100% of the Equity
Interests of each class having ordinary voting power, and 100% of the Equity
Interests of every other class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of record, by the
Borrower, or by one or more Wholly Owned Subsidiaries, or both.
SECTION 1.2 OTHER INTERPRETIVE PROVISIONS.With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein," "hereof" and
"hereunder" and words of similar import when used in any Loan Document, shall be
construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
26
(b) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(c) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
SECTION 1.3 ACCOUNTING TERMS.
(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP or
Statutory Accounting Practices, as the case may be, applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.
(b) Changes in GAAP or Statutory Accounting Practices. If at any time any
change in GAAP or Statutory Accounting Practices, as the case may be, would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP or Statutory Accounting Practices, as the case
may be, (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP or Statutory Accounting Practices, as the case may be,
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP or Statutory Accounting
Practices, as the case may be.
SECTION 1.4 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
SECTION 1.5 TIMES OF DAY. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
SECTION 1.6 LETTER OF CREDIT AMOUNTS. Unless otherwise specified herein,
the amount of a Letter of Credit at any time shall be deemed to mean be the
stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or the
terms of any Letter of Credit Application related thereto, provides for one or
more automatic increases in the stated amount thereof, the amount of such Letter
of Credit shall be deemed to be the maximum stated amount of such Letter of
Credit after giving effect to all such increases, whether or not such maximum
stated amount is in effect at such time.
27
SECTION 1.7 EXCHANGE RATES; CURRENCY EQUIVALENTS.
(a) The Administrative Agent shall determine the Spot Rates as of each
Revaluation Date to be used for calculating the Dollar Amounts of Letters of
Credit denominated in a Foreign Currency and other amounts outstanding under
this Agreement denominated in Foreign Currencies. Such Spot Rates shall become
effective as of such Revaluation Date and shall be the Spot Rates employed in
converting any amounts between the applicable currencies until the next
Revaluation Date to occur. Except as otherwise provided herein, the applicable
amount of any currency for purposes of this Agreement and the other Loan
Documents shall be such Dollar Amount as so determined by the Administrative
Agent.
(b) Wherever in this Agreement, in connection with any Foreign Currency
Letter of Credit, an amount is expressed in Dollars, such amount shall be the
relevant Foreign Currency Equivalent of such Dollar Amount (rounded as nearly as
practicable to the nearest number of whole units of such Foreign Currency), as
determined by the Administrative Agent.
(c) Determinations by the Administrative Agent pursuant to this Section
shall be conclusive absent manifest error.
SECTION 1.8 REDENOMINATION OF CERTAIN FOREIGN CURRENCIES AND COMPUTATION OF
DOLLAR AMOUNTS.
(a) Each obligation of any party hereto to make a payment denominated in
Pounds Sterling shall be redenominated into Euros at the time Great Britain
adopts the Euro as its lawful currency after the date hereof. If the basis of
accrual of interest expressed in this Agreement in respect of Pounds Sterling
shall be inconsistent with any convention or practice in the London interbank
market for the basis of accrual of interest in respect of the Euro, such
expressed basis shall be replaced by such convention or practice with effect
from the date on which Great Britain adopts the Euro as its lawful currency.
(b) Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect the adoption of the Euro by Great Britain
and any relevant market conventions or practices relating to the Euro.
(c) References herein to minimum Dollar Amounts and integral multiples
stated in Dollars, where they shall also be applicable to Foreign Currency,
shall be deemed to refer to approximate Foreign Currency Equivalents. Wherever
in this Agreement an amount, such as a minimum or maximum limitation on
Indebtedness permitted to be incurred or Investments permitted to be made
hereunder, is expressed in Dollars, it shall be deemed to refer to the Dollar
Amount thereof.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
SECTION 2.1 REVOLVING LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Revolving
Loan") to the
28
Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided, however, that after giving effect to any
Revolving Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount
of all L/C Obligations, shall not exceed such Lender's Commitment. Within the
limits of each Lender's Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.1, prepay under
Section 2.4, and reborrow under this Section 2.1. Revolving Loans may be Base
Rate Loans or LIBOR Loans, as further provided herein.
SECTION 2.2 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF REVOLVING LOANS.
(a) Each Revolving Borrowing, each conversion of Revolving Loans from one
Type to the other, and each continuation of LIBOR Loans shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of LIBOR Loans or of any conversion
of LIBOR Loans to Base Rate Loans, and (ii) not later than 11:00 a.m. on the
requested date of any Borrowing of Base Rate Loans. Each telephonic notice by
the Borrower pursuant to this Section 2.2(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Revolving Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing of, conversion to or continuation of LIBOR Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Except as provided in Section 2.3(c), each Borrowing of or conversion
to Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Revolving Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a
Revolving Borrowing, a conversion of Revolving Loans from one Type to the other,
or a continuation of LIBOR Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Revolving Loans to be borrowed, converted or
continued, (iv) the Type of Revolving Loans to be borrowed or to which existing
Revolving Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If the Borrower fails to specify a Type of
Revolving Loan in a Revolving Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable
Revolving Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable LIBOR Loans.
If the Borrower requests a Borrowing of, conversion to, or continuation of LIBOR
Loans in any such Revolving Loan Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Revolving Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Applicable Percentage of
the applicable Revolving Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Revolving Borrowing,
each Lender shall make the amount of its Revolving Loan available to the
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Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.2 (and, if such Borrowing is the initial Credit
Extension, Section 4.1), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Wachovia with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrower; provided, however, that
if, on the date the Revolving Loan Notice with respect to such Borrowing is
given by the Borrower, there are L/C Borrowings outstanding, then the proceeds
of such Borrowing, first, shall be applied to the payment in full of any such
L/C Borrowings, and second, shall be made available to the Borrower as provided
above.
(c) Except as otherwise provided herein, a LIBOR Loan may be continued or
converted only on the last day of an Interest Period for such LIBOR Loan. During
the existence of a Default, no Loans may be requested as, converted to or
continued as LIBOR Loans without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for LIBOR Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Wachovia's prime rate used in determining the Base Rate
promptly following the public announcement of such change.
(e) After giving effect to all Revolving Borrowings, all conversions of
Revolving Loans from one Type to the other, and all continuations of Revolving
Loans as the same Type, there shall not be more than ten Interest Periods in
effect with respect to Revolving Loans.
SECTION 2.3 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this Section 2.3, (1) from time to time on any Business Day during
the period from the Closing Date until the Maturity Date, to issue Secured
and Unsecured Letters of Credit for the account of the Borrower and to
issue Secured Letters of Credit for the account of any Subsidiary Obligor,
and to amend or extend Letters of Credit previously issued by it, in
accordance with subsection (b) below, and (2) to honor drawings under the
Letters of Credit; and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Letter of Credit Obligors
and any drawings thereunder; provided that after giving effect to any L/C
Credit Extension with respect to any Letter of Credit, (y) the Total
Outstandings shall not exceed the Aggregate Commitments and (z) the
aggregate Outstanding Amount of the Revolving Loans of any Lender, plus
such Lender's Applicable Percentage of the Outstanding Amount of all L/C
Obligations shall not exceed such Lender's Commitment. Each request by a
Letter of Credit Obligor for the issuance or amendment of a Letter of
Credit shall be deemed to be a representation by such Letter
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of Credit Obligor that the L/C Credit Extension so requested complies with
the conditions set forth in the proviso to the preceding sentence. Within
the foregoing limits, and subject to the terms and conditions hereof, each
Letter of Credit Obligor's ability to obtain Letters of Credit shall be
fully revolving, and accordingly the Letter of Credit Obligors may, during
the foregoing period, obtain Letters of Credit to replace Letters of Credit
that have expired or that have been drawn upon and reimbursed. Each Letter
of Credit issued for the account of any Subsidiary Obligor shall be a
Secured Letter of Credit and shall comply with the provisions of Section
2.3(l) hereof throughout the entire term of such Letter of Credit. Letters
of Credit issued for the account of the Borrower may be Secured Letters of
Credit or Unsecured Letters of Credit, at the Borrower's option. The
Borrower may convert a Letter of Credit from one Type to the other upon
notice to the Administrative Agent in accordance with Section 2.3(b)(v).
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.3(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance or last extension, unless the Required Lenders
have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.
(iii) The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good xxxxx
xxxxx material to it;
(B) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and
the L/C Issuer, such Letter of Credit is in an initial stated amount
less than $200,000; provided that Clearwater Select may request the
issuance of up to four Letters of Credit in an initial stated amount
not less than $50,000;
(D) such Letter of Credit is to be denominated in a currency
other than Dollars or a Foreign Currency;
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(E) such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; or
(F) a default of any Lender's obligations to fund under Section
2.3(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory
arrangements with the applicable Letter of Credit Obligor or such
Lender to eliminate the L/C Issuer's risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C
Issuer would not be permitted at such time to issue such Letter of Credit
in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B)
the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith,
and the L/C Issuer shall have all of the benefits and immunities (A)
provided to the Administrative Agent in ARTICLE IX with respect to any acts
taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and Letter of Credit
Applications pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in ARTICLE IX included the L/C Issuer with
respect to such acts or omissions, and (B) as additionally provided herein
with respect to the L/C Issuer.
(b) Procedures for Issuance, Conversion and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(i) The issuance or amendment of each Letter of Credit shall be made
upon the request of a Letter of Credit Obligor delivered to the L/C Issuer
(with a copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
such Letter of Credit Obligor. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than
11:00 a.m. at least two Business Days (or such later date and time as the
Administrative Agent and the L/C Issuer may agree in a particular instance
in their sole discretion) prior to the proposed issuance date, date of
amendment or date of conversion, as the case may be. In the case of a
request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; (G) in the case of a Letter
of Credit issued for the account of the Borrower, the Type of Letter of
Credit; (H)
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the Applicable Currency of such Letter of Credit; and (I) such other
matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer
(I) the Letter of Credit to be amended; (II) the proposed date of amendment
thereof (which shall be a Business Day); (III) the nature of the proposed
amendment; and (IV) such other matters as the L/C Issuer may require.
Additionally, the applicable Letter of Credit Obligor shall furnish to the
L/C Issuer and the Administrative Agent with respect to the issuance of any
Secured Letter of Credit an L/C Collateral Balance Report not later than
11:00 a.m. on the Business Day immediately preceding the date of issuance
confirming that the L/C Collateral Balance of such Letter of Credit Obligor
after giving effect to the issuance of the requested Secured Letter of
Credit is not less than the aggregate L/C Obligations of such Letter of
Credit Obligor.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the applicable Letter of Credit Obligor and, if
not, the L/C Issuer will provide the Administrative Agent with a copy
thereof. Unless the L/C Issuer has received written notice from any Lender,
the Administrative Agent or any Credit Party, at least one Business Day
prior to the requested date of issuance or amendment of the applicable
Letter of Credit, that one or more applicable conditions contained in
ARTICLE IV shall not then be satisfied, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the applicable Letter of Credit Obligor
or enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall
be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit
in an amount equal to the product of such Lender's Applicable Percentage
times the stated amount of such Letter of Credit.
(iii) If the applicable Letter of Credit Obligor so requests in any
applicable Letter of Credit Application, the L/C Issuer may, in its sole
and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an "Auto-Extension Letter of
Credit"); provided that any such Auto-Extension Letter of Credit must
permit the L/C Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a
day (the "Non-Extension Notice Date") in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, the applicable Letter of Credit
Obligor shall not be required to make a specific request to the L/C Issuer
for any such extension. Once an Auto-Extension Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the L/C Issuer shall not permit any such
extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter
of Credit in its revised form (as extended) under the terms hereof (by
reason of the provisions of clause (ii) or clause (iii)
33
of Section 2.3(a) or otherwise), or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is five Business
Days before the Non-Extension Notice Date (1) from the Administrative Agent
that the Required Lenders have elected not to permit such extension or (2)
from the Administrative Agent, any Lender or any Letter of Credit Obligor
that one or more of the applicable conditions specified in Section 4.2 is
not then satisfied, and in each such case directing the L/C Issuer not to
permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the
applicable Letter of Credit Obligor and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment.
(v) The Borrower may request the conversion of a Letter of Credit
issued for its account from one Type to another Type by delivering a L/C
Conversion Notice to the Administrative Agent (with a copy to the L/C
Issuer), appropriately completed and signed by a Responsible Officer of the
Borrower, not later than 11:00 a.m. at least two Business Days prior to the
proposed effective date of such conversion, provided that (A) the Borrower
shall have delivered on the Business Day immediately preceding the proposed
date of conversion an L/C Collateral Balance Report confirming that the L/C
Collateral Balance of the Borrower after giving effect to the conversion of
the requested Letter of Credit is not less than the aggregate L/C
Obligations of the Borrower and (B) the L/C Issuer shall not have received
notice (which may be by telephone or in writing) on or before the proposed
date of conversion from the Administrative Agent, any Lender or any Credit
Party that one or more of the applicable conditions specified in Section
4.2 is not then satisfied.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Letter of Credit Obligor that requested the issuance of such
Letter of Credit and the Administrative Agent thereof. Not later than 11:00
a.m. on the date of any payment by the L/C Issuer under a Letter of Credit
(each such date, an "Honor Date"), such Letter of Credit Obligor shall
reimburse the L/C Issuer through the Administrative Agent in an amount in
Dollars equal to the Dollar Amount of such drawing. If such Letter of
Credit Obligor fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor Date,
the Dollar Amount of the unreimbursed drawing (the "Unreimbursed Amount"),
and the amount of such Lender's Applicable Percentage thereof. In such
event, the Borrower shall be deemed to have requested a Revolving Borrowing
of Base Rate Loans to be disbursed on the Honor Date in a Dollar Amount
equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.2 for the principal amount of Base Rate
Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.2 (other than the
delivery of a Revolving Loan Notice). Any notice given by the L/C Issuer or
the Administrative Agent pursuant to this Section 2.3(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of
34
such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(ii) Each Lender shall upon any notice pursuant to Section 2.3(c)(i)
make funds in Dollars available to the Administrative Agent for the account
of the L/C Issuer at the Administrative Agent's Office in a Dollar Amount
equal to its Applicable Percentage of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section
2.3(c)(iii), each Lender that so makes funds available shall be deemed to
have made a Base Rate Loan to the Borrower in such Dollar Amount. The
Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Borrowing of Base Rate Loans because the
conditions set forth in Section 4.2 cannot be satisfied or for any other
reason, the Letter of Credit Obligor for whose account such Letter of
Credit was issued shall be deemed to have incurred from the L/C Issuer an
L/C Borrowing in the Dollar Amount of the Unreimbursed Amount that is not
so refinanced, which L/C Borrowing shall be due and payable on demand in
Dollars (together with interest) and shall bear interest at the Default
Rate. In such event, each Lender's payment to the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.3(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.3.
(iv) Until each Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.3(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's
Applicable Percentage of such amount shall be solely for the account of the
L/C Issuer.
(v) Each Lender's obligation to make Revolving Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.3(c), shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, any Credit Party or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make
Revolving Loans pursuant to this Section 2.3(c) is subject to the
conditions set forth in Section 4.2 (other than delivery by the Borrower of
a Revolving Loan Notice). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of such Letter of Credit Obligor to
reimburse the L/C Issuer for the Dollar Amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.3(c) by the
time specified in Section 2.3(c)(ii), the L/C Issuer shall be entitled to
recover from such Lender (acting through the
35
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such
payment is immediately available to the L/C Issuer at a rate per annum
equal to the greater of the Federal Funds Rate and a rate determined by the
L/C Issuer in accordance with banking industry rules on interbank
compensation. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under
this clause (vi) shall be conclusive absent manifest error.
(vii) Without limiting any other obligations of any of the Credit
Parties hereunder, each Letter of Credit Obligor hereby agrees to indemnify
each Lender in respect of any Letter of Credit denominated in a Foreign
Currency issued for its account for any and all costs, expenses and losses
reasonably incurred by such Lender as a result of receiving payment or
reimbursement for any disbursement thereunder from any Person in a currency
other than Dollars. Any such amount payable to any Lender shall be payable
within 10 days after demand by the Administrative Agent.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.3(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the applicable Letter of Credit Obligor or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its
Applicable Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.3(c)(i) is required to be
returned under any of the circumstances described in Section 10.5
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Applicable Percentage thereof on demand of
the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute. The obligation of each Letter of Credit Obligor
to reimburse the L/C Issuer for each drawing under each Letter of Credit issued
for such Letter of Credit Obligor's account and the obligation of each Letter of
Credit Obligor to repay the L/C Borrowing with respect to each Letter of Credit
issued for such Letter of Credit Obligor's account shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:
36
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that any Letter of Credit Obligor may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting), the
L/C Issuer or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Letter of Credit Obligor.
The Letter of Credit Obligor shall promptly examine a copy of each Letter of
Credit issued for its account and each amendment thereto that is delivered to it
and, in the event of any claim of noncompliance with the Letter of Credit
Obligor's instructions or other irregularity, the Letter of Credit Obligor will
immediately notify the L/C Issuer. Such Letter of Credit Obligor shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and each Letter of Credit Obligor
agrees that, in paying any drawing under a Letter of Credit, the L/C Issuer
shall not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document. Neither
the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable to any Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Letter of Credit Application. Each Letter of Credit Obligor hereby
assumes all risks of the acts or omissions of
37
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude each Letter of Credit Obligor from pursuing such rights and remedies as
it may have against the beneficiary or transferee at law or under any other
agreement. Neither the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the
L/C Issuer, shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.3(e); provided, however, that anything in
such clauses to the contrary notwithstanding, a Letter of Credit Obligor may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to a
Letter of Credit Obligor, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by a Letter of Credit
Obligor which such Letter of Credit Obligor proves were caused by the L/C
Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) Cash or Cash Collateral. Upon the request of the Administrative Agent,
(i) if, an Event of Default has occurred and is continuing, or (ii) if, as of 7
days prior to the Maturity Date, any L/C Obligation for any reason remains
outstanding, the Letter of Credit Obligors shall, in each case, immediately (A)
Cash Collateralize the then Outstanding Amount of all L/C Obligations or (B)
otherwise fully secure the then Outstanding Amount of all L/C Obligations by
delivering to the Custodian L/C Collateral in an amount equal to the Collateral
Value of such L/C Collateral multiplied by the Collateral Coverage Percentage
for such type of L/C Collateral. Section 2.4 and Section 8.2(c) set forth
certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this Section 2.3, Section 2.4 and Section 8.2(c), "Cash
Collateralize" means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders); provided that such
cash shall be multiplied by the applicable Collateral Coverage Percentage.
Derivatives of such term have corresponding meanings. The Letter of Credit
Obligors hereby grant to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash Collateral of
each Letter of Credit Obligor shall be maintained in a separate blocked,
non-interest bearing deposit account at Wachovia.
(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C
Issuer and the Letter of Credit Obligor when a Letter of Credit is issued, the
rules of the ISP shall apply to each Letter of Credit.
(i) Letter of Credit Fees. Each Letter of Credit Obligor shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage a fee (collectively, the "Letter of Credit Fee") (i) for
each Secured Letter of Credit
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issued for such Letter of Credit Obligor's account equal to 0.275% per annum
times the daily maximum amount available to be drawn under such Secured Letter
of Credit (whether or not such maximum amount is then in effect under such
Letter of Credit) (the "Secured Letter of Credit Fee"), and (ii) for each
Unsecured Letter of Credit issued for the Borrower's account equal to the
Applicable Rate for LIBOR Loans times the average daily stated amount available
to be drawn under such Unsecured Letter of Credit (the "Unsecured Letter of
Credit Fee"). For purposes of computing the daily amount available to be drawn
under any Letter of Credit, the Dollar Amount of such Letter of Credit shall be
determined in accordance with Section 1.6. Letter of Credit Fees shall be (i)
computed on a quarterly basis in arrears and (ii) due and payable on the last
Business Day of each fiscal quarter, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily amount available to be drawn under
each Unsecured Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of the Required Lenders, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate. For
purposes of calculating the Letter of Credit Fee, for any day that there is a
Collateral Deficiency with respect to a Secured Letter of Credit such Secured
Letter of Credit will be deemed to be an Unsecured Letter of Credit on such day.
(j) Facing Fee and Documentary and Processing Charges Payable to L/C
Issuer. Each Letter of Credit Obligor shall pay directly to the L/C Issuer for
its own account a facing fee with respect to each Letter of Credit, at the rate
per annum specified in the Fee Letter, computed on the daily amount available to
be drawn under such Letter of Credit and on a quarterly basis in arrears, and
due and payable on the last Business Day of each fiscal quarter, commencing with
the first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.6. In addition, each Letter of Credit Obligor shall pay directly to the L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
(l) Letters of Credit Issued for Subsidiary Obligors. Notwithstanding that
a Letter of Credit issued or outstanding hereunder may be in support of any
Obligations of, or is for the account of, a Subsidiary Obligor, the Borrower
shall be jointly and severally obligated to reimburse the L/C Issuer and the
Lenders hereunder for any and all drawings under such Letters of Credit. The
Borrower hereby acknowledges that the issuance of Letters of Credit for the
account of any Subsidiary Obligor inures to the benefit of the Borrower, and
that the Borrower's business derives substantial benefits from the businesses of
such Subsidiary Obligors. The joint and several obligation of the Borrower under
this Section 2.3(l) shall be absolute and unconditional and shall remain in full
force and effect until the entire Obligations shall have been paid, and, until
such payment has been made, shall not be discharged, affected, modified or
39
impaired on the occurrence from time to time of any event, including, without
limitation, any of the following, whether or not with notice to or the consent
of any Credit Party:
(i) the waiver, compromise, settlement, release, termination or
amendment (including, without limitation, any extension or postponement of
the time for payment or performance or renewal or refinancing) of any or
all of the Obligations of any of the Credit Parties under any Loan
Document;
(ii) the failure to give notice to any or all of the Credit Parties of
a Default or an Event of Default under any Loan Document;
(iii) the release, substitution or exchange by the Administrative
Agent or the Lenders of any L/C Collateral or Cash Collateral securing any
of the Obligations (whether with or without consideration) or the
acceptance by the Administrative Agent or the Lenders of any additional
collateral or the availability or claimed availability of any other
collateral or source of repayment or any nonperfection or impairment of any
collateral;
(iv) the release of any Person primarily or secondarily liable for all
or any part of the Obligations, whether by the Administrative Agent or the
Lenders or in connection with any voluntary or involuntary liquidation,
dissolution, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors or similar event or proceeding affecting any or all of
the Credit Parties or any other Person who, or any of whose property, shall
at the time in question be obligated in respect of the Obligations or any
part thereof; or
(v) to the extent permitted by law, any other event, occurrence,
action or circumstance that would, in the absence of this clause (v),
result in the release or discharge of the Borrower from the performance or
observance of any Obligation, covenant or agreement contained in this
Agreement.
The joint and several obligations of the Borrower to the L/C Issuer and the
Lenders under this Section 2.3(l) shall remain in full force and effect (or be
reinstated) until the L/C Issuer and the Lenders have received payment in full
of all Obligations and the expiration of any applicable preference or similar
period pursuant to any proceeding under Debtor Relief Laws, without any claim
having been made before the expiration of such period asserting an interest in
all or any part of any payments received by the L/C Issuer or any Lender.
The Borrower expressly agrees that (x) the L/C Issuer or the Lenders shall
not be required first to institute any suit or to exhaust its remedies against
any of the Subsidiary Obligors or any other Person or against any Collateral to
become liable hereunder, in order to enforce the obligations of the Borrower
under this Section 2.3(l) and (y) notwithstanding the occurrence of any of the
foregoing, the Borrower shall be and remain directly and primarily liable for
all sums due under each Letter of Credit issued for the account of any
Subsidiary Obligor. On disposition by the Administrative Agent or the Lenders of
any Collateral to satisfy the Obligations, the Borrower shall be and shall
remain jointly and severally liable for any deficiency.
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(m) Secured Letters of Credit.
(i) Prior to the issuance of any Secured Letter of Credit, the
applicable Letter of Credit Obligor shall have pledged and deposited with
or delivered to the Custodian for deposit in its Custodial Account L/C
Collateral pursuant to the Security Documents so that the L/C Collateral
Balance of the applicable Letter of Credit Obligor shall not be less than
the aggregate L/C Obligations attributable to such Letter of Credit Obligor
after giving effect to such issuance; provided that no L/C Collateral
(including, without limitation, cash) shall be included in the calculation
of the L/C Collateral Balance of such Letter of Credit Obligor unless the
Administrative Agent has a first lien perfected Lien on and security
interest in such L/C Collateral. Each Letter of Credit Obligor hereby
grants to the Administrative Agent, for the benefit of the L/C Issuer and
the Lenders, a security interest in all L/C Collateral and all proceeds of
the foregoing to secure all obligations of such Letter of Credit Obligor
hereunder in respect of Secured Letters of Credit issued for its account.
(ii) If, at any time, (A) the L/C Collateral Balance for any Letter of
Credit Obligor is less than the aggregate L/C Obligations attributable to
such Letter of Credit Obligor (a "Collateral Deficiency"), such Letter of
Credit Obligor shall no later than 14 days from the date of notice thereof
by the Administrative Agent, pledge additional L/C Collateral to cure such
Collateral Deficiency, provided that until such Collateral Deficiency is
cured, such Letter of Credit Obligor may not request any Letters of Credit
to be issued, extended or amended for its account. If such Letter of Credit
Obligor fails to pledge additional L/C Collateral to cure its Collateral
Deficiency within the time provided above, the Administrative Agent may
immediately (A) designate such Secured Letter of Credit an Unsecured Letter
of Credit and (B) exercise its rights and remedies set forth in Section
8.2(b) hereof, including without limitation, liquidating all or part of the
L/C Collateral.
SECTION 2.4 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Revolving Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior
to any date of prepayment of LIBOR Loans and (B) on the date of prepayment of
Base Rate Loans; (ii) any prepayment of LIBOR Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and
(iii) any prepayment of Base Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if
less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of
Revolving Loans to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender's Applicable Percentage of such prepayment. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a LIBOR Loan shall be accompanied by all accrued interest on
the amount prepaid, together with any additional amounts required
41
pursuant to Section 3.5. Each such prepayment shall be applied to the Revolving
Loans of the Lenders in accordance with their respective Applicable Percentages.
(b) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Revolving Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section
2.4(b) unless after the prepayment in full of the Revolving Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.
SECTION 2.5 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 11:00
a.m. five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, and (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments. The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to such Lender's Applicable Percentage. All
fees accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.
SECTION 2.6 REPAYMENT OF REVOLVING LOANS. The Borrower shall repay to the
Lenders on the Maturity Date the aggregate principal amount of Revolving Loans
outstanding on such date.
SECTION 2.7 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each LIBOR Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to LIBOR for such Interest Period plus
the Applicable Rate; and (ii) each Base Rate Revolving Loan shall bear interest
on the outstanding principal amount thereof from the applicable borrowing date
at a rate per annum equal to the Base Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Revolving Loan is not paid when
due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Revolving Loan)
payable by the Borrower under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, then upon the request of the
Required Lenders, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.
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(iii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Revolving Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
SECTION 2.8 FEES. In addition to certain fees described in subsections (i)
and (j) of Section 2.3:
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a
commitment fee (the "Commitment Fee") equal to the Applicable Rate for such fee
times the actual daily amount by which the Aggregate Commitments exceed the
Total Outstandings. The Commitment Fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in ARTICLE IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date.
(b) Utilization Fee. The Borrower shall pay to the Administrative Agent,
for the account of each Lender, a utilization fee (the "Utilization Fee")
payable for each day that the aggregate Outstanding Amount of Revolving Loans is
greater than 50% of the Aggregate Commitments then in effect (or, if terminated,
in effect immediately prior to such termination), including at any time during
which one or more of the conditions in Section 4.2 is not met. The Utilization
Fee shall be computed at a per annum rate equal to the Applicable Percentage in
effect for such fee from time to time on such Lender's Applicable Percentage of
the average daily Outstanding Amount of Revolving Loans. The Utilization Fee
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter, commencing with the first such date to occur after the Closing
Date through the Maturity Date.
(c) Other Fees.
(i) The Borrower shall pay to the Arranger, the L/C Issuer and the
Administrative Agent, for their own respective accounts, fees in the
amounts and at the times specified in the Fee Letter. Such fees shall be
fully earned when paid and shall not be refundable for any reason
whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
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SECTION 2.9 COMPUTATION OF INTEREST AND FEES. All computations of interest
for Base Rate Loans when the Base Rate is determined by Wachovia's "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Revolving Loan for the day on which
the Revolving Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Revolving Loan or such portion is paid,
provided that any Revolving Loan that is repaid on the same day on which it is
made shall, subject to Section 2.11(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.10 EVIDENCE OF DEBT.
(a) The Revolving Loans made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive, absent manifest
error as to the amount of the Revolving Loans made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Revolving Loans in addition to such accounts or records.
Each Lender may attach schedules to its Note and endorse thereon the date, Type
(if applicable), amount and maturity of its Revolving Loans and payments with
respect thereto.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.
SECTION 2.11 PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK.
(a) General. All payments to be made by the Credit Parties shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Credit Parties hereunder shall be made to the Administrative Agent, for the
account of the respective Lenders to which such payment is owed, at the
Administrative Agent's Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office. All
44
payments received by the Administrative Agent after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. If any payment to be made by any Credit Party shall
come due on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.
(b) Funding by Lenders; Presumption by Administrative Agent.
(i) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Revolving Borrowing that such
Lender will not make available to the Administrative Agent such Lender's
share of such Revolving Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.2 and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Revolving Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon,
for each day from and including the date such amount is made available to
the Borrower to but excluding the date of payment to the Administrative
Agent, at (A) in the case of a payment to be made by such Lender, the
greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (B) in the case of a payment to be made by the Borrower,
the interest rate applicable to Base Rate Loans. If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.
If such Lender pays its share of the applicable Revolving Borrowing to the
Administrative Agent, then the amount so paid shall constitute such
Lender's Revolving Loan included in such Revolving Borrowing. Any payment
by the Borrower shall be without prejudice to any claim the Borrower may
have against a Lender that shall have failed to make such payment to the
Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from any Credit
Party prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the L/C Issuer hereunder that such
Credit Party will not make such payment, the Administrative Agent may
assume that such Credit Party has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute
to the Lenders or the L/C Issuer, as the case may be, the amount due. In
such event, if such Credit Party has not in fact made such payment, then
each of the Lenders or the L/C Issuer, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the L/C Issuer, in immediately available
funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.
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A notice of the Administrative Agent to any Lender or any Credit Party with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available
to the Administrative Agent funds for any Revolving Loan to be made by such
Lender as provided in the foregoing provisions of this ARTICLE II, and such
funds are not made available to the Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in ARTICLE IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Revolving Loans, to fund participations in Letters of Credit
and to make payments pursuant to Section 10.4(c) are several and not joint. The
failure of any Lender to make any Revolving Loan, to fund any such participation
or to make any payment under Section 10.4(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Revolving Loan, to purchase its participation or to make
its payment under Section 10.4(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Revolving Loan in any particular place or manner or
to constitute a representation by any Lender that it has obtained or will obtain
the funds for any Revolving Loan in any particular place or manner.
SECTION 2.12 SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of the Revolving Loans made by
it, or the participations in L/C Obligations held by it resulting in such
Lender's receiving payment of a proportion of the aggregate amount of such
Revolving Loans or participations and accrued interest thereon greater than its
Applicable Percentage thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Revolving Loans and
subparticipations in L/C Obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with their Applicable
Percentage, provided that:
(i) if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations or subparticipations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to
(x) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of
its Revolving Loans or subparticipations
46
in L/C Obligations to any assignee or participant, other than to the
Borrower or any Subsidiary thereof (as to which the provisions of this
Section shall apply).
The Credit Parties consent to the foregoing and agree that any Lender acquiring
a participation pursuant to the foregoing arrangements may, to the extent such
Lender may effectively do so under applicable law, exercise against such Credit
Party rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Credit Party in the
amount of such participation.
SECTION 2.13 INCREASE IN COMMITMENTS.
(a) Request for Increase. Provided there exists no Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), the Borrower
may from time to time, request an increase in the Aggregate Commitments by an
amount (for all such requests) not exceeding $50,000,000; provided that (i) any
such request for an increase shall be in a minimum amount of $25,000,000 and
(ii) immediately after giving effect to any such increase, (y) the Aggregate
Commitments shall not exceed $200,000,000 and (z) the aggregate amount of all
increases effected under this Section 2.13 shall not exceed $50,000,000. At the
time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent and
the L/C Issuer (which approvals shall not be unreasonably withheld), the
Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel.
(d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the "Increase Effective Date") and
the final allocation of such increase. The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase and
the Increase Effective Date.
(e) Conditions to Effectiveness of Increase. As a condition precedent to
such increase, the Borrower shall deliver to the Administrative Agent a
certificate of each Credit Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of such
Credit Party (i) certifying and attaching the resolutions adopted by such Credit
Party approving or consenting to such increase, and (ii) in the case of the
Borrower,
47
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in ARTICLE V and the other Loan
Document which are qualified as to materiality are true and correct, and the
representations and warranties which are not qualified as to materiality are
true and correct in all material respects, in each case on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.13, the representations and warranties contained in subsections (a)
and (b) of Section 5.5 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.1, and (B)
no Default exists. The Borrower shall prepay any Revolving Loans outstanding on
the Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.5) to the extent necessary to keep the outstanding Revolving Loans
ratable with any revised Applicable Percentages arising from any nonratable
increase in the Commitments under this Section.
(f) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.12 or Section 10.1 to the contrary.
SECTION 2.14 ADDITION OF SUBSIDIARY OBLIGORS. The Borrower may from time to
time after the Closing Date designate one or more Subsidiaries as an additional
Subsidiary Obligor, provided such Subsidiaries are reasonably acceptable to the
Administrative Agent. The effective date of any designation of an additional
Subsidiary Obligor shall be the date upon which each of the conditions set forth
in Section 4.2 and the following terms and conditions shall have been satisfied
or waived with respect to such Subsidiary, in accordance with the terms of this
Agreement (the "Designation Date"):
(i) On or prior to the applicable Designation Date, each such Person
shall enter into an appropriately completed Assumption Agreement; and
(ii) On or prior to the applicable Designation Date, the
Administrative Agent shall have received from such Person, (A) the items
required to be delivered under Section 4.1(a) with respect to such Person
in substantially the same form delivered to the Administrative Agent on the
Closing Date and the substance of such items to be reasonably satisfactory
to the Administrative Agent and the Lenders and (B) such other information
and documents as reasonably requested by the Administrative Agent.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.1 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Credit Parties hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if any Credit Party shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or
48
the L/C Issuer, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the applicable Credit Party
shall make such deductions and (iii) the applicable Credit Party shall timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) Payment of Other Taxes by the Borrower. Without limiting the provisions
of subsection (a) above, the Credit Parties shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Credit Parties. Each Credit Party shall
indemnify the Administrative Agent, each Lender and the L/C Issuer, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
applicable Credit Party by a Lender or the L/C Issuer (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Credit Party to a Governmental
Authority, such Credit Party shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
49
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a "controlled foreign corporation" described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender
or the L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by any
Credit Party or with respect to which any Credit Party has paid additional
amounts pursuant to this Section, it shall pay to such Credit Party an amount
equal to such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the L/C Issuer, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that such Credit
Party, upon the request of the Administrative Agent, such Lender or the L/C
Issuer, agrees to repay the amount paid over to such Credit Party (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the L/C Issuer in the
event the Administrative Agent, such Lender or the L/C Issuer is required to
repay such refund to such Governmental Authority. This subsection shall not be
construed to require the Administrative Agent, any Lender or the L/C Issuer to
make available its tax returns (or any other information relating to its taxes
that it deems confidential) to any Credit Party or any other Person.
SECTION 3.2 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund LIBOR
Loans, or to determine or charge interest rates based upon LIBOR, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
LIBOR Loans or to convert Base Rate Loans to LIBOR Loans shall be suspended
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Borrower shall, upon demand from such Lender
50
(with a copy to the Administrative Agent), prepay or, if applicable, convert all
LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such
LIBOR Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBOR Loans. Upon any such prepayment or conversion,
the Borrower shall also pay accrued interest on the amount so prepaid or
converted.
SECTION 3.3 INABILITY TO DETERMINE RATES. If the Required Lenders determine
that for any reason in connection with any request for a LIBOR Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such LIBOR Loan, (b) adequate and reasonable means
do not exist for determining LIBOR for any requested Interest Period with
respect to a proposed LIBOR Loan, or (c) LIBOR for any requested Interest Period
with respect to a proposed LIBOR Loan does not adequately and fairly reflect the
cost to such Lenders of funding such LIBOR Loan, the Administrative Agent will
promptly so notify the Borrower and each Lender. Thereafter, the obligation of
the Lenders to make or maintain LIBOR Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of LIBOR Loans or, failing
that, will be deemed to have converted such request into a request for a
Revolving Borrowing of Base Rate Loans in the amount specified therein.
SECTION 3.4 INCREASED COSTS.
(a) Increased Costs Generally. If any Change in Law shall
(i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in
by, any Lender (except any reserve requirement contemplated by Section
3.4(e)) or the L/C Issuer;
(ii) subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Loan made by it, or change
the basis of taxation of payments to such Lender or the L/C Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.1 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
LIBOR Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such LIBOR Loan), or to increase the cost to such Lender or the L/C
Issuer of participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender, or the
L/C
51
Issuer hereunder (whether of principal, interest or any other amount) then upon
request of such Lender or the L/C Issuer, the Borrower will pay to such Lender
or the L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the L/C Issuer determines that
any Change in Law affecting such Lender or the L/C Issuer or any Lending Office
of such Lender or such Lender's or the L/C Issuer's holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the L/C Issuer's capital or on the capital of such
Lender's or the L/C Issuer's holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Revolving Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender's or the L/C Issuer's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's or
the L/C Issuer's policies and the policies of such Lender's or the L/C Issuer's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer or
such Lender's or the L/C Issuer's holding company for any such reduction
suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or the L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrower shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the
L/C Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender's or the L/C Issuer's right
to demand such compensation, provided that the Borrower shall not be required to
compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender or the L/C Issuer, as the case
may be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or the L/C Issuer's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
(e) Reserves on LIBOR Loans. The Borrower shall pay to each Lender, as long
as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as "Eurocurrency liabilities"), additional interest on the
unpaid principal amount of each LIBOR Loan equal to the actual costs of such
reserves allocated to such LIBOR Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such LIBOR Loan,
provided the Borrower shall have received at least 10 days' prior notice (with a
copy to the Administrative Agent) of such additional interest from such Lender.
If a Lender fails to give notice 10 days prior to the relevant
52
Interest Payment Date, such additional interest shall be due and payable 10 days
from receipt of such notice.
SECTION 3.5 COMPENSATION FOR LOSSES. Upon demand of any Lender (with a copy
to the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any LIBOR Loan
on a day other than the last day of the Interest Period for such LIBOR Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Revolving Loan) to prepay, borrow, continue or convert any
LIBOR Loan on the date or in the amount notified by the Borrower; or
(c) any assignment of a LIBOR Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
Section 10.13;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such LIBOR
Loan or from fees payable to terminate the deposits from which such funds were
obtained. The Borrower shall also pay any customary administrative fees charged
by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.5, each Lender shall be deemed to have funded each LIBOR Loan
made by it at LIBOR for such LIBOR Loan by a matching deposit or other borrowing
in the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such LIBOR Loan was in fact so funded.
SECTION 3.6 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.4, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.1, or if any Lender gives a notice pursuant to
Section 3.2, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Revolving Loans hereunder or
to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.1
or Section 3.4, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 3.2, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.4, or if the Borrower is required to pay any additional amount to any
Lender or any
53
Governmental Authority for the account of any Lender pursuant to Section 3.1,
the Borrower may replace such Lender in accordance with Section 10.13.
SECTION 3.7 SURVIVAL. All of the obligations of the Credit Parties under
this ARTICLE III shall survive termination of the Aggregate Commitments and
repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
SECTION 4.1 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of the
L/C Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of each
Credit Party (other than HCNL), each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Administrative Agent and each
of the Lenders:
(i) executed counterparts of this Agreement, the Security Agreement
and the Account Control Agreements with the applicable Custodian for each
Custodial Account, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;
(ii) a Revolving Note executed by the Borrower in favor of each Lender
requesting a Revolving Note;
(iii) (A) a copy of the Organization Documents of each Credit Party,
certified (if available) as of a recent date by the Secretary of State or
similar official of its respective state or similar jurisdiction of
organization, and a certificate as to the good standing of each Credit
Party, from such Secretary of State or similar official, as of a recent
date; (B) a certificate of the Secretary or Assistant Secretary of each
Credit Party dated the Closing Date and certifying (I) that the
Organization Documents of such Credit Party have not been amended since the
date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (A) above; (II) that attached thereto
is a true and complete copy of by-laws or similar constitutive documents of
such Credit Party as in effect on the Closing Date and at all times since a
date prior to the date of the resolutions described in clause (III) below,
(III) that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors or similar governing body of each Credit
Party authorizing the execution, delivery and performance of the Loan
Documents and the Credit Extensions hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and
effect; and (IV) as to the incumbency and specimen signature of each
Responsible Officer executing any Loan Document or any other document
delivered in connection herewith on behalf of such Credit Party; (C) a
certificate of another officer of each Credit Party as to the incumbency
54
and specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to clause (B) above; and (D) such other documents
as the Administrative Agent may reasonably request;
(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Credit Party is duly organized or
formed, and that each of the Credit Parties is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;
(v) a favorable opinion of (x) Xxxxxx X. Xxxxx, counsel to the
Borrower, OARC, Clearwater and Clearwater Select and (y) Xxxxx X. Xxxxxx,
counsel to Xxxxxx and Xxxxxx Specialty, each addressed to the
Administrative Agent and each Lender, as to the matters concerning the
Credit Parties and the Loan Documents as the Required Lenders may
reasonably request;
(vi) a certificate of a Responsible Officer of each Credit Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by such
Credit Party and the validity against such Credit Party of the Loan
Documents to which it is a party, and such consents, licenses and approvals
shall be in full force and effect, or (B) stating that no such consents,
licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Section 4.2(a) and (b) have
been satisfied, and (B) that there has been no event or circumstance since
the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;
(viii) a duly completed Compliance Certificate as of the last day of
the fiscal quarter of the Borrower most recently ended prior to the Closing
Date, signed by a Responsible Officer of the Borrower;
(ix) all documents and instruments, including Uniform Commercial Code
financing statements where applicable, required by law in each applicable
jurisdiction or reasonably requested by the Administrative Agent to be
filed, registered or recorded to create or perfect the Liens intended to be
created under the Security Agreement;
(x) results of a recent search of the Uniform Commercial Code (or
equivalent) filings made with respect to each Credit Party in the
jurisdictions contemplated in clause (ix) above and in such other
jurisdictions in which Collateral is located on the Closing Date which may
be reasonably requested by the Administrative Agent, and copies of the
financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent that the Liens
indicated by such financing statements (or similar documents) are permitted
by the Loan Documents or have been released; and
55
(xi) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer or the Required
Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid
all fees, charges and disbursements of counsel to the Administrative Agent to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).
(d) (i) All principal, interest and other amounts outstanding under the
Credit Agreement dated as of September 27, 2004 among the Borrower, Bank of
America, N.A. as Administrative Agent and L/C Issuer and the other lenders party
thereto (the "Existing Senior Credit Facility") shall be repaid and satisfied in
full and all guarantees by any Credit Party relating thereto extinguished, (ii)
all commitments to extend credit under the agreements and instruments relating
to the Existing Senior Credit Facility shall be terminated, (iii) any Liens
securing the Existing Senior Credit Facility shall be released and any related
filings (including UCC filings) terminated of record (or arrangements
satisfactory to the Administrative Agent made therefor), and (iv) any letters of
credit outstanding under the Existing Senior Credit Facilities for which any
Credit Party is obligated shall have been terminated, canceled, replaced or
fully collateralized; and the Administrative Agent shall have received evidence
of the foregoing satisfactory to it, including an escrow agreement or payoff
letter executed by the lenders or the agent under the Existing Senior Credit
Facility.
Without limiting the generality of the provisions of Section 9.4, for purposes
of determining compliance with the conditions specified in this Section 4.1,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto. If no such notice has been received by the Administrative
Agent from any Lender, then upon receipt of the signature pages of each party
hereto, the Administrative Agent shall notify the Credit Parties and the Lenders
of the Closing Date, and such notice shall be conclusive and binding.
SECTION 4.2 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to honor any Request for Credit Extension (other than a Revolving Loan
Notice requesting only a conversion of Revolving Loans to the other Type, or a
continuation of LIBOR Loans or a Letter of Credit Application requesting only a
conversion of a Secured Letter of Credit issued for the account of the Borrower
to an Unsecured Letter of Credit) is subject to the following conditions
precedent:
(a) The representations and warranties of each Credit Party contained in
ARTICLE V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith which are
qualified as to materiality shall be true and correct, and the representations
and warranties which are not qualified as to materiality shall
56
be true and correct in all material respects, in each case on and as of the date
of such Credit Extension, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date, and except that for purposes of this
Section 4.2, the representations and warranties contained in subsections (a) and
(b) of Section 5.5 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.1.
(b) No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds thereof.
(c) With respect to any Revolving Borrowing, the limitation of amounts set
forth in Section 2.1 will not be exceeded immediately after giving effect
thereto.
(d) With respect to any L/C Extension, the limitation on amounts set forth
in Section 2.3(a) will not be exceeded immediately after giving effect thereto
and the applicable conditions in Section 2.3(a) and Section 2.3(b) will have
been satisfied.
(e) The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for Credit Extension in accordance with the requirements
hereof.
(f) HCNL may not make any Request for Credit Extension, and the L/C Issuer
shall have no obligation to honor any such Request for Credit Extension, until
HCNL has delivered to the Administrative Agent all items specified to be
delivered by each Credit Party in Section 4.1(a) (including, for purposes of
clarification, a favorable opinion of counsel addressed to the Administrative
Agent and each Lender, as to the matters concerning HCNL and the Loan Documents
as the Required Lenders may reasonably request), all such items to be in form
and substance reasonably satisfactory to the Administrative Agent and the
Lenders.
Each Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of Revolving Loans to the other Type or a continuation of
LIBOR Loans) submitted by any Credit Party shall be deemed to be a
representation and warranty that the conditions specified in Section 4.2(a)
through Section 4.2(d) have been satisfied on and as of the date of the
applicable Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants, solely with respect to itself
(provided that the Borrower represents and warrants with respect to all matters
set forth in Section 5.5), to the Administrative Agent and the Lenders that:
SECTION 5.1 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Such
Credit Party and each Subsidiary thereof (a) is duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i)
own its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is
57
licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license, and (d) is in compliance with all Laws;
except in each case referred to in clause (b)(i), (c) or (d), to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.2 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by such Credit Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law. Such Credit Party and each Subsidiary thereof is in
compliance with all Contractual Obligations referred to in clause (b)(i), except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.3 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, such Credit Party of this Agreement or any other Loan Document.
SECTION 5.4 BINDING EFFECT. This Agreement has been, and each other Loan
Document to which such Credit Party is a party, when delivered hereunder, will
have been, duly executed and delivered by such Credit Party. This Agreement
constitutes, and each other Loan Document to which such Credit Party is a party
when so delivered will constitute, a legal, valid and binding obligation of such
Credit Party, enforceable against such Credit Party in accordance with its
terms.
SECTION 5.5 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries dated June 30, 2005, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Borrower
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and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 5.5 sets
forth all material indebtedness and other liabilities, direct or contingent, of
the Borrower and its consolidated Subsidiaries as of the date of such financial
statements, including liabilities for taxes, material commitments and
Indebtedness.
(c) The Borrower has heretofore furnished to the Administrative Agent
copies of the Annual Statements of each of the Insurance Subsidiaries as of
December 31, 2004, and the Quarterly Statements of each of the Insurance
Subsidiaries as of June 30, 2005, each as filed with the relevant Insurance
Regulatory Authority (collectively, the "Historical Statutory Statements"). The
Historical Statutory Statements (including, without limitation, the provisions
made therein for investments and the valuation thereof, reserves, policy and
contract claims and statutory liabilities) have been prepared in accordance with
Statutory Accounting Practices, were in compliance with applicable Requirements
of Law when filed and present fairly the financial condition of the respective
Insurance Subsidiaries covered thereby as of the respective dates thereof and
the results of operations, changes in capital and surplus and cash flow of the
respective Insurance Subsidiaries covered thereby for the respective periods
then ended. Except for liabilities and obligations disclosed or provided for in
the Historical Statutory Statements (including, without limitation, reserves,
policy and contract claims and statutory liabilities), no Insurance Subsidiary
had, as of the date of its respective Historical Statutory Statements, any
material liabilities or obligations of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due) that, in accordance with
Statutory Accounting Practices, would have been required to have been disclosed
or provided for in such Historical Statutory Statements. All books of account of
each Insurance Subsidiary fully and fairly disclose all of its material
transactions, properties, assets, investments, liabilities, and obligations, are
in its possession and are true, correct and complete in all material respects.
(d) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
SECTION 5.6 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of such Credit Party after due and
diligent investigation, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against such Credit
Party or any of its Subsidiaries or against any of their properties or revenues
that (a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
SECTION 5.7 NO DEFAULT. Neither such Credit Party nor any of its
Subsidiaries is in default under or with respect to any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. No Default has occurred and is continuing or
would result from the consummation by such Credit Party of the transactions
contemplated by this Agreement or any other Loan Document.
SECTION 5.8 OWNERSHIP OF PROPERTY; LIENS. Each of such Credit Party and
each of its Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in,
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all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of such
Credit Party and its Subsidiaries is subject to no Liens, other than Liens
permitted by Section 7.1.
SECTION 5.9 INSURANCE. The properties of such Credit Party and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where such Credit
Party or the applicable Subsidiary operates, except as could reasonably be
expected to have a Material Adverse Effect.
SECTION 5.10 TAXES. Such Credit Party and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP or Statutory
Accounting Practices, as applicable. There is no proposed tax assessment against
such Credit Party or any of its Subsidiaries that would, if made, have a
Material Adverse Effect. Except as set forth in Schedule 5.10, neither any
Credit Party nor any Subsidiary thereof is party to any tax sharing agreement.
SECTION 5.11 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of such Credit Party, nothing has occurred which would prevent, or
cause the loss of, such qualification. The Borrower and each ERISA Affiliate has
made all required contributions to each Plan of such Credit Party subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of such Credit Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has (x) failed to meet the minimum funding requirements of
Section 412 of the Code or (y) any Unfunded Pension Liability that could
reasonably be expected to result in a Material Adverse Effect; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
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the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
SECTION 5.12 SUBSIDIARIES; EQUITY INTERESTS. As of the Closing Date, such
Credit Party has no Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 5.12, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by such Credit Party in the amounts specified on Part (a) of Schedule 5.12
free and clear of all Liens. Other than (i) stock and other instruments traded
on national exchanges and (ii) equity investments in a corporation or an entity
totaling less than 10% of outstanding Equity Interests of such corporation or
entity, such Credit Party has no equity investments in any other corporation or
entity other than those specifically disclosed in Part (b) of Schedule 5.12. All
of the outstanding Equity Interests in such Credit Party have been validly
issued and are fully paid and nonassessable.
SECTION 5.13 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) Such Credit Party is not engaged and will not engage, principally or as
one of such Credit Party's important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock.
Following the application of the proceeds of each Borrowing or drawing under
each Letter of Credit, not more than 25% of the value of the assets (either of
such Credit Party only or of such Credit Party and its Subsidiaries on a
consolidated basis) subject to the provisions of Section 7.1 or Section 7.6 or
subject to any restriction contained in any agreement or instrument between such
Credit Party and any Lender or any Affiliate of any Lender relating to
Indebtedness and within the scope of Section 8.1(e) will be margin stock.
(b) None of such Credit Party, any Person Controlling such Credit Party, or
any Subsidiary of such Credit Party (i) is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an "investment company" under the Investment Company Act of 1940.
SECTION 5.14 DISCLOSURE. No report, financial statement, certificate or
other information furnished (whether in writing or orally) by or on behalf of
such Credit Party or any of its Subsidiaries to the Administrative Agent or any
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document to which such Credit Party or such Subsidiary is a party (in each case,
as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to
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projected financial information, such Credit Party represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 5.15 COMPLIANCE WITH LAWS. Each of such Credit Party and each of
its Subsidiaries is in compliance in all material respects with the requirements
of all Laws (including Environmental Laws) and all orders, writs, injunctions
and decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
SECTION 5.16 SOLVENT. Such Credit Party is, and such Credit Party and its
Subsidiaries are on a consolidated basis, Solvent.
SECTION 5.17 LICENSES. Schedule 5.17 lists, with respect to such Credit
Party or any Subsidiary of such Credit Party that is an Insurance Subsidiary, as
of the Closing Date, all of the jurisdictions in which such Credit Party or such
Subsidiary holds licenses (including, without limitation, licenses or
certificates of authority from relevant Insurance Regulatory Authorities),
permits or authorizations to transact insurance and reinsurance business
(collectively, the "Licenses"), and indicates the line or lines of insurance in
which each such Credit Party is permitted to be engaged with respect to each
License therein listed. No License, the loss of which could reasonably be
expected to have a Material Adverse Effect, is the subject of proceeding for
suspension, revocation or limitation or any similar proceedings. To such Credit
Party's knowledge, there is no sustainable basis for such a suspension,
revocation or limitation, and no such suspension, revocation or limitation is
threatened by any relevant Insurance Regulatory Authority. None of such Credit
Party nor any of its Subsidiaries transacts as of the Closing Date any insurance
business, directly or indirectly, in any jurisdiction other than those listed on
Schedule 5.18 with respect to such Credit Party or such Subsidiary, where such
business requires any license, permit or other authorization of an Insurance
Regulatory Authority of such jurisdiction, where such conduct could reasonably
be expected to have a Material Adverse Effect.
SECTION 5.18 REINSURANCE AGREEMENTS.
(a) Except as set forth on Schedule F to the Annual Statements for the
Insurance Subsidiaries for the fiscal year ending December 31, 2004 as updated
by Schedule F to the June 30, 2005 financial statements, there are no material
liabilities outstanding as of the Closing Date under any Reinsurance Agreement
to which such Credit Party or any of its Subsidiaries is a party. (i) Each
Reinsurance Agreement to which such Credit Party or any of its Subsidiaries is a
Party is in full force and effect; (ii) none of such Credit Party or such
Subsidiary or, to the knowledge of such Credit Party, any other party thereto,
is in breach of or default under any such contract; and (iii) such Credit Party
or such Subsidiary has no reason to believe that the financial condition of any
other party to any such contract is impaired such that a default thereunder by
such party could reasonably be anticipated, except to the extent in the case of
clauses (i), (ii) and (iii) immediately preceding where such failure to be in
full force or effect or such breach or default could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
Reinsurance Agreement to which such Credit Party or such Subsidiary is a
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party is qualified under all applicable Requirements of Law to receive the
statutory credit assigned to such Reinsurance Agreement in the relevant Annual
or Quarterly Statement at the time prepared, except where the failure to be so
qualified could not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect. Except as set forth on Schedule 5.18, as of June
30, 2005, each Person to whom such Credit Party or such Subsidiary has ceded any
material liability pursuant to any Reinsurance Agreement to which such Credit
Party is a party on the Closing Date either: (i) had a rating of "A-" or better
by A.M. Best or S&P or (ii) had provided collateral in favor of such Credit
Party of the type and in an amount described in Schedule 5.18.
(b) Except as set forth on Schedule 5.18, there are no Reinsurance
Agreements or Insurance Agreements between such Credit Party or any of its
Subsidiaries and Affiliates (other than the Borrower and its Subsidiaries.)
(c) As of the Closing Date, if such Credit Party is an Insurance
Subsidiary, such Credit Party has no reinsured obligations under any Surplus
Relief Reinsurance Agreement.
SECTION 5.19 OFAC; ANTI-TERRORISM LAWS.
(a) None of such Credit Party or any Subsidiary of such Credit Party (i) is
a Sanctioned Person, (ii) has more than 15% of its assets in Sanctioned
Countries, or (iii) derives more than 15% of its operating income from
investments in, or transactions with, Sanctioned Persons or Sanctioned
Countries. No part of the proceeds of any Credit Extension hereunder will be
used directly or indirectly by such Credit Party or Subsidiary to fund any
operations in, finance any investments or activities in or make any payments to,
a Sanctioned Person or a Sanctioned Country.
(b) Neither the making of the Revolving Loans or the issuance of Letters of
Credit, as applicable, hereunder to such Credit Party nor the use of the
proceeds thereof by such Credit Party will violate the PATRIOT Act, the Trading
with the Enemy Act, as amended, or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto. Such
Credit Party is in compliance in all material respects with the PATRIOT Act.
SECTION 5.20 SECURITY DOCUMENTS. The Security Documents to which such
Credit Party is a party create a valid and enforceable security interest in and
Lien upon all right, title and interest of such Credit Party that in and to the
Collateral purported to be pledged by it thereunder and described therein,
superior to and prior to the rights of all third persons and subject to no other
Liens except as specifically permitted therein. No filings or recordings are
required in order to ensure the enforceability, perfection or priority of the
security interests created under the Security Documents to which such Credit
Party is a party, except for filings or recordings which shall have been
previously made; provided, that HCNL represents and warrants that the delivery
of the prescribed particulars of charge in the prescribed form to the Registrar
of Companies of England and Wales are required in order to ensure the
enforceability, perfection or priority of the security interests created under
the Security Documents to which HCNL is a party.
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SECTION 5.21 WITHHOLDING TAXES. The payments by or on account of the
Obligations of any Credit Party will not be subject, by withholding or
deduction, to any Taxes imposed by a Credit Party Jurisdiction.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Revolving
Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any
Letter of Credit shall remain outstanding, the Borrower shall, and shall (except
in the case of the covenants set forth in Section 6.1, Section 6.2 and Section
6.3) cause each Subsidiary to:
SECTION 6.1 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 90 days (or, if earlier
and applicable to the Borrower, the annual report deadline under the Exchange
Act rules and regulations) after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal year, and the related consolidated statements of income,
comprehensive income, stockholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated statements to be audited and accompanied by a report and opinion of
an independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit;
(b) as soon as available, but in any event within 45 days (or, if earlier
and applicable to the Borrower, the quarterly report deadline under the Exchange
Act rules and regulations) after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated statements of income, comprehensive income, stockholders'
equity and cash flows for such fiscal quarter and for the portion of the
Borrower's fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail, such consolidated statements to be certified by a Responsible
Officer of the Borrower as fairly presenting the financial condition, results of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;
(c) upon the earlier of (i) 15 days after the regulatory filing date or
(ii) 65 days after the end of each fiscal year, an Annual Statement of each
Insurance Subsidiary as of the end of such fiscal year and for the fiscal year
then ended, in the form filed with the relevant Insurance Regulatory Authority,
prepared in accordance with Statutory Accounting Practices;
64
(d) upon the earlier of (i) 10 days after the regulatory filing date or
(ii) 60 days after the end of each of the first three fiscal quarters of each
fiscal year, a Quarterly Statement of each Insurance Subsidiary as of the end of
such fiscal quarter and for that portion of the fiscal year then ended, in the
form filed with the relevant Insurance Regulatory Authority, prepared in
accordance with Statutory Accounting Practices;
(e) promptly upon filing with the relevant Insurance Regulatory Authority
and in any event within 90 days after the end of each fiscal year, beginning
with the fiscal year ended December 31, 2004, a copy of each Insurance
Subsidiary's "Statement of Actuarial Opinion" (or equivalent information should
the relevant Insurance Regulatory Authority not require such a statement) as to
the adequacy of such Insurance Subsidiary's loss reserves for such fiscal year,
together with a copy of its management discussion and analysis in connection
therewith, each in the format prescribed by the applicable insurance laws of
such Insurance Subsidiary's jurisdiction of domicile.
As to any information contained in materials furnished pursuant to Section
6.2(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
SECTION 6.2 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.1(a) and Section 6.1(b), a duly completed Compliance Certificate
signed by a Responsible Officer of the Borrower;
(b) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters (along with all
attachments, appendices or written recommendations included therewith) submitted
to the board of directors (or the audit committee of the board of directors) of
the Borrower by independent accountants in connection with the accounts or books
of the Borrower or any Subsidiary, or any audit of any of them, in each case
where such reports or letters are Material;
(c) promptly after the same are available, copies of each annual report,
proxy or financial statement or other Material report or Material communication
sent to the stockholders of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower may
file or be required to file with the SEC under Section 13 or 15(d) of the
Securities Exchange Act of 1934, and not otherwise required to be delivered to
the Administrative Agent pursuant hereto;
(d) promptly after the furnishing thereof, copies of any Material statement
or Material report furnished to any holder of debt securities of any Credit
Party or any Subsidiary thereof pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to the
Lenders pursuant to Section 6.1 or any other clause of this Section 6.2;
65
(e) promptly, and in any event within five Business Days after receipt
thereof by any Credit Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Credit Party or any Subsidiary thereof and where
Borrower in its reasonable discretion determines that such investigation,
possible investigation or other inquiry is Material;
(f) promptly upon the sending or filing thereof, copies of any "internal
control" letter filed by or on behalf of the Borrower or any of its Subsidiaries
with any Insurance Regulatory Authority which is Material;
(g) within 60 days of a request of the Administrative Agent at the
direction of the Required Lenders (which absent a showing of good cause shall
not be more often that one time during any twelve-month period), at the
Borrower's expense, an actuarial review of the liabilities and other items of
each Insurance Subsidiary prepared by an actuary or a firm of actuaries
reasonably acceptable to the Administrative Agent, such actuarial review to be
in form and substance reasonably acceptable to the Required Lenders;
(h) promptly after the same are available, all Material reports on
examination or similar Material reports, Material financial examination reports
or Material market conduct examination reports by the NAIC or any Insurance
Regulatory Authority or other Governmental Authority with respect to any
Insurance Subsidiary's insurance business, and all Material filings made under
applicable state insurance holding company acts by the Borrower or any of its
Subsidiaries, including, without limitation, filings seeking approval of
transactions with Affiliates; and
(i) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary (including, without
limitation, financial, actuarial and other information with respect to
Reinsurance Agreements), or compliance with the terms of the Loan Documents, as
the Administrative Agent or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.1(a) or Section
6.1(b) or Section 6.2(c) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.2; or (ii)
on which such documents are posted on the Borrower's behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding
66
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.2(a)
to the Administrative Agent. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders and the L/C Issuer materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, "Borrower Materials") by posting the Borrower Materials on
SyndTrak or another similar electronic system (the "Platform") and (b) certain
of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a "Public Lender"). The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that
the word "PUBLIC" shall appear prominently on the first page thereof; (x) by
marking Borrower Materials "PUBLIC," the Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger, the L/C Issuer and the
Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked "PUBLIC" are permitted to be made available through a portion of the
Platform designated "Public Investor;" and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor."
SECTION 6.3 NOTICES. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any announcement by S&P of any downward change in the Debt Rating;
(e) of any announcement by A.M. Best of any downward change in the
Financial Strength Rating of any Insurance Subsidiary;
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(f) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary;
(g) the receipt by the Borrower or any of its Subsidiaries from any
Insurance Regulatory Authority or other Governmental Authority of (A) any notice
asserting any failure by the Borrower or any of its Subsidiaries to be in
compliance with applicable Requirements of Law, or that threatens the taking of
any action against the Borrower or such Subsidiary, or sets forth circumstances,
if taken or adversely determined, that would be reasonably likely to have a
Material Adverse Effect, or (B) any notice of an actual or threatened
suspension, limitation or revocation of, failure to renew, or imposition of any
restraining order, escrow or impoundment of funds in connection with, any
license, permit, accreditation or authorization of the Borrower or any of its
Subsidiaries, where such action or inaction would be reasonably likely to have a
Material Adverse Effect;
(h) the occurrence of any actual change in any insurance statute or
regulation governing the investment or dividend practices of any Insurance
Subsidiary that would be reasonably likely to have a Material Adverse Effect;
(i) (i) the occurrence of any material amendment or modification to any
Reinsurance Agreement (whether entered into before or after the Closing Date),
including any such agreements that are in a runoff mode on the Closing Date,
which amendment or modification would be reasonably likely to have a Material
Adverse Effect, or (ii) the receipt by the Borrower or any of its Subsidiaries
of any written notice of any denial of coverage, litigation, claim or
arbitration arising out of any Reinsurance Agreement to which it is a party
which would reasonably be likely to have a Material Adverse Effect; or
(j) any judicial or administrative order limiting or controlling the
insurance business of any Insurance Subsidiary (and not the insurance industry
generally) which has been issued or adopted and which has had, or which could
reasonably be expected to have, a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.3(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
SECTION 6.4 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP or Statutory Accounting Practices, as the case may be, are being
maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if
unpaid, would by law become a Lien upon its property unless the same are being
contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP or Statutory Accounting Practices, as
the case may be, are being maintained by the Borrower or such Subsidiary other
than Liens arising pursuant to ERISA; and (c) all Indebtedness, as and
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when due and payable, but subject to any subordination provisions contained in
any instrument or agreement evidencing such Indebtedness.
SECTION 6.5 PRESERVATION OF EXISTENCE, ETC. Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.4 or Section 7.6; (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
SECTION 6.6 MAINTENANCE OF PROPERTIES. Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted
and make all necessary repairs thereto and renewals and replacements thereof,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; provided that this Section shall not prevent the
Borrower or any Subsidiary from discontinuing the operation and the maintenance
of any of its properties if such discontinuance is desirable in the conduct of
its business and the Borrower has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 6.7 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
SECTION 6.8 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.9 BOOKS AND RECORDS. Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP or Statutory
Accounting Practices, as the case may be, consistently applied shall be made of
all financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be; and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrower or
such Subsidiary, as the case may be.
SECTION 6.10 INSPECTION RIGHTS. Permit representatives and agents of the
Administrative Agent and each Lender, at the Administrative Agent's or Lender's
expense (but at the Borrower's expense after the occurrence and during the
continuance of an Event of Default), to visit and inspect any of its properties,
to examine its corporate, financial and
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operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
employees and, with the prior written consent of the Borrower prior to the
occurrence and continuance of an Event of Default (which consent shall not be
unreasonably withheld), the independent public accountants of the Borrower, all
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that when an Event of Default exists the Administrative Agent or any
Lender (or any of their respective representatives or agents) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
SECTION 6.11 USE OF PROCEEDS. Use the proceeds of (i) the Credit Extensions
for general corporate purposes not in contravention of any Law or of any Loan
Document and (ii) Letters of Credit to support insurance or reinsurance
liabilities of any Insurance Subsidiary.
SECTION 6.12 DIVIDENDS. Take all action necessary to cause its Subsidiaries
to make such dividends, distributions, or other payments to the Borrower as
shall be necessary for the Borrower to make payments of the Obligations. In the
event the approval of any Governmental Authority or other Person is required in
order for any such Subsidiary to make any such dividends, distributions or other
payments to the Borrower, or for the Borrower to make any such principal or
interest payments, the Borrower will forthwith exercise its best efforts and
take all actions permitted by law and necessary to obtain such approval.
SECTION 6.13 OFAC, PATRIOT ACT COMPLIANCE. The Borrower will, and will
cause each of its Subsidiaries to, (i) refrain from doing business in a
Sanctioned Country or with a Sanctioned Person in violation of the economic
sanctions of the United States administered by OFAC, and (ii) provide, to the
extent commercially reasonable, such information and take such actions as are
reasonably requested by the Administrative Agent or any Lender in order to
assist the Administrative Agent and the Lenders in maintaining compliance with
the PATRIOT Act.
SECTION 6.14 COLLATERAL.
(a) Pursuant to the Security Documents and as collateral security for the
payment and performance of the L/C Obligations in respect of Secured Letters of
Credit issued on its account, each Credit Party shall grant and convey, or cause
to be granted and conveyed, to the Administrative Agent for its benefit and the
benefit of the Lenders, a Lien and security interest in, to and upon the
Collateral.
(b) Subject to Section 2.3(g), each Credit Party shall at all times cause
its respective L/C Collateral Balance to equal or exceed the sum of the
aggregate principal amount of L/C Obligations attributable to Secured Letters of
Credit issued for its account.
(c) Each Credit Party shall deliver or cause to be delivered to the
Administrative Agent a certificate executed by an Responsible Officer of such
Credit Party, in the form of Exhibit G or otherwise in a form reasonably
satisfactory to the Administrative Agent (which form may vary depending on the
frequency of the delivery of such certificate and subject to the review and
verification by the Administrative Agent), setting forth the aggregate L/C
Obligations attributable to such Credit Party, the fair market value of the L/C
Collateral deposited in its
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Custodial Account by category and in the aggregate, the calculation of the L/C
Collateral Balance and such other information as the Administrative Agent may
reasonably request (such certificate, a "L/C Collateral Balance Report"), (A) on
the Business Day immediately preceding the proposed date of issuance of a
Secured Letter of Credit or the conversion by the Borrower of a Letter of Credit
issued on its account from one Type to another Type, (B) within 10 Business Days
after the end of each calendar month, (C) at and as of such other times as the
Administrative Agent may reasonably request in its sole discretion and (D) at
such other times as the Credit Parties may reasonably request.
SECTION 6.15 FURTHER ASSURANCES. Each of the Credit Parties shall, and
shall cause each of their respective Subsidiaries to, make, execute, endorse,
acknowledge and deliver any amendments, modifications or supplements hereto and
restatements hereof and any other agreements, instruments or documents, and take
any and all such other actions, as may from time to time be reasonably requested
by the Administrative Agent or the Required Lenders to perfect and maintain the
validity and priority of the Liens granted pursuant to the Security Documents
and to effect, confirm or further assure or protect and preserve the interests,
rights and remedies of the Administrative Agent and the Lenders under this
Agreement and the other Loan Documents.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Revolving
Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any
Letter of Credit shall remain outstanding, the Borrower shall not, nor shall it
permit any Subsidiary to, directly or indirectly:
SECTION 7.1 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.1 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed,
and (iv) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.3(b);
(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
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(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.1(h) or securing appeal or other surety bonds
related to such judgments;
(i) Liens consisting of deposits made by an Insurance Subsidiary with the
Insurance Regulatory Authority in its jurisdiction of domicile or other
statutory Liens or claims imposed or required by applicable insurance Law or
regulation against the assets of any Insurance Subsidiary, in each case in favor
of all policyholders of such Insurance Subsidiary and in the ordinary course of
such Insurance Subsidiary's business;
(j) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Borrower or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Borrower or any Subsidiary at the time such property is so acquired (whether or
not the Indebtedness secured thereby shall have been assumed), provided that no
such Lien shall have been created or assumed in contemplation of such
consolidation or merger or such Person's becoming a Subsidiary or such
acquisition of property;
(k) Liens entered into in the ordinary course of business of a Subsidiary's
insurance or reinsurance business with respect to trust agreements; and
(l) Liens (other than Liens specified in clauses (a) through (k) above) on
other than stock of any Insurance Subsidiary securing other Obligations of the
Borrower and its Subsidiaries not to exceed $25,000,000 in aggregate at any one
time outstanding.
SECTION 7.2 INVESTMENTS. Make any Investments in (a) Fairfax, Xxxx &
Xxxxxxx, Northbridge Financial, TIG Insurance Group, TIG Insurance Company, ORH
Holdings, Inc., Fairfax Financial (US) LLC, United States Fire Insurance Company
or Fairfax Inc. or their respective Affiliates and Subsidiaries (other than the
Borrower and its Subsidiaries) or (b) debt and equity securities of Fairfax,
Xxxx & Xxxxxxx, Northbridge Financial, TIG Insurance Group, TIG Insurance
Company, ORH Holdings, Inc., Fairfax Financial (US) LLC, United States Fire
Insurance Company or Fairfax Inc. or their respective Affiliates and
Subsidiaries (other than the Borrower and its Subsidiaries), other than (i)
existing Investments listed on Schedule 7.2 not in excess of the amounts set
forth on such schedule, (ii) existing and future Investments in investment
trusts, hedge funds and other investment vehicles managed by Fairfax or any of
its
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Affiliates, (iii) Investments in investment vehicles where Affiliates of Fairfax
are co-investors and (iv) other Investments other than the foregoing; provided
that (A) the aggregate amount of such Investments permitted under this clause
(iv) shall not exceed $50,000,000 at any time outstanding, (B) each such
Investment shall be permitted by the applicable Investment Guidelines and (C)
each such Investment shall not violate any Requirement of Law.
SECTION 7.3 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.3
and any refinancings, refundings, renewals or extensions thereof; provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Credit Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate;
(c) Indebtedness of any Wholly Owned Subsidiary of the Borrower to the
Borrower or to another Wholly Owned Subsidiary and of the Borrower to any Wholly
Owned Subsidiary;
(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a "market view;" and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) the Private Placement Debt;
(f) the Convertible Debt;
(g) obligations entered into in the ordinary course of business of an
Insurance Subsidiary's insurance or reinsurance business in respect of trust
arrangements formed in the ordinary course of business for the benefit of
cedents to secure reinsurance recoverables owed to them by such Insurance
Subsidiary; and
(h) other unsecured Indebtedness, provided that no Default or Event of
Default would exist at the time of the incurrence thereof and after giving
effect thereto.
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SECTION 7.4 MERGER; CONSOLIDATION. Permit or cause any of its Subsidiaries
to, liquidate, wind up or dissolve, or enter into any consolidation, merger or
other combination, or agree to do any of the foregoing; provided, however, that
any Credit Party or any Subsidiary may merge into or consolidate with any other
Person so long as (y) the surviving corporation is a Credit Party or a Wholly
Owned Subsidiary of a Credit Party (and in any event, if a Credit Party is a
party to such merger or consolidation, the surviving corporation shall be such
Credit Party, it being understood and agreed that in the case of a merger or
consolidation between a Subsidiary Obligor with the Borrower, the survivor
corporation of such merger or consolidation shall be the Borrower), and (z)
immediately after giving effect thereto, no Default or Event of Default would
occur or exist.
SECTION 7.5 DISPOSITION OF ASSETS.
(a) Other than the sale, assignment, lease, conveyance, or transfer of (1)
inventory held for sale, (2) equipment, fixtures, supplies or materials no
longer required in the operation of the business of the Borrower or any of its
Subsidiaries or that is obsolete and (3) securities in the investment portfolios
of the Borrower or its Subsidiaries, sell, assign, lease, convey, transfer,
assumption reinsure or otherwise dispose of (whether in one or a series of
transactions) any of its assets (an "Asset Disposition") unless (i) in the good
faith opinion of the Borrower, the Asset Disposition is in exchange for
consideration having a Fair Market Value at least equal to that of the property
exchanged and is in the best interest of the Borrower or such Subsidiary; (ii)
immediately after giving effect to the Asset Disposition, no Default or Event of
Default would exist; and (iii) immediately after giving effect to the Asset
Disposition, the Fair Market Value of all property that was the subject of any
Asset Disposition (x) occurring in the then current fiscal year of the Borrower
would not exceed 10% of Consolidated Net Worth as of the then most recently
ended fiscal year and (y) occurring over the term of this Agreement would not
exceed $450,000,000; provided that no Equity Interest of any Subsidiary Obligor
shall be the property subject to any Asset Disposition unless (in addition to
the foregoing conditions) (A) such Subsidiary Obligor has no outstanding
Obligations and (B) the Borrower expressly assumes all of such Subsidiary
Obligor's Obligations to the Administrative Agent, the L/C Issuer and the
Lenders pursuant to Section 3.1, Section 3.4, Section 10.4 or any other
provision of this Agreement that survives the payment in full of such Subsidiary
Obligor's Obligations.
(b) Notwithstanding anything herein to the contrary, the Borrower will not,
and will not permit or cause any of its Subsidiaries to, sell, or otherwise
dispose of, any Equity Interest of OARC.
SECTION 7.6 RESTRICTED PAYMENTS. Declare or make any dividend payment, or
make any other distribution of cash, property or assets, in respect of any of
its capital stock or any warrants, rights or options (other than employee stock
options) to acquire its capital stock, or purchase, redeem, retire or otherwise
acquire for value any shares of its capital stock (other than shares of its
capital stock purchased to meet its obligations under existing stock-based
compensation plans for its employees) or any warrants, rights or options to
acquire its capital stock, or set aside funds for any of the foregoing, except
that:
(a) each Wholly Owned Subsidiary may declare and make dividend payments or
other distributions to the Borrower or another Wholly Owned Subsidiary to the
extent permitted
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under applicable Requirements of Law and, as to the Insurance Subsidiaries, by
each relevant Insurance Regulatory Authority; and
(b) so long as no Default or Event of Default exists or would result
therefrom, the Borrower may make dividends, payments, distributions,
acquisition, purchases, retirements or redemptions in an aggregate amount during
any fiscal year not to exceed the lesser of (i) the greater of (A) 20% of
Consolidated Net Income for the period of four consecutive fiscal quarters of
the Borrower most recently ended and (B) $15,000,000 and (ii) 50% of
Consolidated Net Worth at the end of such fiscal year; provided however in no
event shall dividends and distributions to Fairfax and its Affiliates
(including, without limitation, any payments in respect of any Guarantees listed
on Schedule 7.3 to this Agreement, net of any indemnification payments made by
Fairfax) during any fiscal year exceed $30,000,000 in aggregate amount.
The Borrower will not, and will not permit or cause any of its Subsidiaries to,
make (or give any notice in respect of) any voluntary or optional payment or
prepayment on any Indebtedness or, directly or indirectly, make any redemption
(including pursuant to any change of control provision), retirement, defeasance
or other acquisition for value of any Indebtedness, or make any deposit or
otherwise set aside funds for any of the foregoing purposes; provided, however,
the Borrower and its Subsidiaries may voluntarily prepay, voluntarily redeem,
voluntarily retire, voluntarily defease or voluntarily acquire for value any
Indebtedness and/or Convertible Debt so long as no Default or Event of Default
exists or would result therefrom.
SECTION 7.7 CHANGE IN NATURE OF BUSINESS. Engage to any substantial degree
in any business other than the insurance or reinsurance business and other
businesses engaged in by the Borrower and its Subsidiaries on the date hereof or
a business reasonably related thereto.
SECTION 7.8 TRANSACTIONS WITH AFFILIATES. Enter into any material
transaction with any officer, director, stockholder or other Affiliate of the
Borrower or any Subsidiary, except in the ordinary course of its business and
upon fair and reasonable terms that are no less favorable to it than it would
obtain in a comparable arm's length transaction with a Person other than an
Affiliate of the Borrower or such Subsidiary; provided, however, that nothing
contained in this Section shall prohibit:
(a) transactions described on Schedule 7.8 or otherwise expressly permitted
hereunder; and
(b) the payment by Borrower of reasonable and customary fees to members of
its board of directors.
SECTION 7.9 CERTAIN AMENDMENTS. a) Amend, modify or waive, or permit the
amendment, modification or waiver of, any provision of any agreement or
instrument evidencing or governing any Indebtedness or (b) amend or modify its
articles or certificate of incorporation or bylaws, in each case under clauses
(a) and (b) other than any amendments, modifications or waivers that could not
reasonably be expected to affect the Lenders adversely.
SECTION 7.10 BURDENSOME AGREEMENTS. Create or otherwise cause or suffer to
exist or become effective any restriction or encumbrance on (a) the ability of
the Borrower and its Subsidiaries to perform and comply with their respective
obligations under the Loan Documents,
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(b) the ability of the Borrower or any Subsidiary to grant, assume or permit to
exist any Lien upon any of its assets or properties as security, directly or
indirectly, for the Obligations, other than the restrictions set forth in the
Loan Documents, or (c) the ability of any Subsidiary to make payments or other
distributions in respect of its capital to the Borrower or any other Subsidiary,
or make transfers to the Borrower or any other Subsidiary, in each case, other
than as existing under or by reason of the Loan Documents or applicable
Requirements of Law.
SECTION 7.11 USE OF PROCEEDS. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.
SECTION 7.12 FISCAL YEAR. Permit or cause any of its Insurance Subsidiaries
to, change the ending date of its fiscal year to a date other than December 31.
SECTION 7.13 REINSURANCE AGREEMENTS. Permit or cause any of its Insurance
Subsidiaries to be or become a party to any Reinsurance Agreement (excluding any
retrocession agreement and any Reinsurance Agreement with respect to which the
reinsurer's obligations thereunder are fully-secured) with any reinsurer whose
Financial Strength Rating or Debt Rating (as rated by S&P) is less than "A-",
other than (i) reinsurers in respect of the Reinsurance Agreements listed on
Schedule 5.18 (but only in amounts presently existing as listed on such
Schedule) with a rating so listed on the date hereof, but not less than such
listed rating; and (ii) other reinsurers whose Financial Strength Rating or Debt
Rating (as rated by S&P) is less than "A-", provided that the aggregate amount
of the obligations under Reinsurance Agreements with such reinsurers described
in clauses (i) or (ii) of this Section shall not exceed 20% of ceded premiums in
any fiscal year.
SECTION 7.14 FINANCIAL COVENANTS.
(A) MAXIMUM TOTAL DEBT TO CAPITALIZATION RATIO. Permit the Total Debt to
Capitalization Ratio to exceed 0.30 to 1.0 at any time.
(B) MINIMUM STATUTORY SURPLUS. Permit the Statutory Surplus to be less than
$1,000,000,000.
(C) MINIMUM RISK-BASED CAPITAL. Permit the ratio of (i) "total adjusted
capital" (within the meaning of the Risk-Based Capital for Insurers Model Act as
promulgated by the NAIC as of the date hereof (the "Model Act")) of OARC to (ii)
2 times the "Authorized Control Level Risk-Based Capital" (within the meaning of
the Model Act) of OARC to be less than one hundred fifty percent (150%), as of
the last day of any fiscal quarter, beginning with the fiscal quarter ending
September 30, 2005.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Borrower or any other Credit Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any Revolving
Loan or any L/C Obligation, or (ii) within three days after the same becomes
due, any interest on any Revolving Loan or on any L/C Obligation, or any fee due
hereunder, or (iii) within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower or any other Credit Party fails to
perform or observe any term, covenant or agreement contained in any of Section
6.3, Section 6.5, Section 6.10, or Section 6.11, Section 6.14(a), Section
6.14(c) or ARTICLE VII (other than Section 7.13); or
(c) Other Defaults. Any Credit Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a), (b) or (n) of this
Section 8.1) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Credit Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith which is qualified as to
materiality shall be incorrect or misleading, and any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Credit Party herein which is not qualified as to
materiality shall be incorrect or misleading in all material respects, in each
case when made or deemed made; or
(e) Cross-Default. (i) The Borrower or any Material Subsidiary fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of the Private Placement Debt,
the Convertible Debt or any other Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $50,000,000 and such failure continues after the
applicable notice or grace period, if any, specified in the relevant document or
(ii) the Borrower or any Subsidiary defaults in the performance of any other
agreement, term or condition contained in Private Placement Debt, the
Convertible Debt or any other Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Contracts) or some other event occurs, and
the effect of which default or other event is to cause, or to permit the holder
or holders of the Private Placement Debt, the Convertible Debt or any other such
Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to be demanded
or to become due or to be repurchased, prepaid, defeased or redeemed
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(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem the Private Placement Debt, the Convertible Debt or such Indebtedness to
be made, prior to its stated maturity (other with respect to a market condition
call exercised by the holders of the Convertible Debt), or such Guarantee to
become payable, or cash collateral in respect thereof to be demanded, in excess
of such amount; or (iii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which the Borrower or any Subsidiary
is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Borrower or such Subsidiary as a
result thereof is greater than $50,000,000; or
(f) Insolvency Proceedings, Etc. Any Credit Party or any other Material
Subsidiary institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Credit Party or any other
Material Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against any Credit Party or any of their
respective Subsidiaries or any combination thereof (i) one or more final
judgments or orders for the payment of money in an aggregate amount exceeding 5%
of Consolidated Net Worth that is not stayed, discharged or paid within 20 days
after entry thereof (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 20 consecutive days during which
a stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $10,000,000; or
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(j) Invalidity of Loan Documents. Any material provision of any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or satisfaction in full of
all the Obligations, ceases to be in full force and effect; or any Credit Party
or any other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Credit Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document;
(k) Invalidity of Security Documents. Any Security Document to which any
Credit Party is now or hereafter a party shall for any reason cease to be in
full force and effect or cease to be effective to give the Administrative Agent
a valid and perfected security interest in and Lien upon the Collateral
purported to be covered thereby, subject to no Liens other than Liens in favor
of the Custodian, in each case unless any such cessation occurs in accordance
with the terms thereof or is due to any act or failure to act on the part of the
Administrative Agent or any Lender, or any Credit Party shall assert any of the
foregoing; or
(l) Loss of Licenses. Any Governmental Authority revokes, fails to renew or
suspends any License of the Borrower or any Insurance Subsidiary, which
revocation, failure or suspension has had or could reasonably be expected to
have a Material Adverse Effect, or the Borrower or any Insurance Subsidiary for
any reason loses any License which loss had had or could reasonably be expected
to have a Material Adverse Effect, or the Borrower or any Insurance Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any License which imposition has or could reasonably be expected to
have a Material Adverse Effect; or
(m) Ratings Downgrade. (i) The Financial Strength Rating for OARC falls
below B+; or
(n) L/C Collateral. The aggregate L/C Obligations of any Letter of Credit
Obligor exceeds the L/C Collateral Balance for such Letter of Credit Obligor for
a period of 14 days or more; or
(o) Change of Control. There occurs any Change of Control.
SECTION 8.2 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default (other
than an Event of Default pursuant to Section 8.1(n)) occurs and is continuing,
the Administrative Agent shall, at the request of, or may, with the consent of,
the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Revolving Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Revolving Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand,
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protest or other notice of any kind, all of which are hereby expressly waived by
the Credit Parties;
(c) require that the Credit Parties Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Revolving Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Credit Parties to Cash Collateralize the L/C Obligations
as aforesaid shall automatically become effective, in each case without further
act of the Administrative Agent or any Lender;
provided, further, if any Event of Default pursuant to Section 8.1(n) occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:
(i) require that the Borrower or the applicable Subsidiary Obligor
Cash Collateralize the L/C Obligations (in an amount equal to the
difference between then Outstanding Amount thereof and the L/C Collateral
Balance of the Borrower or the applicable Subsidiary Obligor); and
(ii) liquidate all or any part of the L/C Collateral..
SECTION 8.3 APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.2 (or after the Revolving Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.2),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
ARTICLE III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders and the L/C Issuer (including fees, charges and disbursements of counsel
to the respective Lenders and the L/C Issuer and amounts payable under ARTICLE
III), ratably among them in proportion to the amounts described in this clause
Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Revolving Loans, L/C Borrowings and other
Obligations, ratably among the
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Lenders and the L/C Issuer in proportion to the respective amounts described in
this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Revolving Loans and L/C Borrowings, ratably among the Lenders
and the L/C Issuer in proportion to the respective amounts described in this
clause Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.3(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
SECTION 9.1 APPOINTMENT AND AUTHORITY. Each of the Lenders and the L/C
Issuer hereby irrevocably appoints Wachovia to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders, and the L/C Issuer, and neither the Borrower
nor any of the Subsidiary Obligors shall have rights as a third party
beneficiary of any of such provisions.
SECTION 9.2 RIGHTS AS A LENDER. The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
SECTION 9.3 EXCULPATORY PROVISIONS. The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
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(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower, any of its Affiliates or any
of the Subsidiary Obligors that is communicated to or obtained by the Person
serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 10.1 and Section 8.2 or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Subsidiary Obligor, a Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
SECTION 9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Revolving Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the
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satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume
that such condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Revolving Loan or the issuance of
such Letter of Credit. The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
SECTION 9.5 DELEGATION OF DUTIES. The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
SECTION 9.6 RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent
may at any time give notice of its resignation to the Lenders, the L/C Issuer
and the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuer, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the L/C Issuer under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent's resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.4 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub
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agents and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while the retiring Administrative Agent was
acting as Administrative Agent.
Any resignation by Wachovia as Administrative Agent pursuant to this
Section shall also constitute its resignation as the L/C Issuer. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, (a)
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of a retiring L/C Issuer, (b) the retiring L/C
Issuer shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangement
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit.
SECTION 9.7 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender and the L/C Issuer acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
SECTION 9.8 NO OTHER DUTIES, ETC. Anything herein to the contrary
notwithstanding, the Arranger shall not have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as Administrative Agent, a Lender or the L/C
Issuer hereunder.
SECTION 9.9 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Revolving Loan or L/C Obligation shall then be
due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower or any Subsidiary Obligor) shall be entitled and empowered, by
intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Revolving Loans, L/C Obligations and
all other Obligations that are owing and unpaid and to file such other documents
as may be necessary or advisable in order to have the claims of the Lenders, the
L/C Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Section 2.3(i) and (j), Section 2.8and Section 10.4) allowed in such
judicial proceeding; and
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(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Section 2.8
and Section 10.4.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Credit Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Credit
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.1(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.2) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Revolving Loan or L/C Borrowing, or (subject to clause (iv) of the second
proviso to this Section 10.1) any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any obligation of the Borrower to pay interest or Letter of Credit Fees
at the Default Rate;
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(e) change Section 2.12 or Section 8.3 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) (i) release any of the L/C Collateral for any Letter of Credit Obligor
(other than pursuant to the exercise of remedies pursuant to the second proviso
of Section 8.2), (ii) change the definition of "Collateral Coverage Percentage",
or (iii) waive any Event of Default pursuant to Section 8.1(n), without the
written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by the L/C
Issuer; (ii) no amendment, waiver or consent shall, unless in writing and signed
by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document; (iii) Section 10.6(h) may not be amended, waived or
otherwise modified without the consent of each Granting Lender all or any part
of whose Revolving Loans are being funded by an SPC at the time of such
amendment, waiver or other modification; and (iv) the Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed only by the
parties thereto. Notwithstanding anything to the contrary herein, no Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or
consent hereunder, except that the Commitment of such Lender may not be
increased or extended without the consent of such Lender.
SECTION 10.2 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, any Subsidiary Obligor, the Administrative
Agent or the L/C Issuer, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.2; and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
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recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to ARTICLE
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent, the Borrower or
any Subsidiary Obligor may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) Change of Address, Etc. Each of the Borrower, any Subsidiary Obligor,
the Administrative Agent and the L/C Issuer may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the other parties hereto. Each other Lender may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to
the Borrower, each Subsidiary Obligor, the Administrative Agent and the L/C
Issuer.
(d) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Revolving Loan Notices)
purportedly given by or on behalf of the Borrower or any Subsidiary Obligor even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower and each Subsidiary Obligor shall indemnify
the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower or such Subsidiary Obligor. All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender, the
L/C Issuer or the Administrative Agent to exercise, and no delay by any such
Person in exercising,
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any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 10.4 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrower (and each Subsidiary Obligor, to the
extent related to any Letter of Credit issued for the account of such Subsidiary
Obligor) shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Lender or the L/C
Issuer), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Revolving Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Revolving Loans or Letters of Credit.
(b) Indemnification by the Borrower. The Borrower (and each Subsidiary
Obligor, to the extent related to any Letter of Credit issued for the account of
such Subsidiary Obligor) shall indemnify the Administrative Agent (and any
sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of
any of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any
other Credit Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
Revolving Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower or any
other Credit Party, and regardless of whether any Indemnitee is a party thereto,
in all cases, whether or not caused
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by or arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Borrower
or any other Credit Party against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrower or such Credit Party has obtained a judgment in its favor on such claim
as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Borrower or any
Subsidiary Obligor for any reason fails to indefeasibly pay any amount required
under subsection (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related
Party of any of the foregoing, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent), the L/C Issuer or such Related
Party, as the case may be, such Lender's Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or the L/C Issuer in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent) or the L/C Issuer in connection with such capacity. The obligations
of the Lenders under this subsection (c) are subject to the provisions of
Section 2.11(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, the Borrower and each Subsidiary Obligor shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Revolving Loan or
Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to
in subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent and the L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
SECTION 10.5 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of any Credit Party is made to the Administrative Agent, the L/C Issuer
or any Lender, or the Administrative Agent, the L/C Issuer or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared
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to be fraudulent or preferential, set aside or required (including pursuant to
any settlement entered into by the Administrative Agent, the L/C Issuer or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to
the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders and the L/C Issuer under clause (b) of the
preceding sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.
SECTION 10.6 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any Subsidiary Obligor may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) or (i) of this Section, or (iv) to
an SPC in accordance with the provisions of subsection (h) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the L/C Issuer and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignment by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment, the Revolving Loans,
and, for purposes of this subsection (b), participations in L/C Obligations, at
the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Revolving Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Commitment (which for this purpose includes Revolving Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Revolving Loans of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent or, if "Trade Date" is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $5,000,000
unless each of the Administrative Agent and, so long as
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no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Revolving Loans or the Commitment
assigned; and
(iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500 for each assignment, and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 3.1, Section 3.4, Section 3.5, and
Section 10.4 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower and each Subsidiary Obligor, shall maintain at the
Administrative Agent's Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Revolving Loans
and L/C Obligations owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be conclusive, and
the Borrower, each Subsidiary Obligor, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by each of the Borrower, each Subsidiary Obligor and the L/C Issuer
at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower, any Subsidiary Obligor or the Administrative Agent,
sell participations to any Person (other than a natural person or the Borrower
or any of the Borrower's Affiliates or Subsidiaries) (each, a "Participant") in
all or a portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment, the Revolving Loans and/or such
Lender's participations in L/C Obligations owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely
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responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, each Subsidiary Obligor, the Administrative Agent, the
Lenders and the L/C Issuer shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.1 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower and each Subsidiary Obligor agrees that each
Participant shall be entitled to the benefits of Section 3.1, Section 3.4, and
Section 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.9 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.12 as though it were a Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.1 or Section 3.4 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's and each Subsidiary Obligor's prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.1 unless the Borrower
and each Subsidiary Obligor is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower and
each Subsidiary Obligor, to comply with Section 3.1(e) as though it were a
Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(g) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle identified
as such in writing from time to time by the Granting Lender to the
Administrative Agent, the Borrower and each
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Subsidiary Obligor (an "SPC") the option to provide all or any part of any
Revolving Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Revolving Loan, and (ii) if an SPC elects not
to exercise such option or otherwise fails to make all or any part of such
Revolving Loan, the Granting Lender shall be obligated to make such Revolving
Loan pursuant to the terms hereof, or if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 2.11(b)(ii). Each party
hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by
any SPC of such option shall increase the costs or expenses or otherwise
increase or change the obligations of the Borrower or any Subsidiary Obligor
under this Agreement (including its obligations under Section 3.4), (ii) no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting Lender
shall for all purposes, including the approval of any amendment, waiver or other
modification of any provision of any Loan Document, remain the lender of record
hereunder. The making of a Revolving Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Revolving
Loan were made by such Granting Lender. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in instituting
against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding under the laws of the United States or any State thereof.
Notwithstanding anything to the contrary contained herein, any SPC may (i) with
notice to, but without prior consent of the Borrower and the Administrative
Agent, assign all or any portion of its right to receive payment with respect to
any Revolving Loan to the Granting Lender and (ii) disclose on a confidential
basis any non-public information relating to its funding of Revolving Loans to
any rating agency, commercial paper dealer or provider of any surety or
Guarantee or credit or liquidity enhancement to such SPC.
(i) Resignation as L/C Issuer after Assignment. Notwithstanding anything to
the contrary contained herein, if at any time Wachovia assigns all of its
Commitment and Revolving Loans pursuant to subsection (b) above, Wachovia may,
upon 30 days' notice to the Borrower, the Letter of Credit Obligors, and the
Lenders, resign as the L/C Issuer. In the event of any such resignation as the
L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that no failure by the
Borrower to appoint any such successor shall affect the resignation of Wachovia
as the L/C Issuer. If Wachovia resigns as the L/C Issuer, it shall retain all
the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit issued by it outstanding as of the effective date of its
resignation as the L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Revolving Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.3(c)).
SECTION 10.7 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates' and to its and its Affiliates'
respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and shall
have agreed to keep such
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Information confidential substantially in accordance with this Section 10.7),
(b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the
NAIC), (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the prior written consent of the Borrower and each Subsidiary Obligor or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower or a
Subsidiary Obligor.
For purposes of this Section, "Information" means all information received
from the Borrower, any Subsidiary Obligor or any Subsidiary relating to the
Borrower, any Subsidiary Obligor or any Subsidiary or any of their respective
businesses, other than any such information that is available to the
Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis
prior to disclosure by the Borrower, any Subsidiary Obligor or any Subsidiary,
provided that, in the case of information received from the Borrower or any
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 10.8 RIGHT OF SET-OFF. If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the
credit or the account of the Borrower or any Subsidiary Obligor against any and
all of the obligations of the Borrower or such Subsidiary Obligor now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C
Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower or such Subsidiary
Obligor may be contingent or unmatured or are owed to a branch or office of such
Lender or the L/C Issuer different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender, the L/C
Issuer and their respective Affiliates under this Section are in addition to
other rights and remedies (including other rights of setoff) that such Lender,
the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C
Issuer agrees to notify the Borrower or any Subsidiary Obligor, as the case may
be, and the Administrative Agent promptly after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
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SECTION 10.9 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Revolving
Loans or, if it exceeds such unpaid principal, refunded to the Borrower or
Subsidiary Obligor, as the case may be. In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.
SECTION 10.10 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.1, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 10.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Revolving Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.
SECTION 10.12 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10.13 REPLACEMENT OF LENDERS. If any Lender requests compensation
under Section 3.4, or if the Borrower is required to pay any additional amount
to any Lender or any
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Governmental Authority for the account of any Lender pursuant to Section 3.1, if
any Lender is a Defaulting Lender or if any other circumstance exists hereunder
that gives the Borrower the right to replace a Lender as a party hereto, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.6), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the assignment
fee specified in Section 10.6(b);
(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Revolving Loans and L/C Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.5) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.4 or payments required to be made pursuant to
Section 3.1, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 10.14 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE
OF LAW AND CONFLICTS OF LAW RULES).
(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER CREDIT PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE
96
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT,
ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.2. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 10.15 WAIVER JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.16 PATRIOT ACT NOTICE. Each Lender that is subject to the
PATRIOT Act and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
PATRIOT Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and
97
address of the Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower in accordance with
the Act.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
98
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ODYSSEY RE HOLDINGS CORP.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President &
Chief Financial Officer
ODYSSEY AMERICA REINSURANCE CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
CLEARWATER INSURANCE COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
CLEARWATER SELECT INSURANCE COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
XXXXXX INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President & Chief Operating
Officer
XXXXXX SPECIALTY INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President & Chief Operating
Officer
XXXXXX CORPORATE NAME LIMITED
By: /s/ J R F Micklem
-----------------------------------
Name: J R F Micklem
Title: Director
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent, Lender, and L/C
Issuer
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
KEY BANK, NATIONAL ASSOCIATION,
as Syndication Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
CITIBANK, N.A., as Documentation Agent
and Lender
By: /s/ Xxxxx X. Dodge
------------------------------------
Name: Xxxxx X. Dodge
Title: Managing Director
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
XXXXXXX BANK, NATIONAL ASSOCIATION,
as Documentation Agent and Lender
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
PNC BANK, NATIONAL ASSOCIATION, as
Lender
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
JPMORGAN CHASE BANK, as Lender
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SIGNATURE PAGE TO ODYSSEY RE HOLDINGS CORP.
CREDIT AGREEMENT
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
This Disclosure Schedule has been prepared in connection with the
Credit Agreement, dated as of September 23, 2005 among Odyssey Re Holdings
Corp., as the Borrower, Wachovia Bank, National Association, as Administrative
Agent, the other Lenders party thereto and Wachovia Capital Markets, LLC, as
Sole Lead Arranger and Sole Book Runner (the "Credit Agreement"). Unless
otherwise defined in this Disclosure Schedule, all capitalized terms used herein
shall have the meanings ascribed to them in the Credit Agreement.
This Disclosure Schedule is qualified in its entirety by reference to
specific provisions of the Credit Agreement, and is not intended to constitute,
and shall not be construed as constituting, representations or warranties of the
any or all of the Credit Parties except as and to the extent provided in the
Credit Agreement. Inclusion of information herein shall not be construed as an
admission that such information is material to the business, assets, financial
condition or operations of the Borrower or any of the other Credit Parties.
Headings have been inserted on the sections of the Disclosure Schedule
for convenience of reference only and shall to no extent have the effect of
amending or changing the express description of the sections as set forth in the
Credit Agreement. The annexes or exhibits to any particular section of this
Disclosure Schedule form an integral part of this Disclosure Schedule and are
incorporated by reference for all purposes as if set forth fully herein.
SCHEDULE 2.1
COMMITMENTS
AND APPLICABLE PERCENTAGES
APPLICABLE
LENDER COMMITMENT PERCENTAGE
------ ------------ -------------
Wachovia Bank, National Association $ 40,000,000 26.666666667
Key Bank National Association $ 25,000,000 16.666666667
Citibank, N.A. $ 25,000,000 16.666666667
PNC Bank, National Association $ 20,000,000 13.333333333
Xxxxxxx Bank, National Association $ 25,000,000 16.666666667
JPMorgan Chase Bank $ 15,000,000 10.000000000
TOTAL: $150,000,000 100.000000000%
Schedule 2.1
SCHEDULE 5.5
SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS
OTHER LIABILITIES AND PAYABLE FOR SECURITIES PURCHASED
The following balances are as of June 30, 2005 and December 31, 2004 (in
thousands):
6/30/05 12/31/04 CHANGE
-------- -------- --------
Salaries and other compensation $ 14,602 $ 20,312 (5,710)
Outside services 5,051 2,735 2,316
Premium taxes 1,042 1,914 (872)
Benefit plan accrual 18,279 17,314 965
Other operational liabilities 8,884 9,114 (230)
Commission reserve 25,731 24,076 1,655
Loss draft outstanding 2,855 4,071 (1,216)
Amounts withheld by company 11,152 9,178 1,974
Payable for securities purchased 12,735 36,670 (23,935)
Payable to non-affiliates 261 -- 261
Payable to affiliates 236 1,100 (864)
Interest payable 4,359 3,271 1,088
Foreign Exchange 7,375 10,941 (3,566)
Other 2,644 7 2,638
-------- -------- --------
GRAND TOTAL $115,207 $140,704 $(25,497)
======== ======== ========
- Purchased securities totaling $12.7 million and $36.7 million at the end of
June 30, 2005 and December 31, 2004, respectively, had not settled at the
end of their respective periods, however, they settled in July and January
2005, repectively
- Commission reserves increased by $1.6 million, partially due to an increase
in Latin America of $1.3 million
- Salaries and other compensation decreased by $5.7 million due to a $1.3
million decrease in personnel related expenses, $4.4 million decrease in
bonus accrual (2004 bonus payout offset by 2005 bonus accrual).
- Outside services increased 2.3 million primarily due to $1.2 million Sarbox
accrual for KPMG and PwC, and $1.9 million audit and legal accrual.
- Interest Payable increased $1.1 million due to the interest accrual on the
6.875% Senior Note which was acquired in second quarter 2005. Interest
payments are made semi-annually in May, June, November and December.
- Amounts withheld increased by $2.0 million due to business activity.
- Foreign Exchange on OARC's book of business primarily in pounds sterling
has decreased by $3.6 million due to weakening US dollar.
- Other increased $2.6 million due to the deposit accounting's Performance
Insurance Company auto physical damage quota share contract effective
1/1/05.
The components of debt obligations are as follows (in thousands):
As of As of
June 30, December 31,
2005 2004
-------- ------------
7.65% Senior Notes..................... $224,637 $224,616
4.375% Convertible Senior Debentures... 91,602 109,900
7.49% Senior Notes..................... 41,127 41,524
6.875% Senior Notes.................... 124,207 --
-------- --------
Total debt obligations................. $481,573 $376,040
======== ========
Schedule 5.5
Aggregate maturities of the Company's debt obligations, at face value, are as
follows (in thousands):
Year Amount
---- --------
2006.... $ 40,000
2013.... 225,000
2015.... 125,000
2022.... 91,602
--------
Total... $481,602
========
SCHEDULE 5.10
TAX SHARING AGREEMENTS
1. Tax Allocation Agreement, dated as of June 19, 2001 and as amended, by and
between Fairfax Inc., the Borrower, OARC, Clearwater and Xxxxxx.
2. Tax Allocation Agreement, dated as of October 28, 2003, between the Borrower.
and Xxxxxx Specialty (f/k/a General Security Indemnity Company).
3. Tax Allocation Agreement, dated as of December 31, 2004, between the Borrower
and Clearwater Select.
Schedule 5.10
SCHEDULE 5.12
SUBSIDIARIES AND
AND OTHER EQUITY INVESTMENTS
(a) Subsidiaries of the Borrower
Odyssey America Reinsurance Corporation Connecticut
Clearwater Insurance Company Delaware
Xxxxxx Insurance Company Delaware
Xxxxxx Specialty Insurance Company New York
Clearwater Select Insurance Company Delaware
Clearwater Insurance Trust I Delaware
O.R.E. Holdings Limited Mauritius Odyssey UK Holdings Corp. Delaware
Newline Holdings UK Limited U.K.
Newline Underwriting Management Limited U.K.
Newline Corporate Name Limited U.K.
Newline Underwriting Limited U.K.
Xxxxxx Holdings UK Limited U.K.
Xxxxxx Corporate Name Limited U.K.
Xxxxxx Underwriting Limited U.K.
Xxxxxx Underwriting Management Limited U.K.
Odyssey Holdings Latin America, Inc. Delaware
Odyssey Latin America, Inc. Delaware
Odyssey Servicios Limitada Chile
Odyssey Services, SA de CV Mexico
Odyssey America Trust Delaware
b. Equity Interests of the Borrower
1. Clearwater owns 47.42% of the Class 1 common stock of TRG Holding
Corporation, a Delaware corporation ("TRG Holding"). TRG Holding owns
100% of the capital stock of The Resolution Group, Inc., a Delaware
corporation ("TRG"). TRG owns 100% of the capital stock of Envision
Claims Management Corporation, a New Jersey corporation, and
Resolution Reinsurance Services Corporation, a Delaware corporation
("RRSC"). RRSC owns 100% of the capital stock of St. John's Insurance
Company Limited, a Bermuda company.
2. OARC and Clearwater each own 7.51% of the capital stock of Advent
Capital (Holdings) PLC (United Kingdom).
3. O.R.E. Holdings Limited owns 45% of the capital stock of Xxxxxx
Enterprises Private Limited (India) ("CEPL"). CEPL owns 99.99% of the
capital stock of Cherraan
Schedule 5.12
Propertiees Limited (India) ("Cherraan") and 34.66% of the capital
stock of Xxxxxxxx Xxxxx (India) ("Xxxxxxxx Xxxxx"). Cherraan also owns
28.19% of the capital stock of Xxxxxxxx Xxxxx.
4. The Borrower, through OARC and Clearwater, owns a 39.2% voting
interest in HWIC Asia Fund, and a 56.2% economic interest in a
portfolio of invested assets of HWIC Asia Fund which share similar
investment criteria as that of the Borrower. During the second quarter
of 2005, the Borrower's interest in HWIC Asia Fund has been reflected
in the consolidated financial statements in accordance with the equity
method of accounting. The Borrower's interest in HWIC Asia Fund was
previously consolidated beginning in the third quarter of 2004.
5. Clearwater owns 4,115,065 shares, or 13.5%, of the common stock of Hub
International Limited.
6. OARC owns 39.88% of Pacific Century Fund I.
7. OARC owns 44% of Fairfax Asia Limited.
8. Xxxxxx Specialty owns 40% of Hooghuis Group LLC.
SCHEDULE 5.17
LICENSES
See attached 29 pages.
Schedule 5.17
ODYSSEY AMERICA REINSURANCE CORPORATION
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Miscellaneous Casualty, including Official
Surety Bonds, Marine
Alaska Health, Property, Casualty (all clauses), Surety, Marine,
Wet Marine, Transportation
Arizona Casualty w/o Workers' Compensation, Disability, Marine
and Transportation, Property, Surety, Vehicle
Arkansas Property, Casualty, Surety, Marine and Disability
California Fire, Marine, Surety, Plate Glass Liability, Workers'
Compensation, Sprinkler, Automobile, Miscellaneous
Canada Limited to the business of Reinsurance: Property,
Accident & Sickness, Aircraft, Automobile, Boiler and
Machinery, Hail, Legal Expense, Liability Insurance
Colorado Accident & Health, Fidelity & Surety, General Property,
Motor Vehicle (Casualty), Professional Malpractice, Crop,
General Casualty, Mortgage Guaranty, Motor Vehicle
(Property), Workers' Compensation
Connecticut Fire, Extended Coverage, Other Allied Lines, Homeowners
Multiple Peril, Commercial Multiple Peril, Earthquake,
Growing Crops, Ocean Marine, Inland Marine, Accident and
Health, Xxxxxxx'x Compensation, Liability other than Auto
(B.I. and P.D.), Auto Liability (B.I. and P.D.), Auto
Physical Damage, Aircraft (all perils), Fidelity and
Surety, Glass, Burglary and Theft, Boiler and Machinery,
Reinsurance
Delaware Health, Property, Marine & Transportation, Casualty
(including: Vehicle, Liability, Burglary & Theft,
Personal Property Floater, Glass, Boiler & Machinery,
Credit, Leakage & Fire Extinguisher Equipment,
Malpractice, Elevator, Congenital Defects, Livestock,
Entertainments and Miscellaneous
District of Columbia Aircraft (all perils), all other A & H, Allied Lines,
Boiler and Machinery, Burglary and Theft, Collectively
Renewable A & H, Commercial Auto Physical Damage,
Commercial Multiple Peril (Non-Liability), Credit, Credit
A & H (Group & Individual), Earthquake, Farmowners
Multiple Peril, Fidelity, Fire, Glass, Group Accident and
Health, Guaranteed Renewable A & H, Homeowners Multiple
Peril, Inland Marine, Medical Malpractice,
Non-Cancellable A & H, Non-renewable for Stated Reasons
Only, Ocean Marine, Other Commercial Auto Liability,
Other Liability, Other Private Passenger Auto Liability,
Private Passenger Auto Physical Damage, Property and
Casualty, Surety, Workers' Compensation
Florida Allied Lines, Commercial Auto Physical Damage, Commercial
Automobile Liability, Commercial Multi Peril, Fire,
Medical Malpractice, Other Liability, PPA Physical
Damage, Private Passenger Auto Liability, Workers'
Compensation
Georgia Property, Marine and Transportation, Casualty (including
Workers' Compensation), Surety
Hawaii Casualty, Marine, Property, Surety
Idaho Casualty (including Workers' Compensation), Surety,
Marine and Transportation, Property
Illinois Class 2 - Casualty, Fidelity, Surety (Accident and
Health, Vehicle, Liability, Workers' Compensation,
Burglary and Forgery, Glass, Fidelity and Surety,
Miscellaneous
Class 3 - Fire, Marine, Etc. (Fire, Elements, Marine and
Transportation, Vehicle, Property Damage, Sprinkler
Leakage and Crop, Other Fire and Marine Risks
Indiana Class 2 - Accident & Health, Employer's Liability,
Burglary & Theft, Glass, Boiler & Machinery, Motor
Vehicle, Water Damage, Liability, Credit, Title, Fidelity
and Surety (excluding bail bonds), Miscellaneous, Legal
Expenses
Class 3 - Property, Crops, Leakage and Fire Extinguisher
Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied Lines, Homeowners
Multiple Peril (incl. B.I.), Commercial Multiple Peril,
Earthquake, Growing Crops, Ocean Marine, Inland Marine,
Accident Only (Individual), Accident and Health
(Individual), Hospital and Medical Expense (Individual),
Group Accident and Health, Non-Cancellable Accident and
Health, Workers' Compensation, Liability other than Auto
(B.I.), Liability other than Auto (P.D.), Auto Liability
(B.I.), Auto Liability (P.D.), Auto Physical Damage,
Aircraft Physical Damage, Fidelity, Surety, Glass,
Burglary and Theft, Boiler and Machinery
Kansas Fire, Windstorm & Hail, Extended Coverage, Additional
Perils on Growing Crops, Hail on Growing Crops, Optional
Perils, Sprinkler Leakage, Business Interruption,
Earthquake, Water Damage, Aircraft Hull, Ocean Marine,
Inland Marine, Rain, Automobile, Physical Damage, Flood,
Homeowners Policies, Accident & Health, Automobile
Liability, General Liability, Workers' Compensation,
Fidelity, Surety & Forgery Bonds, Glass, Burglary, Theft
& Robbery, Boiler & Machinery, Credit, Malpractice
Liability, Livestock Mortality, Aircraft Liability, Cargo
Liability
Kentucky Property, Casualty Surety, Marine and Transportation
Insurance
Louisiana Health and Accident, Vehicle, Liability, Burglary and
Forgery, Worker's Compensation, Glass, Fidelity and
Surety, Fire and Extended Coverage, Steam Boiler and
Sprinkler Leakage, Crop and Livestock, Marine and
Transportation (Inland Marine), Miscellaneous
Maine Medial Malpractice
Maryland Casualty (not including Vehicle Liability, Mortgage
Guaranty & Workers' Compensation), Health, Marine, Wet
Marine and Transportation, Property and Marine (excluding
Wet Marine and Transportation),
Surety, Vehicle Liability, Workers' Compensation
Massachusetts Fire, Burglary, Robbery, Theft, Livestock, Repair-
Replacement, Inland Marine Only, Fidelity and Surety,
Reinsurance except Life, Nuclear Energy, Special Hazards,
Comprehensive M.V. & Aircraft, Boiler (No Inspector),
Liability other than Auto, Auto Liability, Glass, Water
Damage and Sprinkler Leakage, Elevator Damage and
Collision
Michigan Disability, Property, Ocean Marine, Inland Marine, Legal
Expense, Automobile Insurance - limited, Casualty: Steam
Boiler, Flywheel & Machinery, Casualty: Liability,
Casualty: Workers' Compensation, Casualty: Automobile,
Casualty: Plate Glass, Casualty: Sprinkler & Water
Damage, Casualty: Credit, Casualty: Burglary and Theft,
Casualty: Livestock, Casualty: Malpractice, Surety &
Fidelity
Minnesota Fire, Inland and Ocean Marine, Personal Property Floater,
Boiler & Machinery, Accident & Health, Workers'
Compensation, Fidelity & Surety, Glass, Burglary & Theft,
Security & Drafts, Water Damage, Livestock, Credit,
Automobile, General Liability, Elevator
Mississippi Fire and Allied Lines, Industrial Fire,
Casualty/Liability, Fidelity, Surety, Workers'
Compensation, Boiler and Machinery, Plate Glass, Trip
Accident and Baggage, Inland Marine, Ocean Marine, Legal,
Auto Phy. Damage/Liab, Guaranty
Missouri Qualified Reinsurer
Montana Disability, Property, Casualty, Surety, Marine
Nebraska Sickness and Accident Insurance, Property Insurance,
Glass Insurance, Burglary and Theft Insurance, Boiler and
Machinery Insurance, Liability Insurance, Workers' Comp.
and Employer's Liability, Vehicle Insurance, Fidelity
Insurance, Surety Insurance, Credit Insurance, Marine
Insurance, Miscellaneous Insurance
Nevada Health, Property, Casualty, Surety, Marine &
Transportation
New Hampshire Limited to Reinsurance (Accident & Health, Property &
Casualty)
New Jersey Fire and Allied Lines, Earthquake, Growing Crops, Ocean
Marine, Inland Marine, Automobile Liability (BI),
Automobile Liability (PD), Automobile Physical Damage,
Aircraft Physical Damage, Other Liability, Boiler &
Machinery, Fidelity & Surety, Credit, Burglary & Theft,
Glass, Sprinkler Leakage & Water Damage, Livestock, Smoke
or Smudge, Physical Loss to Buildings, Radioactive
Contamination, Mechanical Breakdown/Power Failure
New Mexico Property, Marine and Transportation, Casualty, Surety,
Vehicle
New York Accident and Health, Fire, Miscellaneous Property, Water
Damage, Burglary and Theft, Glass, Boiler and Machinery,
Elevator, Animal, Collision, Personal Injury Liability,
Property Damage Liability, Workers' Compensation and
Employer's Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and Inland
Marine, Marine Protection and Indemnity Insurance
North Carolina Fire Insurance: Fire, Miscellaneous Property (extended
coverage and growing crops), Water Damage (including
sprinkler leakage - Commercial & Residential), Burglary
and Theft, Glass, Marine (Inland and Ocean)
Casualty Insurance: Boiler and Machinery, Elevator,
Animal, Collision (Automobile and Other), Personal Injury
Liability (Automobile and Other), Property Damage
Liability (Automobile and Other), Workmen's Compensation
& Employer's Liability, Fidelity and Surety, Motor
Vehicle and Aircraft (Property Damage, Fire, Theft,
Compensation, Collision), Marine Protections and
Indemnity
North Dakota Accident & Health, Casualty, Property
Ohio Aircraft, Allied Lines, Boiler & Machinery, Burglary &
Theft, Commercial Auto - Liability, Commercial Auto - No
Fault, Commercial Auto - Phys. Damage, Credit, Credit
Accident & Health, Earthquake, Fidelity, Financial
Guaranty, Fire, Glass, Group Accident & Health, Inland
Marine, Medical Malpractice, Multiple Peril - Commercial,
Multiple Peril - Farmowners, Multiple Peril - Homeowners,
Ocean Marine, Other Liability, Private Passenger Auto -
Liability, Private Passenger Auto-Other, Private
Passenger - Phys. Damage, Surety, Workers' Compensation
Oklahoma Accident & Health, Property, Casualty, Marine, Surety,
Vehicle
Oregon Property, Casualty (including Workers' Compensation),
Marine and Transportation, Surety, Health
Pennsylvania Accident & Health, Boiler and Machinery, Credit, Fidelity
and Surety, Inland Marine and Physical Damage, Mine and
Machinery, Other Liability, Property and Allied Lines,
Worker's Compensation, Auto Liability, Burglary and
Theft, Elevator, Glass, Livestock, Ocean Marine, Personal
Property Floater, Water Damage
Puerto Rico Disability, Property, Marine and Transportation, Vehicle,
Casualty and Surety Reinsurance Exclusively
Rhode Island Authorized for all lines except life, annuities, title,
credit, mortgage guaranty and financial guaranty
South Carolina Property, Casualty, Surety, Marine
South Dakota Fire & Allied Lines, Inland & Ocean Marine, Worker's
Compensation, Bodily Injury (No Auto), Property Damage
(No Auto), Bodily Injury (Auto), Property Damage (Auto),
Physical Damage (Auto), Fidelity & Surety Bonds, Glass,
Burglary & Theft, Boiler & Machinery, Aircraft, Credit
(Mortgage Guaranty), Crop Hail, Livestock, Travel
Accident and Baggage, Pre-Paid Legal, Bail Bonds
Tennessee Property, Vehicle, Casualty, Surety
Texas Fire, Allied Coverages, Hail-growing crops only, Rain,
Inland Marine, Ocean Marine, Aircraft-liability &
physical damage, Accident, Health, Employer's Liability,
Automobile--liability & physical damage, Liability other
than Automobile, Fidelity & Surety, Glass, Burglary &
Theft, Forgery, Boiler & Machinery, Credit, Livestock,
Reinsurance on all lines authorized to be written on a
direct basis
Utah Disability, Property, Surety, Liability (including veh.,
excl. dis), Marine & Transport, Workers' Compensation,
Vehicle Liability, Professional Liability (encl. Med.
Mal.)
Vermont Health
Virginia Accident and Sickness, Fire, Miscellaneous Property,
Inland Marine, Workers' Compensation-Employer, Liability
Other than Auto, Automobile Liability, Automobile
Physical Damage, Fidelity, Surety, Glass, Burglary and
Theft, Boiler & Machinery, Credit, Home Protection
Washington Disability, Property, Marine and Transportation, Vehicle,
General Casualty, Surety
West Virginia Accident and Sickness, Fire, Marine, Casualty, Surety
Wisconsin Fire, Inland Marine, and other Property Insurance, Ocean
Marine Insurance, Disability Insurance, Liability and
Incidental Medical Expense Insurance, Automobile and
Aircraft Insurance, Fidelity Insurance, Surety Insurance,
Credit Insurance, Worker's Compensation Insurance, Legal
Expense Insurance, Credit Unemployment Insurance,
Miscellaneous
Wyoming Multiple Lines
U.S. Treasury Can do direct writing and can be used as a reinsurer
CLEARWATER INSURANCE COMPANY
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Miscellaneous Casualty, including Official
Surety Bonds
Alaska Health, Property, Casualty (all clauses), Surety, Marine,
Wet Marine & Transportation
Arizona Casualty w/o Workers' Compensation, Disability, Marine
and Transportation, Property, Surety, Vehicle
Arkansas Property, Casualty (excluding workers compensation),
Marine
California Fire, Marine, Surety, Disability, Plate Glass, Liability,
Workers' Compensation, Common Carrier Liability, Boiler
and Machinery, Burglary, Credit, Sprinkler, Team and
Vehicle, Automobile, Aircraft and Miscellaneous
Colorado Accredit Non-admitted Reinsurer
Connecticut Reinsurance Only
Delaware Health, Property, Surety, Marine & Transportation,
Casualty (including - Vehicle, Liability, Burglary &
Theft, Personal Property Floater, Glass, Boiler &
Machinery, Credit, Workmens' Compensation & Employers
Liability, Leakage & Fire Extinguishing Equipment,
Malpractice, Elevator, Congenital Defects, Livestock,
Entertainments, Miscellaneous)
District of Columbia Allied Lines, Boiler and Machinery, Burglary and Theft,
Commercial Auto No-fault (PIP), Commercial Auto Physical
Damage, Commercial Multiple Peril (Non-Liability),
Earthquake, Farmowners Multiple Peril, Fire, Glass,
Homeowners Multiple Peril, Inland Marine, Medical
Malpractice, Ocean Marine, Other Commercial Auto
Liability, Other Liability, Other Private Passenger Auto
Liability, Private Passenger Auto Physical Damage,
Property and Casualty, Surety, Workers' Compensation
Florida Accredited Reinsurer
Georgia Property, Marine and Transportation,
Casualty (including Workers' Compensation), Surety
Hawaii Accident and Health or Sickness, Casualty, Marine,
Property, Surety, Vehicle
Idaho Property, Marine & Transportation, Casualty (excludes
Worker's Compensation), Surety
Illinois Class 2 - Casualty, Fidelity & Surety (Accident & Health,
Vehicle, Liability, Workmen's Compensation, Burglary &
Forgery, Glass, Fidelity & Surety, Miscellaneous, Other
Casualty Risk, Contingent Losses)
Class 3 - Fire and Marine, Etc. (Fire, Elements, War,
Riot and Explosion, Marine and Transportation, Vehicle,
Property Damage, Sprinkler Leakage and Crop, Other Fire
and Marine Risks, Contingent Losses
Indiana Class 2 - Accident and Health, Employer's Liability,
Burglary & Theft, Glass, Boiler & Machinery, Motor
Vehicle, Water Damage, Liability, Credit, Title, Fidelity
and Surety (excluding Bail Bonds), Miscellaneous
Class 3 - Property, Crops, Leakage and Fire Extinguisher
Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied Lines, Homeowners
Multiple Peril (incl. B.I.), Commercial Multiple Peril,
Earthquake, Growing Crops, Ocean Marine, Inland Marine,
Accident Only (Individual), Accident and Health
(Individual), Hospital and Medical Expense (Individual),
Group Accident and Health, Non-Cancellable Accident and
Health, Workers' Compensation, Liability other than Auto
(B.I.), Liability other than Auto (P.D.), Auto Liability
(B.I.), Auto Liability (P.D.), Auto Physical Damage,
Aircraft Physical Damage, Fidelity, Surety, Glass,
Burglary and Theft, Boiler and Machinery
Kansas Fire, Windstorm & Hail, Extended Coverage, Hail on
Growing Crops, Optional Perils, Sprinkler Leakage,
Business Interruption, Earthquake, Water Damage, Aircraft
Hull, Ocean Marine, Inland Marine, Rain, Automobile
Physical Damage, Flood,
Homeowners Policies, Accident & health, Automobile
Liability, General Liability, Workers' Compensation,
Fidelity, Surety & Forgery Bonds, Glass, Burglary, Theft
& Robbery, Boiler & Machinery, Credit, Malpractice
Liability, Livestock Mortality, Aircraft Liability, Cargo
Liability
Kentucky Health, Property, Casualty (no limitations) and Surety
Insurance
Louisiana Health and Accident, Vehicle, Liability, Worker's
Compensation, Burglary and Forgery, Glass, Fire and
Extended Coverage, Steam Boiler and Sprinkler Leakage,
Crop and Livestock, Marine and Transportation (Inland
Marine), Miscellaneous
Maine Accredited for Reinsurance (Not "Approved Reinsurer")
Maryland Casualty (not including vehicle liability, mortgage
guaranty & workers' comp.), Health, Marine, Wet Marine &
Transportation, Property & Marine (excluding wet marine &
transportation), Surety, Vehicle Liability
Massachusetts Approved Reinsurer
Michigan Property, Ocean Marine, Inland Marine, Automobile
Insurance - limited
Casualty: Steam Boiler, Flywheel & Machinery, Casualty:
Liability, Casualty: Workers' Compensation, Casualty:
Automobile, Casualty: Plate Glass, Casualty: Sprinkler
and Water Damage, Casualty: Credit, Casualty: Burglary
and Theft, Casualty: Livestock, Casualty: Malpractice,
Casualty: Misc-Other, Disability coverage supplemental to
Auto Insurance, Surety & Fidelity
Minnesota Accredited Reinsurer Property
Mississippi Fire and Allied Lines, Industrial Fire, Casualty,
Fidelity, Surety, Workers' Compensation, Boiler and
Machinery, Plate Glass, Inland Marine, Ocean Marine,
Accident & Health, Auto Phy. Damage and Liability
Missouri Accident and Health, Fidelity and Surety,
Liability, Miscellaneous, Property
Montana Property, Casualty, Surety, Marine
Nebraska Sickness and Accident Insurance, Property Insurance,
Glass Insurance, Burglary and Theft Insurance, Boiler and
Machinery Insurance, Liability Insurance, Liability
Insurance, Workers' Compensation & Employer's Liability,
Vehicle Insurance, Fidelity Insurance, Surety Insurance,
Credit Insurance, Marine Insurance, Miscellaneous
Insurance
Nevada Reinsurance Only - Property
New Hampshire Accident and Health, Property and Casualty
New Jersey Fire and Allied Lines, Earthquake, Growing Crops, Ocean
Marine, Inland Marine, Workers' Compensation & Employers'
Liability, Automobile Liability (BI), Automobile
Liability (PD), Automobile Physical Damage, Aircraft
Physical Damage, Other Liability, Boiler & Machinery,
Fidelity & Surety, Credit, Burglary & Theft, Glass,
Sprinkler Leakage & Water Damage, Livestock, Smoke or
Smudge, Physical Loss to Buildings, Radioactive
Contamination, Accident and Health
New Mexico Property, Marine and Transportation and Casualty and
Surety and Vehicle
New York Accident and Health, Fire, Miscellaneous Property, Water
Damage, Burglary and Theft, Glass, Boiler and Machinery,
Elevator, Animal, Collision, Personal Injury Liability,
Property Damage Liability, Workers' Compensation and
Employer's Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and Inland
Marine, Marine Protection and Indemnity Insurance,
Special Risk
North Carolina Fire, Miscellaneous Property (extended coverage and
growing crops), Water Damage (including sprinkler leakage
- Commercial & Residential), Burglary and Theft, Glass,
Boiler and Machinery, Elevator, Animal, Collision
(Automobile and Other), Personal Injury Liability
(Automobile and Other),
Property Damage Liability (Automobile and Other),
Workmen's Compensation and Employer's Liability, Fidelity
and Surety Insurance, Credit Insurance, Motor Vehicle and
Aircraft (Property Damage, Fire, Theft, Compensation,
Collision), Marine Insurance (Inland and Ocean), Marine
Protection and Indemnity Insurance, Aircraft Voluntary
Settlement, Hole-in-One
North Dakota Accident & Health, Property, Casualty
Ohio Aircraft, Allied Lines, Boiler & Machinery, Burglary &
Theft, Commercial Auto - Liability, Commercial Auto - No
Fault, Commercial Auto - Phys. Damage, Credit,
Earthquake, Fidelity, Financial Guaranty, Fire, Glass,
Inland Marine, Medical Malpractice, Multiple Peril -
Commercial, Multiple Peril - Farmowners, Multiple Peril -
Homeowners, Ocean Marine, Other Liability, Private
Passenger Auto - Liability, Private Passenger Auto-Other,
Private Passenger - Phys. Damage, Surety, Workers'
Compensation
Oklahoma Accident & Health, Property, Casualty, Marine, Vehicle,
Surety
Oregon Property, Casualty (Including Worker's Compensation),
Marine and Transportation, Surety
Pennsylvania Accident and Health, Boiler and Machinery, Credit,
Fidelity and Surety, Inland Marine and Physical Damage,
Mine and Machinery, Other Liability, Property and Allied
Lines, Worker's Compensation, Auto Liability, Burglary
and Theft, Elevator, Glass Livestock, Ocean marine,
Personal Property Floater, Water Damage
Puerto Rico Reinsurance Exclusively - Disability, Property, Marine
and Transportation, Vehicle, Casualty, Surety
Rhode Island Authorized for all lines of business except life,
annuities, title, mortgage guaranty and financial
guaranty
South Carolina Accident/Health, Property, Casualty, Surety, Marine
South Dakota Fire & Allied Lines, Inland & Ocean Marine,
Bodily Injury (No auto), Property Damage (No auto),
Bodily Injury (Auto), Property Damage (Auto), Physical
Damage (Auto), Fidelity & Surety Bonds, Glass, Burglary &
Theft, Boiler & Machinery, Aircraft
Tennessee Property, Casualty, Surety
Texas Fire, Allied Coverages, Hail-growing crops only, Rain,
Inland Marine, Ocean Marine, Aircraft - Liability &
Physical Damage, Accident, Health, Workers' Compensation
& Employers' Liability, Employers' Liability, Automobile
- Liability & Physical Damage, Liability other than
Automobile, Fidelity & Surety, Glass, Burglary & Theft,
Forgery, Boiler & Machinery, Reinsurance on all lines
authorized to be written on a direct basis
Utah Accident & Health, Property, Surety, Vehicle Liability,
Liability, Marine & Transport, Workers' Compensation,
Professional Liability
Vermont Same line of business as state of domicile (Delaware)
- Health, Property, Surety, Marine & Transportation,
Casualty (including - Vehicle, Liability, Burglary &
Theft, Personal Property Floater, Glass, Boiler &
Machinery, Credit, Workmens' Compensation & Employers
Liability, Leakage & Fire Extinguishing Equipment,
Malpractice, Elevator, Congenital Defects, Livestock,
Entertainments, Miscellaneous)
Virginia Fire, Miscellaneous Property, Farm Multiple Peril,
Homeowners Multiple Peril, Commercial Multiple Peril,
Ocean Marine, Inland Marine, Workers Compensation -
Employer, Liability Other than Auto, Automobile
Liability, Automobile Physical Damage, Aircraft
Liability, Air Physical Damage, Fidelity, Surety, Glass,
Burglary and Theft, Boiler & Machinery, Credit Animal,
Water Damage
Washington Disability, Property, Marine &
Transportation, Vehicle, General Casualty, Surety
West Virginia Fire, Marine, Casualty, Surety
Wisconsin Fire, Inland Marine, and other Property Insurance, Ocean
Marine Insurance, Disability Insurance, Liability and
Incidental Medical Expense Insurance, Automobile
Insurance, Fidelity Insurance, Surety Insurance, Credit
Insurance, Worker's Compensation Insurance,
Miscellaneous, Aircraft Insurance
Wyoming Property, Casualty, Marine and Transportation, Surety,
Disability, Fire
U.S. Treasury Can be Direct Writer or Reinsurer
XXXXXX INSURANCE COMPANY
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Miscellaneous Casualty, including Official
Surety Bonds
Alaska Property, Casualty (all clauses), Surety, Marine, Wet
Marine and Transportation
Arizona Casualty w/o Workers' Compensation, Marine and
Transportation, Property, Vehicle
Arkansas Property, Casualty (including Workers' Compensation),
Surety and Marine
California Fire, Marine, Surety, Disability, Plate Glass, Liability,
Workers' Compensation, Common Carrier Liability, Boiler
and Machinery, Burglary, Credit, Sprinkler, Team and
Vehicle, Automobile, Aircraft and Miscellaneous
Colorado General Property, Credit (Casualty, Accident & Health),
Fidelity and Surety, Motor Vehicle (Property), Workers'
Compensation, Crop, General Casualty, Motor Vehicle
(Casualty), Professional Malpractice
Connecticut Liability other than Auto (B.I. and P.D.), Auto Liability
(B.I. and P.D.), Auto Physical Damage
Delaware Property, Surety, Marine & Transportation, Casualty
(including: Vehicle, Liability, Burglary & Theft,
Personal Property Floater, Glass, Boiler & Machinery,
Credit, Workers' Compensation & Employers' Liability,
Leakage & Fire Extinguisher Equipment, Malpractice,
Elevator, Congenital Defects, Livestock, Entertainments
and Miscellaneous
District of Columbia Aircraft (all Perils), Allied Lines, Boiler
and Machinery, Burglary and Theft, Commercial Auto
No-fault (PIP), Commercial Auto Physical Damage,
Commercial Multiple Peril (Non-Liability), Earthquake,
Farmowners Multiple Peril, Fidelity, Fire, Glass,
Homeowners Multiple Peril, Inland Marine,
Liability-Claims Made, Medical
Malpractice-Claims Mad, Medical Malpractice-Occurrence,
Ocean Marine, Other Liability-Occurrence, Private
Passenger Auto No-fault (PIP), Private Passenger Auto
Physical Damage, Products Liability, Property and
Casualty, Surety, Workers' Compensation
Florida Fire, Allied Lines, Farmowners Multi Peril, Homeowners
Multi Peril, Commercial Multi Peril, Inland Marine,
Earthquake, Workers; Compensation, Other Liability,
Private Passenger Auto Liability, Commercial Auto
Liability, Private Passenger Auto Physical Damage,
Commercial Auto Physical Damage, Glass, Burglary and
Theft, Boiler and Machinery, Industrial Fire, Industrial
Extended Coverage
Georgia Property, Marine and Transportation, Casualty (including
Workers' Compensation), Surety
Hawaii Accident and Health or Sickness, Casualty, Marine,
Property, Surety, Vehicle
Idaho Casualty (including Workers' Compensation), Surety,
Marine and Transportation, Property
Illinois Class 2 - Casualty, Fidelity, Surety (Accident and
Health, Vehicle, Liability, Workers' Compensation,
Burglary and Forgery, Glass, Fidelity and Surety,
Miscellaneous, Other Casualty Risks, Contingent Losses
Livestock and Domestic Animals, Legal Expense Insurance)
Class 3 - Fire, Marine, Etc. (Fire, Elements, War, Riot
and Explosion, Marine and Transportation, Vehicle,
Property Damage, Sprinkler Leakage and Crop, Other Fire
and Marine Risks, Contingent Losses, Legal Expense
Insurance
Indiana Class 2 - Employer's Liability, Burglary & Theft, Glass,
Boiler & Machinery, Motor Vehicle, Water Damage,
Liability, Credit, Fidelity and Surety (excluding bail
bonds), Miscellaneous, Legal Expenses
Class 3 - Property, Crops, Leakage and Fire Extinguisher
Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied
Lines, Homeowners Multiple Peril (incl. B.I.), Commercial
Multiple Peril, Earthquake, Growing Crops, Ocean Marine,
Inland Marine, Accident Only (Individual), Accident and
Health (Individual), Hospital and Medical Expense
(Individual), Group Accident and Health, Non-Cancellable
Accident and Health, Workers' Compensation, Liability
other than Auto (B.I.), Liability other than Auto (P.D.),
Auto Liability (B.I.), Auto Liability (P.D.), Auto
Physical Damage, Aircraft Physical Damage, Fidelity,
Surety, Glass, Burglary and Theft, Boiler and Machinery
Kansas Fire, Windstorm & Hail, Extended Coverage, Additional
Perils on Growing Crops, Hail on Growing Crops, Optional
Perils, Sprinkler Leakage, Business Interruption,
Earthquake, Water Damage, Aircraft Hull, Ocean Marine,
Inland Marine, Rain, Automobile Physical Damage, Flood,
Homeowners Policies, Automobile Liability, General
Liability, Workers' Compensation, Fidelity, Surety &
Forgery Bonds, Glass, Burglary, Theft & Robbery, Boiler &
Machinery, Credit, Malpractice Liability, Livestock
Mortality, Aircraft Liability, Cargo Liability
Kentucky Property, Surety, Casualty (no limitations)
Louisiana Vehicle, Liability, Homeowners, Fire and Extended
Coverage
Maryland Casualty (not including Vehicle Liability, Mortgage
Guaranty & Workers' Compensation), Marine, Wet Marine and
Transportation, Property and Marine (excluding Wet Marine
and Transportation), Surety, Vehicle Liability, Workers'
Compensation
Massachusetts Fire, Inland Marine Only, Boiler, Workers' Compensation,
Auto Liability, Glass, Water Damage and Sprinkler
Leakage, Elevator Property Damage and Collision,
Burglary, Robbery, Theft, Repair-Replacement, Stock
Companies (Extension of Coverage), Comprehensive M.V. &
Aircraft, Personal Property Floater, Dwellings,
Commercial Property
Michigan Property, Ocean Marine, Inland Marine,
Casualty: Steam Boiler, Flywheel & Machinery, Casualty:
Liability, Casualty: Workers' Compensation, Casualty:
Automobile, Casualty: Plate Glass, Casualty: Sprinkler &
Water Damage, Casualty: Burglary and Theft, Casualty:
Livestock, Casualty: Malpractice, Casualty: Misc-Other,
Disability coverage supplemental to Auto Insurance,
Surety & Fidelity
Mississippi Fire and Allied Lines, Industrial Fire,
Casualty/Liability, Fidelity, Surety, Workers'
Compensation, Boiler and Machinery, Plate Glass, Trip
Accident and Baggage, Inland Marine, Ocean Marine,
Accident & Health, Legal, Auto Phy. Damage/Liab,
Aircraft, Home/Farm Owners
Missouri Liability, Miscellaneous, Property
Montana Property, Casualty, Surety, Marine
Nebraska Property Insurance, Credit Property, Glass Insurance,
Burglary and Theft Insurance Boiler and machinery
Insurance, Liability Insurance, Workers' Comp. and
Employer's Liability, Vehicle Insurance, Fidelity
Insurance, Surety Insurance, Credit Insurance, Marine
Insurance, Miscellaneous Insurance
Nevada Property, Surety, Marine and Transportation, Casualty
(including Workmen's Compensation)
New Hampshire Restricted to Servicing Existing Business Only, Limited
to Reinsurance (Accident & Health, Property & Casualty)
New Jersey Fire and Allied Lines, Earthquake, Growing Crops, Ocean
Marine, Inland Marine, Workers' Compensation & Employers'
Liability, Automobile Liability (BI), Automobile
Liability (PD), Automobile Physical Damage, Aircraft
Physical Damage, Other Liability, Boiler & Machinery,
Fidelity & Surety, Credit, Burglary & Theft, Glass,
Sprinkler Leakage & Water Damage, Livestock, Smoke or
Smudge, Physical Loss to Buildings, Radioactive
Contamination, Mechanical Breakdown/Power
Failure
New Mexico Property, Marine and Transportation, Casualty, Surety,
Vehicle
New York Accident and Health, Fire, Miscellaneous Property, Water
Damage, Burglary and Theft, Glass, Boiler and Machinery,
Elevator, Animal, Collision, Personal Injury Liability,
Property Damage Liability, Workers' Compensation and
Employer's Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and Inland
Marine, Marine Protection and Indemnity Insurance, Legal
Services Insurance
North Carolina Fire Insurance: Fire, Miscellaneous Property (extended
coverage and growing crops), Water Damage (including
sprinkler leakage - Commercial & Residential), Burglary
and Theft, Glass, Marine (Inland and Ocean)
Casualty Insurance: Boiler and Machinery, Elevator,
Animal, Collision (Automobile and Other), Personal Injury
Liability (Automobile and Other), Property Damage
Liability (Automobile and Other), Motor Vehicle and
Aircraft (Property Damage, Fire, Theft, Compensation,
Collision), Marine Protections and Indemnity,
Miscellaneous (Aircraft Voluntary Settlement,
Hole-in-One)
North Dakota Casualty, Property
Ohio Aircraft, Allied Lines, Boiler & Machinery, Burglary &
Theft, Commercial Auto - Liability, Commercial Auto - No
Fault, Commercial Auto - Phys. Damage, Credit,
Earthquake, Fidelity, Financial Guaranty, Fire, Glass,
Inland Marine, Medical Malpractice, Multiple Peril -
Commercial, Multiple Peril - Farmowners, Multiple Peril -
Homeowners, Ocean Marine, Other Liability, Private
Passenger Auto - Liability, Private Passenger Auto-Other,
Private Passenger - Phys. Damage, Surety, Workers'
Compensation
Oklahoma Property, Casualty, Marine, Surety,
Workers' Comp.
Oregon Property, Casualty (including Workers' Compensation),
Marine and Transportation, Surety
Pennsylvania Auto Liability, Burglary and Theft, Elevator, Glass,
Livestock, Ocean Marine, Personal Property Floater, Water
Damage, Boiler & Machinery, Credit, Fidelity and Surety,
Inland Marine and Physical Damage, Mine and Machinery,
Other Liability, Property and Allied Lines, Worker's
Compensation
Rhode Island All line of insurance except life, annuities, accident &
health, title and mortgage guaranty
South Carolina Property, Casualty
South Dakota Fire & Allied Lines, Inland & Ocean Marine, Worker's
Compensation, Bodily Injury (No Auto), Property Damage
(No Auto), Bodily Injury (Auto), Property Damage (Auto),
Physical Damage (Auto), Fidelity & Surety Bonds, Glass,
Burglary & Theft, Boiler & Machinery, Aircraft, Credit
(Mortgage Guaranty), Crop Hail, Livestock
Texas Air Physical Damage, Aircraft Liability, Allied
Coverages, Auto Liability, Auto Physical Damage, Boiler &
Machinery, Burglary & Theft, Credit, Employers'
Liability, Fidelity & Surety, Fire, Forgery, Glass, Hail,
Inland Marine, Liability Other, Livestock, Ocean Marine,
Pre-Paid Legal Services, Rain, Reinsurance - all lines,
W.C. Empl. Liability
Utah Property, Surety, Liability (including veh., excl. dis),
Marine & Transport, Workers' Compensation, Vehicle
Liability
Virginia Fire, Miscellaneous Property, Homeowners Multiple Peril,
Commercial Multiple Peril, Inland Marine, Liability Other
than Auto, Automobile Liability, Automobile Physical
Damage, Boiler & Machinery
Vermont Same authority as state of domicile (Delaware) -Property,
Surety, Marine & Transportation, Casualty (including:
Vehicle, Liability, Burglary & Theft, Personal Property
Floater, Glass, Boiler & Machinery, Credit, Workers'
Compensation & Employers' Liability, Leakage & Fire
Extinguisher Equipment, Malpractice, Elevator, Congenital
Defects, Livestock, Entertainments and Miscellaneous
Washington Property, Marine and Transportation, Vehicle, General
Casualty, Surety
West Virginia Fire, Marine, Casualty, Surety
Wisconsin Fire, Inland Marine, and other Property Insurance, Ocean
Marine Insurance, Liability and Incidental Medical
Expense Insurance, Automobile and Aircraft Insurance,
Fidelity Insurance, Surety Insurance, Miscellaneous
Wyoming Property, Casualty, Surety, Fire, Marine and
Transportation
Virgin Islands Property and Casualty
XXXXXX SPECIALTY INSURANCE COMPANY
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
New York Accident and Health, Fire, Miscellaneous Property, Water
Damage, Burglary and Theft, Glass, Boiler and Machinery,
Elevator, Animal, Collision, Personal Injury Liability,
Property Damage Liability, Workers' Compensation and
Employers' Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and Inland
Marine and Marine Protection and Indemnity Insurance
CLEARWATER SELECT INSURANCE COMPANY
(FORMERLY OVERSEAS PARTNERS US REINSURANCE COMPANY)
CERTIFICATE OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Misc. Casualty, Surety including Official
Surety Bonds, Marine
Alaska Health, Property, Casualty (all clauses), Surety, Marine,
Wet Marine & Transportation
Arizona Accredited Reinsurer for - Casualty with workers'
compensation, Marine and Transportation, Property,
Surety, Vehicle
Arkansas Property, Casualty, Surety, Marine, Disability & Workers
Compensation
California Fire, Marine, Surety, Disability, Plate Glass, Liability,
Common Carrier Liability, Boiler and Machinery, Burglary,
Credit, Sprinkler, Automobile, Aircraft, Miscellaneous
Colorado Accident and Health, Crop, General Casualty, Motor
Vehicle (casualty), Professional Malpractice, Credit
(Casualty, Accident & Health), Fidelity and Surety,
General Property, Motor Vehicle (Property), Workers'
Compensation
Connecticut Reinsurance Only
Delaware Health, Credit Health, Property, Surety, Marine &
Transportation, Casualty including - Vehicle, Liability,
Burglary & Theft, Personal Property Floater, Glass,
Boiler & Machinery, Credit, Workers' Compensation &
Employers' Liability, Leakage & Fire Extinguisher
Equipment, Malpractice, Elevator, Congenital Defects,
Livestock, Entertainments, Miscellaneous
District of Columbia Aircraft (all perils), All Other A & H, Allied Lines,
Boiler and Machinery, Burglary and Theft, Collectively
Renewable A & H, Commercial Auto No-fault (PIP),
Commercial Auto Physical Damage, Commercial Multiple
Peril (Non-Liability), Credit, Credit A & H (Group and
Individual), Earthquake, Farmowners Multiple Peril,
Fidelity,
Financial Guaranty, Fire, Glass, Group Accident and
Health, Guaranteed Renewable A & H, Homeowners Multiple
Peril, Inland Marine, Medical Malpractice,
Non-cancellable A & H, Non-renewable for Stated Reasons
Only, Ocean Marine, Other Accident Only, Other Commercial
Auto Liability, Other Liability, Other Private Passenger
Auto Liability, Private Passenger Auto Physical Damage,
Property and Casualty, Surety, Workers' Compensation
Georgia Property, Marine and Transportation, Casualty (including
Workers' Compensation), Surety, Reinsurance Only
Hawaii Accident and Health or Sickness, Casualty, Marine,
Property, Surety, Vehicle
Idaho Casualty (including Workers' Comp), Disability (excluding
Managed Care), Marine and Transportation, Property,
Surety
Illinois Class 2 - Casualty, Fidelity & Surety (Accident & Health,
Vehicle, Liability, Workmen's Compensation, Burglary &
Forgery, Glass, Fidelity & Surety, Miscellaneous, Other
Casualty Risk, Contingent Losses), Livestock and Domestic
Animals
Class 3 - Fire and Marine, Etc. (Fire, Elements, War,
Riot and Explosion, Marine and Transportation, Vehicle,
Property Damage, Sprinkler Leakage and Crop, Other Fire
and Marine Risks, Contingent Losses
Indiana Class 2 - Accident and Health, Employer's Liability,
Burglary & Theft, Glass, Boiler & Machinery, Motor
Vehicle, Water Damage, Liability, Credit, Title, Fidelity
and Surety (excluding Bail Bonds), Miscellaneous, Legal
Expense
Class 3 - Property, Crops, Leakage and Fire Extinguisher
Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied Lines, Homeowners
Multiple Peril (incl. B.I.), Commercial Multiple Peril,
Earthquake, Growing Crops, Ocean Marine, Inland Marine,
Accident Only (Individual), Accident and Health
(Individual), Hospital and Medical Expense (Individual),
Group Accident and Health, Non-Cancellable Accident and
Health,
Workers' Compensation, Liability other than Auto (B.I.),
Liability other than Auto (P.D.), Auto Liability (B.I.),
Auto Liability (P.D.), Auto Physical Damage, Aircraft
Physical Damage, Fidelity, Surety, Glass, Burglary and
Theft, Boiler and Machinery
Kansas Fire, Windstorm & Hail, Extended Coverage, Additional
Perils on Growing Crops, Hail on Growing Crops, Optional
Perils, Sprinkler Leakage, Business Interruption,
Earthquake, Water Damage, Aircraft Hull, Ocean Marine,
Inland Marine, Rain, Automobile Physical Damage, Flood,
Homeowners Policies, Accident & Health, Automobile
Liability, General Liability, Workers' Compensation,
Fidelity, Surety & Forgery Bonds, Glass, Burglary, Theft
& Robbery, Boiler & Machinery, Credit, Malpractice
Liability, Livestock Mortality, Aircraft Liability, Cargo
Liability
Kentucky Health, Property, Casualty (no limitations), Surety,
Marine & Transportation
Louisiana Reinsurance Only - Health and Accident, Vehicle,
Liability, Worker's Compensation, Burglary and Forgery,
Glass, Fidelity and Surety, Fire and Extended Coverage,
Steam Boiler and Sprinkler Leakage, Crop and Livestock,
Marine and Transportation (Inland Marine), Miscellaneous
Maine Fire, Allied Lines, Farmowners Multiple Peril, Homeowners
Multiple Peril, Commercial Multiple Peril, Ocean Marine,
Inland Marine, Earthquake, Workers' Compensation, Other
Liability, Products Liability, Auto Liability, Auto Phys
Damage, Aircraft (all perils), Surety, Glass, Burglary
and Theft, Boiler and Machinery
Maryland Casualty (not including Vehicle Liability, Mortgage
Guaranty & Worker's Compensation), Health, Marine, Wet
Marine & Transportation, Property and Marine (excluding
Wet Marine and Transportation), Surety, Vehicle
Liability, Workers' Compensation
Massachusetts Reinsurance (Reinsurance Companies Only)
Michigan Disability, Property, Ocean Marine, Inland
Marine, Legal Expenses, Automobile Insurance - limited,
Casualty: Steam Boiler, Flywheel & Machinery, Casualty:
Workers' Compensation, Casualty: Liability, Casualty:
Automobile, Casualty: Plate Glass, Casualty: Sprinkler
and Water Damage, Casualty: Credit, Casualty: Burglary
and Theft, Casualty: Livestock, Casualty: Malpractice,
Casualty: Misc-Other, Disability coverage supplemental to
Auto Insurance, Surety & Fidelity
Minnesota Property, Marine, Boiler & Machinery, Accident and
Health, Workers' Compensation, Fidelity, Surety, Glass,
Burglary & Theft, Monies & Bullion, Personal Property
Floater, Water, Animal, Credit, Vehicle, Liability,
Elevator
Mississippi Fire and Allied Lines, Industrial Fire,
Casualty/Liability, Fidelity, Surety, Workers'
Compensation, Boiler and Machinery, Plate Glass, Trip
Accident and Baggage, Inland Marine, Ocean Marine,
Accident & Health, Legal, Auto Phy. Damage/Liab,
Guaranty, Aircraft, Home/Farm Owners
Missouri Qualified Reinsurer
Montana Property, Casualty, Surety, Marine, Disability
Nebraska Sickness and Accident Insurance, Property Insurance,
Credit Property, Glass Insurance, Burglary and Theft
Insurance, Boiler and Machinery Insurance, Liability
Insurance, Workers' Compensation & Employer's Liability,
Vehicle Insurance, Fidelity Insurance, Surety Insurance,
Credit Insurance, Marine Insurance, Miscellaneous
Insurance
Nevada Health, Property, Casualty, Surety, Marine &
Transportation
New Hampshire Approved Credit for Reinsurance
New Jersey Reinsurance Only - Fire and Allied Lines, Earthquake,
Growing Crops, Ocean Marine, Inland Marine, Workers'
Compensation & Employers' Liability, Automobile Liability
(BI), Automobile Liability (PD), Automobile Physical
Damage, Aircraft Physical Damage, Other Liability, Boiler
& Machinery, Fidelity & Surety, Credit, Burglary & Theft,
Glass,
Sprinkler Leakage & Water Damage, Livestock, Smoke or
Smudge, Physical Loss to Buildings, Radioactive
Contamination, Mechanical Breakdown/Power Failure,
Accident and Health
New Mexico Property, Marine and Transportation and Casualty and
Surety and Vehicle
New York Accident and Health, Fire, Miscellaneous Property, Water
Damage, Burglary and Theft, Glass, Boiler and Machinery,
Elevator, Animal, Collision, Personal Injury Liability,
Property Damage Liability, Workers' Compensation and
Employers' Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and Inland
Marine, Marine Protection and Indemnity and Credit
Unemployment Insurance
North Carolina Accident & Health, including Hospitalization (cancelable,
non-cancelable, credit-small loans, Credit-other than
small loans), Fire, Miscellaneous Property (extended
coverage and growing crops), Water Damage (including
sprinkler leakage - Commercial & Residential), Burglary
and Theft, Glass, Boiler and Machinery, Elevator, Animal,
Collision (Automobile and Other), Personal Injury
Liability (Automobile and Other), Property Damage
Liability (Automobile and Other), Workmen's Compensation
and Employer's Liability, Fidelity and Surety Insurance,
Credit Insurance, Motor Vehicle and Aircraft (Property
Damage, Fire, Theft, Compensation, Collision), Marine
Insurance (Inland and Ocean), Marine Protection and
Indemnity Insurance, Miscellaneous (Aircraft Voluntary
Settlement, Hole-in-One)
North Dakota Accident & Health, Property, Casualty
Ohio Accident & Health, Aircraft, Allied Lines, Boiler &
Machinery, Burglary & Theft, Collectively Renewable A &
H, Commercial Auto - Liability, Commercial Auto - No
Fault, Commercial Auto - Phys. Damage, Credit, Credit
Accident & Health, Earthquake, Fidelity, Financial
Guaranty, Fire, Glass, Group Accident & Health,
Guaranteed Renewable A & H, Inland Marine, Medical
Malpractice,
Multiple Peril - Commercial, Multiple Peril - Farmowners,
Multiple Peril - Homeowners, Noncancellable A & H,
Nonrenew - State Reasons (A&H), Ocean Marine, Other
Accident Only, Other Liability, Private Passenger Auto -
Liab., Private Passenger Auto-Other, Private Passenger -
Phys. Damage, Surety, Workers Compensation
Oklahoma Accident & Health, Property, Casualty, Marine, Vehicle,
Surety, Workers' Comp.
Oregon Property, Casualty (including Workers' Compensation),
Marine and Transportation, Surety, Health
Pennsylvania Accident and Health, Boiler and Machinery, Credit,
Fidelity and Surety, Inland Marine and Physical Damage,
Mine and Machinery, Other Liability, Property and Allied
Lines, Worker's Compensation, Auto Liability, Burglary
and Theft, Elevator, Glass Livestock, Ocean Marine,
Personal Property Floater, Water Damage
Puerto Rico Property and Casualty Reinsurance Exclusively
Rhode Island Business of all lines of insurance except life,
annuities, title and mortgage guaranty
South Carolina Accident/Health, Property, Casualty, Surety, Marine
South Dakota Health, Fire & Allied Lines, Inland & Ocean Marine,
Workers Compensation, Bodily Injury (No Auto), Property
Damage (No Auto), Bodily Injury (Auto), Property Damage
(Auto), Physical Damage (Auto), Fidelity & Surety Bonds,
Glass, Burglary & Theft, Boiler & Machinery, Aircraft,
Crop Hail, Livestock
Tennessee Property, Casualty, Surety, Vehicle
Texas Fire, Allied Coverages, Hail-growing crops only, Rain,
Inland Marine, Ocean Marine, Aircraft - Liability &
Physical Damage, Accident, Health, Workers' Compensation
& Employers' Liability, Employers' Liability, Automobile
- Liability & Physical Damage, Liability other than
Automobile, Fidelity & Surety, Glass, Burglary & Theft,
Boiler & Machinery, Credit, Livestock, Reinsurance on all
lines authorized to be written on a direct basis
Utah Accident & Health, Property, Liability,
Surety, Marine & Transportation, Vehicle Liability,
Professional Liability, Workers' Compensation
Vermont Accredited Reinsurer
Virginia Accredited Reinsurer
Washington Disability, Property, Marine & Transportation, Vehicle,
General Casualty, Surety
West Virginia Accident & Sickness, Fire, Marine, Casualty, Surety
Wisconsin Fire, Inland Marine, and other Property Insurance, Ocean
Marine Insurance, Disability Insurance, Liability and
Incidental Medical Expense Insurance, Automobile
Insurance, Fidelity Insurance, Surety Insurance, Credit
Insurance, Worker's Compensation Insurance, Legal Expense
Insurance, Credit Unemployment Insurance, Miscellaneous,
Aircraft Insurance
Wyoming Casualty, Disability, Fire, Marine & Transportation,
Mortgage, Property, Surety
SCHEDULE 7.1
EXISTING LIENS
1. During the second quarter of 2004, OARC pledged and placed on deposit at
Lloyd's of London the equivalent of L110 million of U.S. treasury notes on
behalf of Advent Capital (Holdings) PLC ("Advent"). Advent is 46.8% owned
by Fairfax and its affiliates, including 15.0% by the Borrower (7.51% by
OARC and 7.51% by Clearwater). OARC retains the right to withdraw the funds
at Lloyd's at any time upon 180 days advance written notice. The placement
of funds at Lloyd's will automatically terminate effective December 31,
2008 and any remaining funds at Lloyd's will revert to OARC at that time.
2. Cross-reference is made to the letters of credit listed on Schedule 5.5
Schedule 7.1
SCHEDULE 7.2
INVESTMENTS
1. Investments in entities listed on Schedule 5.12(b).
2. Cross-reference is made to the Guarantees listed as numbers 1 through 4 on
Schedule 7.3.
3. MFXchange Holdings Inc. ("MFX"). OARC owns 80 shares (7.4%) of the common
stock of MFX, with a fair value of $2,667,104 (statutory) ($2,419,525 GAAP)
as of June 30, 2005. The remainder of the capital stock of MFX is owned by
Fairfax (83.3%) and The North River Insurance Company (9.3%).
Schedule 7.2
SCHEDULE 7.3
EXISTING INDEBTEDNESS
Guarantees
1. Clearwater agreed to allow Ranger Insurance Company ("Ranger"), a subsidiary
of Fairfax, to attach an assumption of liability endorsement to certain Ranger
policies issued from July 1, 1999 to April 30, 2004, the effective termination
date of the agreement. Should Ranger fail to meet its obligations, Clearwater is
ultimately liable for any losses occurring prior to the effective date of the
termination, pursuant to the terms of the endorsements. The total amount of
potential exposure in connection with the endorsements is estimated at $5.6
million as of June 30, 2005, based on the subject policies' case outstanding
loss reserves. Ranger has met and continues to meet all of its obligations,
including those subject to this agreement, in the normal course of business, and
Clearwater does not anticipate making any payments under this guarantee. In
addition, Fairfax has indemnified Clearwater for any obligations under this
agreement.
2. As of July 14, 2000, OARC agreed to guarantee the performance of all of the
insurance and reinsurance contract obligations, whether incurred before or after
the agreement, of Compagnie Transcontinentale de Reassurance ("CTR"), a
subsidiary of Fairfax, in the event CTR became insolvent and CTR was not
otherwise indemnified under its guarantee agreement with a Fairfax affiliate.
The OARC guarantee was entered into as part of the redeployment of CTR's
business to OARC, and was terminated effective December 31, 2001. Under
Fairfax's ownership, CTR was dissolved and its assets and liabilities were
assumed by other Fairfax affiliates which have the responsibility for the
run-off of its liabilities. In addition, Fairfax has agreed to indemnify OARC
for all its obligations under its guarantee. OARC does not expect to make any
payments under this guarantee.
3. OARC agreed, as of April 1, 2002, to guarantee the prompt payment of all of
the insurance contract obligations, whether incurred before or after the
agreement, of Falcon Insurance Company (Hong Kong) Limited, a subsidiary of
Fairfax, in the event that Falcon becomes insolvent. OARC's potential exposure
in connection with this agreement is estimated to be $35.8 million at June 30,
2005. Additionally, Fairfax has agreed to indemnify OARC for any obligation
under this agreement. OARC anticipates that Falcon will meet all of its
obligations in the normal course of business and does not anticipate making any
payments under this guarantee that will require OARC to utilize the
indemnification from Fairfax.
4. In January 2004, in conjunction with the purchase by its subsidiary (O.R.E
Holdings) of a 45% interest in Xxxxxx Enterprises Private Limited ("CEPL"), an
Indian limited liability company, OARC agreed to provide a guarantee on behalf
of CEPL to facilitate CEPL's establishment of a credit facility in the amount of
up to $65 million. The guarantee is conditioned upon a pledge in favor of OARC
by the other shareholders of CEPL of assets with an aggregate value 1.5 times
the amount of the guarantee. As of the date hereof, the credit facility has not
been established and no guarantee has been provided.
Schedule 7.3
Letters of Credit
5. Cross-reference is made to the letters of credit issued by Bank of America
("BofA") that are listed on Schedule 5.5. Such letters of credit will terminate
on or before December 31, 2005 and will not be renewed at BofA beyond such date.
SCHEDULE 7.8
TRANSACTIONS WITH AFFILIATES
1. Cross-reference is made to the matters disclosed on Schedule 5.18(b), item 1
of Schedule 7.1, and items 1 through 4 of Schedule 7.3.
Schedule 7.8
SCHEDULE 10.2
ADMINISTRATIVE AGENT'S OFFICE;
CERTAIN ADDRESSES FOR NOTICES
ODYSSEY RE HOLDINGS CORP.:
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxxxx Xxxxxxxxx, Chief Financial Officer
ADMINISTRATIVE AGENT:
Administrative Agent's Office
(for payments and Requests for Credit Extensions):
Wachovia Bank, National Association
Charlotte Plaza Building
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx XX0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Syndication Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payment Instructions
Wachovia Bank, National Association
ABA Routing Xx. 000000000
Xxxxxxxxx, Xxxxx Xxxxxxxx
Account Number: _______________
Account Name: _________________
Attention: Syndication Agency Services
Other Notices as Administrative Agent:
Wachovia Bank, National Association
One Wachovia Center, 6th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
L/C ISSUER:
Wachovia Bank, National Association
One Wachovia Center, 6th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Schedule 10.2
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Schedule 10.2
24
EXHIBIT A
FORM OF REVOLVING LOAN NOTICE
Date: ___________, _____
To: Wachovia Bank, National Association, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of September
__, 2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among Odyssey Re Holdings Corp., a Delaware
corporation (the "Borrower"), the Lenders from time to time party thereto, and
Wachovia Bank, National Association, as Administrative Agent and L/C Issuer.
The undersigned hereby requests (select one):
A Borrowing of Revolving Loans A conversion or continuation of
Revolving Loans
1. On _________________________ (a Business Day).
2. In the amount of $____________________.
3. Comprised of _________________________________.
[Type of Revolving Loan requested]
4. For LIBOR Loans: with an Interest Period of ______ months.
The Revolving Borrowing, if any, requested herein complies with the
provisos to the first sentence of Section 2.1 of the Agreement.
ODYSSEY RE HOLDINGS CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit A-1
EXHIBIT B
FORM OF REVOLVING NOTE
______________
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to _____________________ or registered assigns (the "Lender"), in accordance
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Revolving Loan from time to time made by the Lender to the
Borrower under that certain Credit Agreement, dated as of September 23, 2005 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement;" the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders from time to time party
thereto, and Wachovia Bank, National Association, as Administrative Agent and
L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Loan from the date of such Revolving Loan until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. Upon the occurrence and continuation of one or
more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Revolving Loans
made by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also
attach schedules to this Note and endorse thereon the date, amount and maturity
of its Revolving Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
Exhibit B-1
ODYSSEY RE HOLDINGS CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF OUTSTANDING
TYPE OF AMOUNT OF END OF PRINCIPAL OR PRINCIPAL
REVOLVING REVOLVING INTEREST INTEREST PAID BALANCE THIS NOTATION
DATE LOAN MADE LOAN MADE PERIOD THIS DATE DATE MADE BY
---------- --------- --------- -------- ------------- ------------ --------
Exhibit B-2
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ____________
To: Wachovia Bank, National Association, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of September
23, 2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement" the terms defined therein being used
herein as therein defined), among Odyssey Re Holdings Corp, a Delaware
corporation (the "Borrower"), the Lenders from time to time party thereto, and
Wachovia Bank, National Association, as Administrative Agent and L/C Issuer.
The undersigned Responsible Officer hereby certifies as of the date hereof
that he/she is the _______________________________________ of the Borrower, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal YEAR-END financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.1(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal QUARTER-END financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.1(b) of the Agreement for the fiscal quarter of the
Borrower ended as of the above date. Such financial statements fairly present
the financial condition, results of operations and cash flows of the Borrower
and its Subsidiaries in accordance with GAAP as at such date and for such
period, subject only to normal year-end audit adjustments and the absence of
footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
3. A review of the activities of the Borrower during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such
Exhibit C-1
fiscal period the Borrower performed and observed all its Obligations under the
Loan Documents, and
[SELECT ONE:]
[TO THE BEST KNOWLEDGE OF THE UNDERSIGNED DURING SUCH FISCAL PERIOD, THE
BORROWER PERFORMED AND OBSERVED EACH COVENANT AND CONDITION OF THE LOAN
DOCUMENTS APPLICABLE TO IT.]
--OR--
[THE FOLLOWING COVENANTS OR CONDITIONS HAVE NOT BEEN PERFORMED OR OBSERVED
AND THE FOLLOWING IS A LIST OF EACH SUCH DEFAULT AND ITS NATURE AND STATUS:]
4. The representations and warranties of the Borrower contained in Article
V of the Agreement, and any representations and warranties of any Credit Party
that are contained in any document furnished at any time under or in connection
with the Loan Documents, are true and correct on and as of the date hereof,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Compliance Certificate, the
representations and warranties contained in subsections (a) and (b) of Section
5.5 of the Agreement shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.1 of the
Agreement, including the statements in connection with which this Compliance
Certificate is delivered.
5. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________, ________.
ODYSSEY RE HOLDINGS CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit C-2
For the Quarter/Year ended ___________________ ("Statement Date")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. SECTION 7.14(A) - MAXIMUM TOTAL DEBT TO CAPITALIZATION RATIO.
A. Consolidated Indebtedness at Statement Date
1. Aggregate amount of all Indebtedness of the Borrower and its
Subsidiaries:
(a) all obligations of the Borrower and its Subsidiaries for borrowed $_____________
money and all obligations of the Borrower and its Subsidiaries evidenced by
bonds, debentures, notes, loan agreements or other similar instruments
(excluding the Convertible Debt):
(b) all direct or contingent obligations of the Borrower and its $_____________
Subsidiaries arising under letters of credit (including standby and
commercial), bankers' acceptances, bank guaranties, surety bonds and
similar instruments:
(c) net obligations of the Borrower and its Subsidiaries under any $_____________
Swap Contract:
(d) all obligations of the Borrower and its Subsidiaries to pay the $_____________
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business and, in each case, not past due
for more than 60 days after the date on which such trade account payable
was created):
(e) indebtedness (excluding prepaid interest thereon) secured by a $_____________
Lien on property owned or being purchased by the Borrower and its
Subsidiaries (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness shall
have been assumed by the Borrower and its Subsidiaries or is limited in
recourse:
(f) capital leases and Synthetic Lease Obligations: $_____________
(g) all obligations of the Borrower and its Subsidiaries to purchase, $_____________
redeem, retire, defease or otherwise make any payment in respect of any
Equity Interest in the
Exhibit C-3
Borrower and its Subsidiaries or any other Person, valued, in the case of a
redeemable preferred interest, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends:
(h) all Guarantees of the Borrower and its Subsidiaries in respect of $_____________
any of the foregoing[; provided, however, for purposes of calculating the
Total Debt to Capitalization Ratio, only the amount of any outstanding
claim against any of the Guarantees set forth in items 1, 2 and 3 on
Schedule 7.3 which has not been indemnified and paid by Fairfax within 10
days after such claim is made against any of such Guarantees shall be
included in the calculation of Consolidated Indebtedness:]
(i) Aggregate amount of Convertible Debt in excess of 15% of Total $_____________
Capitalization
(j) Total (Lines I.A.1.(a) + (b) + (c) + (d) + (e) + (f) + (g) + (h) + $_____________
(i))
B. Consolidated Net Worth at Statement Date
1. Net worth of the Borrower and its Subsidiaries, determined on a $_____________
consolidated basis in accordance with GAAP but excluding any preferred stock or
other class of Equity Interest that, by its stated terms (or by the terms of any
class of Equity Interest issuable upon conversion thereof or in exchange
therefor), or upon the occurrence of any event, matures or is mandatorily
redeemable, or is redeemable at the option of the holders thereof, in whole or
in part and excluding the effect of Statement of Financial Accounting Standards
No. 115 issued by the Financial Accounting Standards Board:
2. Aggregate amount of Convertible Debt equal to or less than 15% of Total
Capitalization
C. Total Debt to Capitalization Ratio (Line I.A.1.(j)) / (Line I.A.1.(j)
+ Line I.B.1 + Line I.B.2):
D. Maximum: 0.30 to 1.00
II. SECTION 7.14(B) - MINIMUM STATUTORY SURPLUS.
A. Total amount shown as "surplus as regards policyholders" on line 35,
column 1, page 3 of the Annual Statement of OARC:
Exhibit C-4
B. Minimum: $1,000,000,000
III. SECTION 7.14(C) - MINIMUM RISK-BASED CAPITAL.
A. "Total adjusted capital" (within the meaning of the Risk-Based Capital $_____________
for Insurers Model Act as promulgated by the NAIC as of the date
hereof (the "Model Act")) of OARC:
B. "Authorized Control Level Risk-Based Capital" (within the meaning of $_____________
the Model Act) of OARC:
C. Risk-Based Capital (Line III.A) / (2 x Line III.B.): ____%
D. Minimum: 150%
IV. SECTION 7.1(L) - LIENS.
A. Aggregate amount of Liens (other than Liens specified in clauses (a) $_____________
through (k) of Section 7.1) on other than stock of any Insurance
Subsidiary securing Obligations of the Borrower and its Subsidiaries:
B. Maximum aggregate amount at any time outstanding: $ 25,000,000
V. SECTION 7.2 - INVESTMENTS.
A. Investments permitted under Section 7.2(b)(iv): $_____________
B. Maximum aggregate amount of such Investments outstanding: $ 50,000,000
VI. SECTION 7.6(B) - RESTRICTED PAYMENTS.
A. Aggregate amount of dividends, payments, distributions, acquisitions, $_____________
purchases, retirements or redemptions made by the Borrower during any
fiscal year:
B. 20% of Consolidated Net Income for such fiscal year: $_____________
C. 50% of Consolidated Net Worth at end of such fiscal year: $_____________
D. Maximum (the lesser of (i) the greater of (A) Line VI.B and (B) $_____________
$15,000,000 and (ii) Line VI.C):
E. Maximum aggregate amount of dividends and distributions to Fairfax and $ 30,000,000
its Affiliates during any fiscal year:
Exhibit C-5
EXHIBIT D
FORM OF
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, the Letters of Credit included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________ [and is an
Affiliate/Approved Fund of [identify Lender](1)]
3. Borrower(s): Odyssey Re Holdings Corp.
4. Administrative Agent: Wachovia Bank, National Association, as the
administrative agent under the Credit Agreement
5. Credit Agreement: The Credit Agreement, dated as of September 23, 2005
among Odyssey Re Holdings Corp., the Lenders parties
thereto, and
----------
(1) Select as applicable.
Exhibit D-1
Wachovia Bank, National Association, as
Administrative Agent and L/C Issuer
6. Assigned Interest:
Aggregate Amount of
Commitment For all Amount of Commitment Percentage Assigned
Facility Assigned(2) Lenders* Assigned* of Commitment(3) CUSIP Number
-------------------- ------------------- -------------------- ------------------- ------------
___________(4) $____________ $_____________ __________%
___________ $____________ $_____________ __________%
___________ $____________ $_____________ __________%
7. [Trade Date: __________________](5)
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
----------
(2) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.,
"Revolving Credit Commitment," "Term Loan Commitment," etc.).
(3) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(4) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.,
"Revolving Credit Commitment," "Term Loan Commitment," etc.).
(5) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
Exhibit D-2
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
---------------------------------
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------------
Title:
---------------------------------
[Consented to and](6) Accepted:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
---------------------------------
Title:
------------------------------
[Consented to:](7)
By:
---------------------------------
Title:
------------------------------
----------
(6) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
(7) To be added only if the consent of the Borrower and/or other parties (e.g.
L/C Issuer) is required by the terms of the Credit Agreement.
Exhibit D-3
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.1 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
Exhibit D-4
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
Exhibit D-5
EXHIBIT E
FORM OF SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "Agreement") dated as of September
23, 2005 is by and between [NAME OF CREDIT PARTY], a _______ corporation (the
"Pledgor"), and WACHOVIA BANK, NATIONAL ASSOCIATION (the "Administrative
Agent"), as Administrative Agent for the Lenders party to that certain Credit
Agreement dated as of the date hereof among [Odyssey Re Holdings Corp.,] the
Pledgor, the other Credit Parties thereto, the Lenders party thereto and the
Administrative Agent (as amended, restated, or otherwise modified from time to
time, the "Credit Agreement"; terms defined in the Credit Agreement and not
otherwise defined herein shall be used herein as defined in the Credit
Agreement).
1. Grant of Security Interest. As security for any and all Indebtedness (as
defined below), the Pledgor hereby irrevocably and unconditionally pledges and
grants a security interest in and assigns and transfers to the Administrative
Agent, for the ratable benefit of the Lenders (including the Administrative
Agent in its capacity as such), all of the Pledgor's right, title and interest
in and to the property of the Pledgor referred to in Exhibit A attached hereto
and incorporated herein, as hereafter amended or supplemented from time to time
(the "L/C Collateral").
2. Indebtedness. "Indebtedness" means all debts, obligations or
liabilities, now or hereafter existing, absolute or contingent, whether
voluntary or involuntary, due or not due, incurred directly or indirectly, or
acquired by the Lenders by assignment or otherwise (including, without
limitation, interest accruing after the maturity of such debts, obligations or
liabilities and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Pledgor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), of the Pledgor to the
Lenders arising out of or in connection with any Secured Letter of Credit issued
by the L/C Issuer (including by or through an offshore branch or affiliate of
the L/C Issuer) for the account of the Pledgor, any reimbursement, indemnity or
similar agreements given by the Pledgor to the L/C Issuer and the Lenders in
connection therewith, and any amendment, substitution, extension or replacement
of any of the foregoing, and all obligations and liabilities of the Pledgor to
the L/C Issuer and the Lenders hereunder
3. Maintenance of Collateral.
(a) At all times prior to the date upon which the Obligations are paid
in full, the Commitments are terminated and the Letters of Credit have
expired (the "Release Date"), the Pledgor agrees to maintain as security
for the Indebtedness, L/C Collateral of a type described on Schedule I
hereto with a L/C Collateral Balance in an amount not less than the
aggregate principal amount of L/C Obligations attributable to Secured
Letters of Credit issued for the account of the Pledgor. For purposes
hereof, the "L/C Collateral Balance" means, with respect to the Pledgor,
the sum of the Collateral Value of each type of L/C Collateral held in a
Custodial Account of the Pledgor multiplied by the Collateral Coverage
Percentage set forth on Schedule I hereto for such type of L/C Collateral.
The
Exhibit E-1
"Collateral Value" of government, municipal or corporate obligations or
bonds or commercial paper shall be determined from the most recent closing
bid price for such obligations, bonds or commercial paper obtained from the
Wall Street Journal, or such other reputable reporting service as the
Administrative Agent may select. If such closing bid price is not available
in the Wall Street Journal, or such other reputable reporting service as
the Administrative Agent may select, the Collateral Value shall be the
value quoted to the Administrative Agent by a reputable brokerage firm
selected by the Administrative Agent
(b) If, at any time there is a Collateral Deficiency with respect to
the Pledgor, the Pledgor shall no later than fourteen (14) days from the
date of notice thereof by the Administrative Agent, pledge additional L/C
Collateral to cure such Collateral Deficiency. If the Pledgor fails to
pledge additional L/C Collateral to cure its Collateral Deficiency within
the time provided above, the Administrative Agent may immediately exercise
its rights and remedies set forth in Section 4 of this Agreement, including
without limitation, liquidating all or part of the L/C Collateral. The
Pledgor acknowledges and agrees that notice of a Collateral Deficiency may
be given orally or in writing, including facsimile. Any such written notice
to the Pledgor shall be given in accordance with the notice provisions of
the Credit Agreement and shall be deemed received by the Pledgor as
provided therein. Any such oral notice to the Pledgor and any written
confirmation thereof shall be given in accordance with Section 15 of this
Agreement and shall be deemed received by the Pledgor as provided herein.
4. Pledgor's Covenants, Warranties and Representations. The Pledgor
covenants, represents and warrants that unless compliance is waived by the
Administrative Agent in writing:
(a) The Pledgor owns all of the L/C Collateral free and clear of any
and all liens, encumbrances, or interests of any third parties other than
the security interest of the Administrative Agent, and will keep all of the
L/C Collateral free of all liens, claims, security interests and
encumbrances of any kind or nature, whether voluntary or involuntary,
except the security interest of the Administrative Agent.
(b) The Pledgor shall, at the Pledgor's expense, take all actions
necessary or advisable from time to time to maintain the first priority and
perfection of said security interest and shall not take any actions that
would alter, impair or eliminate said priority or perfection.
(c) The Pledgor agrees to pay prior to delinquency all taxes, charges,
liens and assessments against the L/C Collateral, and upon the failure of
the Pledgor to do so, the Administrative Agent at its option may pay any of
them and shall be the sole judge of the legality or validity thereof and
the amount necessary to discharge the same, such payments constituting
Indebtedness hereunder.
(d) The Pledgor's exact legal name is correctly set forth on Exhibit B
hereto. The Pledgor will provide the Administrative Agent with at least 30
days' prior written notice of any change in the Pledgor's name or identity.
Exhibit E-2
(e) The Pledgor's chief executive office is, and has been for the
four-month period preceding the date hereof (or, if less, the entire period
of the existence of the Pledgor), located in the state specified on Exhibit
B hereto. In addition, the Pledgor is an organization of the type and (if
not an unregistered entity) is incorporated in or organized under the laws
of the state specified on Exhibit B hereto. The Pledgor shall give the
Administrative Agent at least thirty (30) days notice before changing the
location of its chief executive office, type of organization, business
structure or state of incorporation or organization.
(f) The Pledgor's organizational identification number, if any,
assigned by the state of incorporation or organization is correctly set
forth on Exhibit B hereto. The Pledgor shall promptly notify the
Administrative Agent (i) of any change of its organizational identification
number, or (ii) if the Pledgor does not have an organizational
identification number and later obtains one, of such organizational
identification number.
(g) All investment property included in L/C Collateral is held by the
Pledgor pursuant to the Federal Reserve System's treasury direct system.
5. Powers of the Administrative Agent. At any time, without notice unless
expressly required elsewhere in this Agreement, and at the expense of the
Pledgor, the Administrative Agent in its name or in the name of the applicable
Pledgor may, but shall not be obligated to:
(a) Collect by legal proceedings or otherwise, endorse, receive and
receipt for all dividends, interest, principal payments and other sums now
or hereafter payable upon or on account of the L/C Collateral.
(b) Make any compromise or settlement it deems desirable or proper
with reference to the L/C Collateral.
(c) Insure, process and preserve the L/C Collateral.
(d) Participate in any recapitalization, reclassification,
reorganization, consolidation, redemption, stock split, merger or
liquidation of any issuer of securities which constitute L/C Collateral,
and in connection therewith may deposit or surrender control of the L/C
Collateral, accept money or other property in exchange for the L/C
Collateral, and take such action as it deems proper in connection
therewith, and any money or property received on account of or in exchange
for the L/C Collateral shall be applied to the Indebtedness or held by the
Administrative Agent thereafter as L/C Collateral pursuant to the
provisions hereof.
(e) Pursuant to the terms of the Credit Agreement, cause L/C
Collateral to be transferred to its name or to the name of its nominee or
the name of a depository or its nominee.
Exhibit E-3
(f) Obtain from any custodian or securities intermediary holding the
L/C Collateral any and all information with respect to the L/C Collateral,
without any further consent of or notice to the Pledgor.
(g) Exercise as to the L/C Collateral all the rights, powers and
remedies of an owner necessary to exercise its rights under this Agreement,
including without limitation, the right to sell or otherwise dispose of all
or any part of the L/C Collateral following an Event of Default. The
Administrative Agent shall not vote any securities constituting L/C
Collateral except as instructed by the Pledgor, until an Event of Default
has occurred and the Administrative Agent has delivered the Custodian a
notice of exclusive control in respect of the L/C Collateral.
The Pledgor hereby grants the Administrative Agent an irrevocable proxy and
irrevocably appoints the Administrative Agent its attorney-in-fact to carry out
any of the powers granted by this paragraph. Without limiting the generality of
the foregoing, the Pledgor hereby irrevocably appoints the Administrative Agent
its attorney-in-fact to execute and deliver any necessary stock powers,
endorsements, assignments or other documents and agreements necessary to carry
out any of the foregoing powers. The foregoing appointments shall be deemed
coupled with an interest of the Administrative Agent and shall not be revoked
without the Administrative Agent's written consent. To the extent permitted by
law, the Pledgor hereby ratifies all said attorney-in-fact shall lawfully do by
virtue hereof. The Pledgor shall make and deliver to the Administrative Agent
such powers of attorney, consents or waivers (in addition to the power of
attorney and consent set forth in this Section 5) as the Administrative Agent
shall reasonably request in order to permit the Administrative Agent to exercise
its rights under this Section 5 and this Agreement.
6. Remedies. If an Event of Default occurs, the Administrative Agent may do
any one or more of the following:
(a) Exercise as to any or all of the L/C Collateral all the rights,
powers and remedies of an owner; provided, however, that, the
Administrative Agent shall not have the right to vote any securities
constituting L/C Collateral until the Administrative Agent has provided the
Custodian a notice of exclusive control in respect of the L/C Collateral.
(b) Enforce the security interest given hereunder pursuant to the
Uniform Commercial Code as in effect in any applicable state (the "UCC")
and any other applicable law.
(c) Sell all or any part of the L/C Collateral at public or private
sale in accordance with the UCC, without advertisement, in such manner and
order as the Administrative Agent may elect. The Administrative Agent may
purchase the L/C Collateral for its own account at any such sale. The
Administrative Agent shall give the applicable Pledgor such notice of any
public or private sale as may be required by the UCC; provided that, if the
Administrative Agent fails to comply with this sentence in any respect, its
liability for such failure shall be limited to the liability (if any)
imposed on it as a matter of law under the UCC. The Pledgor acknowledges
that L/C Collateral may be sold at a loss to the Pledgor, and that, in such
event, the Administrative Agent shall have
Exhibit E-4
no liability or responsibility to the Pledgor for such loss. The Pledgor
further acknowledges that a private sale may result in less proceeds than a
public sale.
(d) Enforce the security interest of the Administrative Agent in any
deposit account which is part of the L/C Collateral by applying such
account to the Indebtedness.
(e) Exercise any other remedy provided under this Agreement or by any
applicable law. The Pledgor acknowledges that all such rights and remedies
are cumulative, and the exercise of any right or remedy shall not preclude
the further exercise of any other right or remedy.
(f) Comply with any applicable state or federal law requirements in
connection with a disposition of the L/C Collateral and such compliance
will not be considered to affect adversely the commercial reasonableness of
any sale of the L/C Collateral.
(g) Sell the L/C Collateral without giving any warranties as to the
L/C Collateral. The Administrative Agent may specifically disclaim any
warranties of title or the like. This procedure will not be considered to
affect adversely the commercial reasonableness of any sale of the L/C
Collateral.
7. Waivers. The Administrative Agent shall be under no duty or obligation
whatsoever (a) to make or give any presentment, demands for performances,
notices of nonperformance, protests, notices of protest or notices of dishonor
in connection with any obligations or evidences of indebtedness held by the
Administrative Agent as L/C Collateral, or in connection with any obligation or
evidences of indebtedness which constitute in whole or in part the Indebtedness,
or (b) to give the Pledgor notice of, or to exercise, any subscription rights or
privileges, any rights or privileges to exchange, convert or redeem or any other
rights or privileges relating to or affecting any L/C Collateral.
8. Custody of Collateral at Custodian.
(a) On or prior to the date hereof and upon any Person becoming a
Pledgor hereunder, the Pledgor shall have established with the Custodian,
and at all times thereafter until the Indebtedness of the Pledgor shall
have been indefeasibly paid in full and this Agreement is terminated in
accordance with its terms, the Pledgor shall maintain with the Custodian
the accounts listed on Exhibit A hereto (the "Collateral Accounts," and
each a "Collateral Account").
(b) With respect to each Collateral Account and the L/C Collateral,
the Pledgor shall cause the Custodian to execute and deliver to the
Administrative Agent on the date hereof a Collateral Account Control
Agreement in the form of Exhibit C hereto.
(c) The Pledgor shall, no later than the date hereof, cause the
Custodian to title each Collateral Account to reflect the security interest
of Administrative Agent for the ratable benefit of the Lenders therein.
Exhibit E-5
(d) The Pledgor hereby agrees that funds contained in the Collateral
Accounts shall be invested in L/C Collateral and only as permitted pursuant
to the terms of this Agreement and the Credit Agreement.
9. Indemnity Regarding the Custodian. If the Administrative Agent permits
any of the L/C Collateral to be maintained at a Custodian, the Pledgor hereby
agrees to indemnify, defend and hold harmless the Administrative Agent, its
successors and assigns and its directors, officers, employees and agents, from
and against any and all losses, liabilities, damages, obligations, deficiencies,
payments, costs and expenses (including, without limitation, costs and expenses
of any and all actions, suits, proceedings, arbitrations, demands, assessments,
judgments, settlements, compromises relating thereto and reasonable attorneys'
fees and disbursements in connection therewith, and including allocated costs of
in-house counsel) sustained or incurred by the Administrative Agent or any other
indemnitee in any way arising from or related to the Administrative Agent's
actions with respect to the Custodian as contemplated herein or contemplated by
any agreement with or notice to the Custodian, except such as are due to the
Administrative Agent's willful misconduct or gross negligence.
10. New or Substituted L/C Collateral. The Pledgor may add a new Custodial
Account as "L/C Collateral" under this Agreement, and/or terminate a Custodial
Account or remove a Custodial Account as L/C Collateral hereunder, in each case
by executing and delivering to the Administrative Agent a completed supplement
to this Agreement in the form of Exhibit D (each, a "Pledge Supplement");
provided that (i) prior to or concurrently with the addition of any new
Custodial Account, the Pledgor shall deliver or cause to be delivered to the
Administrative Agent a true and correct copy of a statement of such Custodial
Account prepared by the Custodian thereof, indicating the contents of such
Custodial Account as of a recent date, a new Collateral Account Control
Agreement (or supplement to an existing Collateral Account Control Agreement)
executed by the Custodian and the Pledgor, evidencing the establishment of such
Custodial Account and the perfection of the security interest of the
Administrative Agent therein, and (if applicable) a copy of any new Collateral
Account Control Agreement with respect to such Custodial Account, and (ii) the
Pledgor may terminate a Custodial Account or remove a Custodial Account as L/C
Collateral hereunder unless, immediately after giving effect thereto, (A) the
Pledgor shall have delivered to the Administrative Agent an L/C Collateral
Balance Report evidencing that the L/C Collateral Balance (with respect to all
remaining Custodial Accounts of the Pledgor and all other L/C Collateral pledged
by the Pledgor pursuant to any Credit Document) would equal or exceed the sum of
the stated amount of the Pledgor's Secured Letters of Credit and (B) no other
Default or Event of Default would exist. The Pledgor hereby authorizes the
Administrative Agent to attach each such Pledge Supplement to this Agreement,
and agrees that all L/C Collateral listed or referred to on any Pledge
Supplement shall for all purposes be deemed L/C Collateral hereunder and shall
be subject to the provisions hereof.
11. Costs. All advances, charges, costs and expenses, including reasonable
attorneys' fees, incurred or paid by the Administrative Agent in exercising any
right, power or remedy conferred by this Agreement or in the enforcement
thereof, and including the charges and expenses of the Administrative Agent's
custody unit or of any Custodian, shall become a part of the Indebtedness
secured hereunder and shall be paid to the Administrative Agent by the Pledgor
immediately and without demand, with interest thereon at an annual rate equal to
the highest rate
Exhibit E-6
of interest of any Indebtedness secured by this Agreement (or, if there is no
such interest rate, at the maximum interest rate permitted by law for interest
on judgments). Such costs and attorneys' fees shall include, without limitation,
the allocated cost of in-house counsel.
12. Notices. To the extent that oral notification is provided for or agreed
to herein, such oral notification may be made by telephone to the number(s) set
forth on the signature page for the Pledgor; provided that (i) any oral
notification in person or at any other telephone number shall constitute
notification hereunder (it being understood and agreed that a voicemail message
shall in no event constitute notification hereunder) and (ii) any oral
notification shall be promptly confirmed in writing, including by facsimile.
13. Miscellaneous.
(a) Any waiver, express or implied, of any provision hereunder and any
delay or failure by the Administrative Agent to enforce any provision shall
not preclude the Administrative Agent from enforcing any such provision
thereafter.
(b) The Pledgor hereby authorizes the Administrative Agent to file one
or more financing statements describing all or part of the Pledgor's L/C
Collateral, and continuation statements, or amendments thereto, relative to
all or part of the Pledgor's L/C Collateral as authorized by applicable
law. Such financing statements, continuation statements and amendments will
contain any other information required by the UCC for the sufficiency or
filing office acceptance of any financing statement, continuation statement
or amendment, including whether the Pledgor is an organization, the type of
organization and any organizational identification number issued to the
Pledgor. The Pledgor agrees to furnish any such information to the
Administrative Agent promptly upon request.
(c) The Pledgor shall, at the request of the Administrative Agent,
execute such other agreements, documents or instruments in connection with
this Agreement as the Administrative Agent may reasonably deem necessary to
evidence or perfect the security interests granted herein, to maintain the
first priority of the security interests, or to effectuate the rights
granted to the Administrative Agent herein.
(d) This Agreement shall be governed by and construed according to the
internal laws of the State of New York, except as otherwise required by
mandatory provisions of law and except to the extent that remedies are
governed by the laws of any other jurisdiction. The Pledgor hereby
irrevocably (i) submits to the non-exclusive jurisdiction of any United
States Federal or State court sitting in New York, New York in any action
or proceeding arising out of or relating to this Agreement, and (ii) waives
to the fullest extent permitted by law any defense asserting an
inconvenient forum in connection therewith. Service of process by the
Administrative Agent in connection with such action or proceeding shall be
binding on the Pledgor if sent to the Pledgor by registered or certified
mail at its address specified below. The Pledgor agrees that the
Administrative Agent may disclose to any prospective purchaser and any
purchaser of all
Exhibit E-7
or part of the Indebtedness any and all information in the Administrative
Agent's possession concerning the Pledgor, this Agreement and the L/C
Collateral.
(e) Any term used or defined in the UCC and not defined in this
Agreement has the meaning given to the term in the UCC, when used in this
Agreement.
(f) This Agreement shall benefit the Administrative Agent's successors
and assigns and shall bind the Pledgor's successors and assigns, except
that the Pledgor may not assign its rights and obligations under this
Agreement. This Agreement shall bind all parties who become bound as a
debtor with respect to the Indebtedness.
(g) All rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies otherwise provided by law. Any single
or partial exercise of any right or remedy shall not preclude the further
exercise of any other right or remedy.
(h) In all cases where more than one party executes this Agreement,
all words used herein in the singular shall be deemed to have been used in
the plural where the context and construction so require, and the
obligations and undertakings hereunder are joint and several.
14. WAIVER OF JURY TRIAL. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
PLEDGOR AND THE ADMINISTRATIVE AGENT EACH WAIVE TRIAL BY JURY WITH RESPECT TO
ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS AGREEMENT.
15. NOTICE OF FINAL AGREEMENT. THIS WRITTEN SECURITY AGREEMENT AND ANY
OTHER DOCUMENTS EXECUTED IN CONNECTION WITH THIS SECURITY AGREEMENT REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
Exhibit E-8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
[NAME OF CREDIT PARTY]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit E-9
Acknowledged and Accepted:
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ADDRESS FOR NOTICES TO THE ADMINISTRATIVE AGENT:
Wachovia Bank, National Association
One Wachovia Center, 6th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Exhibit E-10
EXHIBIT B
PLEDGOR'S ORGANIZATIONAL INFORMATION
Chief Executive Office for Pledgor:
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Pledgor's
organizational
identification if
any, assigned by
the state or
Pledgor's state Organizational jurisdiction of Taxpayer
Type of of identification incorporation or Identification
Pledgor organization incorporation number organization(8) Number (TIN)(9)
------- ------------ --------------- -------------- ----------------- ---------------
PLEDGOR'S CONTACT INFORMATION FOR NOTICE PURPOSES
Pledgor acknowledges that the contact Address for Notices (if different from
information below is correct above):
(Initial Here) ___
________________________________________
Telephone Numbers: 000-000-0000 Street Address
________________________________________
City State Zip
Facsimile, telecopy or similar
number for notices: 000-000-0000
Electronic Mail: xxxxxx@xxxxxxxxx.xxx
----------
(8) If no organizational identification number has been assigned enter "None".
(9) To be used for tax reporting purposes with respect to the Collateral.
Exhibit E-11
EXHIBIT C
FORM OF COLLATERAL ACCOUNT CONTROL AGREEMENT
THIS COLLATERAL ACCOUNT CONTROL AGREEMENT, dated as of September 23, 2005
(this "Agreement"), is made among [Name of Credit Party] ("Pledgor"), Wachovia
Bank, National Association ("Administrative Agent") and Xxxxxxx Bank
("Custodian"). Except as otherwise defined herein, all capitalized terms used
herein and defined the Collateral Agreement (as defined below) shall be sued
herein as therein defined.
WITNESSETH:
WHEREAS, [Odyssey Re Holdings Corp., a Delaware corporation,] Pledgor and
the other Credit Parties named therein, the Lenders named therein and
Administrative Agent have entered into a Credit Agreement, dated as of the date
hereof (as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Credit Extensions to the Credit Parties
and the issuance of, and participation in, Letters of Credit for the account of
the Borrowers upon the terms and subject to the conditions set forth therein;
and
WHEREAS, in connection with and as a condition to the consummation of the
transactions contemplated by the Credit Agreement, Pledgor, the other Pledgors
named therein and Administrative Agent have entered into a Pledge and Security
Agreement, dated as of the date hereof ("Collateral Agreement"), pursuant to
which Pledgor has granted to Administrative Agent, for the ratable benefit of
the Lenders (including the L/C Issuer in its capacity as such) and
Administrative Agent (collectively, the "Secured Parties"), a security interest
in the Account (as hereinafter defined) and the assets held therein from time to
time and the other Collateral in order to secure the repayment of the Secured
Obligations; and
WHEREAS, Pledgor, Administrative Agent and Custodian are entering into this
Agreement to perfect the security interest of Administrative Agent in the
Account and the assets held therein from time to time and the other Collateral;
and
WHEREAS, Administrative Agent and Pledgor have requested Custodian to hold
the Collateral and to perform certain other functions as more fully described
herein; and
WHEREAS, Custodian has agreed to act on behalf of Administrative Agent and
Pledgor in respect of Collateral delivered to Custodian by Pledgor for the
benefit of the Secured Parties, subject to the terms hereof;
NOW THEREFORE, in consideration of the mutual promises set forth hereafter,
the parties hereto agree as follows:
Exhibit E-12
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1.1 "Account" shall mean [Account Name(10) AND Number] established and
maintained PURSUANT to this Agreement in which Collateral shall be deposited by
Pledgor and pledged to Administrative Agent for the ratable benefit of the
Secured Parties and any demand deposit account established and maintained in
connection therewith.
1.2 "Authorized Person" shall be any person, whether or not an officer or
employee of Administrative Agent or Pledgor, duly authorized by Administrative
Agent or Pledgor, respectively, to give Written Instructions on behalf of
Administrative Agent or Pledgor, respectively, such persons to be designated in
a Certificate of Authorized Persons which contains a specimen signature of such
person.
1.3 "Collateral" shall mean the Account, any demand deposit account
established and maintained in connection therewith and all other investment
property and all proceeds thereof held in the Account.
1.4 "Depository" shall mean the Treasury/Reserve Automated Debt Entry
System maintained at the Federal Reserve Bank of New York for receiving and
delivering securities, the Depository Trust Company and any other clearing
corporation within the meaning of Section 8-102 of the UCC or otherwise
authorized to act as a securities depository or clearing agency, and their
respective successors and nominees.
1.5 "Notice of Exclusive Control" shall mean a written notice given by
Administrative Agent to Custodian that Administrative Agent is exercising sole
and exclusive control of the Collateral.
1.6 "UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York.
1.7 "Written Instructions" shall mean written communications received by
Custodian via letter, facsimile transmission or other method or system specified
by Custodian as available for use in connection with this Agreement.
1.8 The terms "entitlement holder", "entitlement order", "financial asset",
"investment property", "proceeds", "security", "security entitlement" and
"securities intermediary" shall have the meanings set forth in Articles 8 and 9
of the UCC.
----------
(10) Note that the Account Name must include the name of Administrative Agent
pursuant to Section 3.8.
Exhibit E-13
ARTICLE II
APPOINTMENT AND STATUS OF CUSTODIAN; ACCOUNT
2.1 Appointment; Identification of Collateral. Administrative Agent and
Pledgor each hereby appoints Custodian to perform its duties as hereinafter set
forth and authorizes Custodian to hold the Collateral in the Account in
registered form in its name or the name of its nominees. Custodian hereby
accepts such appointment and agrees to establish and maintain the Account and
appropriate records identifying the Collateral in the Account as pledged by
Pledgor to Administrative Agent for the ratable benefit of the Secured Parties.
Pledgor hereby authorizes Custodian, and Custodian agrees, to comply with all
Written Instructions, including entitlement orders, originated by Administrative
Agent with respect to the Collateral without further consent or direction from
Pledgor or any other party.
2.2 Status as Securities Intermediary. The parties agree that Custodian is
a "securities intermediary", and intend that all securities and securities
entitlements held in the Account shall be treated as financial assets.
ARTICLE III
COLLATERAL SERVICES
3.1 Use of Depositories. Administrative Agent and Pledgor hereby authorize
Custodian to utilize Depositories to the extent possible in connection with its
performance hereunder. Collateral held by Custodian in a Depository will be held
subject to the rules, terms and conditions of such Depository. Where Collateral
is held in a Depository, Custodian shall identify on its records as belonging to
Pledgor and pledged to Administrative Agent for the ratable benefit of the
Secured Parties a quantity of securities as part of a fungible bulk of
securities held in Custodian's account at such Depository. Securities deposited
in a Depository will be represented in accounts which include only assets held
by Custodian for its customers.
3.2 Notice of Exclusive Control. Until Custodian receives a Notice of
Exclusive Control from Administrative Agent, Custodian is authorized to act upon
any Written Instructions, including entitlement orders, from either
Administrative Agent or Pledgor. Administrative Agent may, subject to terms of
the Collateral Agreement, exercise sole and exclusive control of the Account and
the Collateral held therein at any time by delivering to Custodian a Notice of
Exclusive Control. Upon receipt of a Notice of Exclusive Control, Custodian
shall, without inquiry and in reliance upon such Notice, and shall cause its
agents and subcustodians to, thereafter comply with Written Instructions
(including entitlement orders) solely from Administrative Agent with respect to
the Account and the Collateral held therein.
3.3 Collateral Removal; Substitutions. Until Custodian receives a Notice of
Exclusive Control from Administrative Agent, Custodian is authorized to act upon
any Written Instructions from Pledgor to transfer, redeem or invest Collateral
from the Account or substitute other Collateral for any Collateral then held in
the Account ("Substitute Collateral"). It shall be Pledgor's sole responsibility
to ensure that at all times the market value of Collateral in the Account
(including Substitute Collateral) shall not be less than the amount Pledgor is
required to maintain pursuant to the Credit Agreement.
Exhibit E-14
3.4 Payment of Proceeds. Until Custodian receives a Notice of Exclusive
Control, Custodian shall transfer to Pledgor (whether by credit to Pledgor's
custody account at Custodian or otherwise) all proceeds received by Custodian
with respect to the Collateral. After Custodian's receipt of a Notice of
Exclusive Control, Custodian shall credit to the Account all proceeds received
by Custodian with respect to the Collateral.
3.5 Advances by Custodian. Until Custodian receives a Notice of Exclusive
Control, Custodian is authorized to act upon Pledgor's Written Instructions to
Custodian to settle transactions involving the Account. Pledgor shall ensure
that the market value of the Collateral in the Account after settlement of any
such transactions shall not be less than the amount Pledgor is required to
maintain pursuant to the Credit Agreement. If any advance of funds is made by
Custodian under the customary securities settlement practices to purchase, or to
make payment on or against delivery of any investment property to be held in the
Account, Custodian shall have a continuing security interest in and right of
setoff against such investment property and the proceeds thereof, until such
time the investment property is delivered, settled, or reversed or Custodian is
repaid the amount of such advance.
3.6 Statements. Within ten Business Days after the end of each calendar
month and within one Business Day of such other times as Pledgor or
Administrative Agent may reasonably request, Custodian shall supply to each of
Pledgor and Administrative Agent a separate written report listing the
securities and any other financial assets held in the Account. Such report shall
include the principal amount and/or number of shares of each security or
financial asset, as appropriate, and the market value thereof. Custodian shall
furnish Pledgor and Administrative Agent with advices of transactions affecting
the Account and monthly Account statements. Each of Pledgor and Administrative
Agent may elect to receive advices and statements electronically through the
Internet to an email address specified by it for such purpose. Each of Pledgor
and Administrative Agent acknowledges that there are risks inherent in
communicating through the Internet, such as the possibility of virus
contamination and disruptions in service, and agrees that Custodian shall not be
responsible for any loss, damage or expense suffered or incurred by Pledgor,
Administrative Agent, or any person claiming by or through Pledgor or
Administrative Agent as a result of the use of such methods.
3.7 Notice of Adverse Claims. Upon receipt of written notice of any lien,
encumbrance or adverse claim against the Account or any portion of the
Collateral carried therein, Custodian shall use reasonable efforts to notify
Administrative Agent and Pledgor as promptly as practicable under the
circumstances.
3.8 The Account. Custodian hereby confirms and agrees that (i) the Account
has been established in the name of Pledgor as recited above which has been
titled to reflect the security interest of Administrative Agent for the ratable
benefit of the Secured Parties therein and (ii) Pledgor is the sole owner of the
Account. Except for the claims and interest of Administrative Agent and Pledgor
in the Account, Custodian does not know of any other claim to or interest in the
Account. Each party hereto agrees that (i) the Account constitutes a "securities
account" within the meaning of Article 8 of the UCC, (ii) any demand deposit
account established and maintained in connection with the Account constitutes a
"deposit account" within the meaning of Article 9 of the UCC and (iii) all
property, including cash, now or hereafter held, credited or carried by, in or
to the credit of the Account shall be treated as
Exhibit E-15
financial assets. For purposes of perfecting the security interest of
Administrative Agent in any property (other than Security Entitlements of
Pledgor) at any time now or hereafter held in or credited to the Account,
Custodian hereby acknowledges that it holds and will hold such property as
collateral for the benefit of Administrative Agent, subject to the terms and
conditions of this Agreement. The parties acknowledge that no "security
entitlement" under the UCC shall exist with respect to any financial asset held
in the Account which is registered in the name of Pledgor, payable to the order
of Pledgor or specially indorsed to Pledgor, except to the extent the foregoing
have been indorsed to Custodian or in blank. All property delivered to Custodian
and directed by Pledgor in writing to be included in the Account pursuant to the
terms of the Custodial Agreement shall be promptly credited to the Account.
3.9 The Securities. Custodian shall accept and retain the securities in the
form in which received, except for those securities received in physical form
which may be held in the name of Custodian's nominee or agent or which may be
converted to the Depository Trust Company or other book-entry system, subject in
each case to withdrawal or other disposition pursuant to this Agreement. All
securities delivered to Custodian shall be in good deliverable form as
determined by Custodian with reference to applicable law and industry practices.
Pledgor certifies in case any financial asset credited to the Account shall be
registered in the name of Pledgor, payable to the order of Pledgor or specially
indorsed to Pledgor, Pledgor will indorse the same to Custodian or in blank.
Custodian agrees that it shall promptly notify Administrative Agent and Pledgor
in writing after becoming aware (using reasonable care) that any financial asset
credited to the Account is registered or indorsed in contravention of this
Section 3.9; provided, however, that Custodian shall have no liability hereunder
for the failure to deliver such notice except to the extent such failure results
from its gross negligence or willful misconduct.
3.10 Priority of Lien. Custodian hereby acknowledges the security interest
granted in the Collateral to Administrative Agent for the ratable benefit of the
Secured Parties by Pledgor. Custodian hereby confirms that it will not advance
any margin or other credit to Pledgor or hypothecate any securities carried in
the Account. Custodian hereby subordinates all liens, encumbrances, claims and
rights of setoff it may have, now or in the future, against the Account or any
property carried in the Account or any free credit balance in the Account other
than as set forth in Section 3.4. Custodian will not agree with any third party
that Custodian will comply with entitlement orders concerning the Account
originated by such third party without the prior written consent of
Administrative Agent and Pledgor. Custodian represents that no such agreement
with any third party is now in effect.
ARTICLE IV
GENERAL TERMS AND CONDITIONS
4.1 Standard of Care; Indemnification.
(a) Custodian shall be responsible for the performance of only such
duties as are set forth herein or contained in instructions given to
Custodian which are not contrary to the provisions of this Agreement.
Custodian will use reasonable care with respect to the safekeeping of
property in the Account and, except as otherwise expressly provided
Exhibit E-16
herein, in carrying out its obligations under this Agreement. Custodian's
responsibility hereunder is limited to any loss occasioned by the bad
faith, gross negligence or willful misconduct of any director, officer,
agent or employee of Custodian or by robbery, burglary or theft (while the
securities and financial assets are in Custodian's physical possession), to
the extent of the market value of such Securities and Financial Assets at
the date of the discovery of such loss if such securities or financial
assets cannot be replaced by Custodian.
(b) Except for permitting a withdrawal or payment to, or advancing
margin or other credit to, Pledgor in violation of the terms hereof,
Custodian shall not be liable for any costs, expenses, damages, liabilities
or claims, including attorneys' fees ("Losses") incurred by or asserted
against Pledgor or any Secured Party, except those Losses arising out of
the bad faith, negligence or willful misconduct of Custodian. Custodian
shall have no liability whatsoever for the action or inaction of any
Depository. In no event shall Custodian be liable for special, indirect or
consequential damages, or lost profits or loss of business, arising in
connection with this Agreement.
(c) Administrative Agent and Pledgor agree, jointly and severally, to
indemnify Custodian and hold Custodian harmless from and against any and
all Losses sustained or incurred by or asserted against Custodian by reason
of or as a result of any action or inaction, or arising out of Custodian's
performance hereunder, including reasonable fees and expenses of counsel
incurred by Custodian in a successful defense of claims by Pledgor or
Administrative Agent; provided, that Pledgor and Administrative Agent shall
not indemnify and hold Custodian harmless for those Losses arising out of
Custodian's bad faith, negligence or willful misconduct. This indemnity
shall be a continuing obligation of Pledgor and Administrative Agent, their
respective successors and assigns, notwithstanding the termination of this
Agreement.
4.2 No Obligation Regarding Quality of Collateral. Without limiting the
generality of the foregoing, Custodian shall be under no obligation, other than
the duty to exercise due care in accordance with reasonable commercial
standards, to inquire into, and shall not be liable for, any Losses incurred by
Pledgor, Administrative Agent or any other person as a result of the receipt or
acceptance of fraudulent, forged or invalid Collateral, or Collateral which
otherwise is not freely transferable or deliverable without encumbrance in any
relevant market.
4.3 No Responsibility Concerning Collateral Agreement. Pledgor and
Administrative Agent hereby agree that, notwithstanding references to the
Collateral Agreement in this Agreement, Custodian has no interest in, and no
duty, responsibility or obligation with respect to, the Collateral Agreement
(including without limitation, no duty, responsibility or obligation to monitor
Pledgor's or Administrative Agent's compliance with the Collateral Agreement or
to know the terms of the Collateral Agreement).
4.4 No Duty of Oversight. Custodian is not at any time under any duty to
monitor the value of any Collateral in the Account or whether the Collateral is
of a type required to be held in the Account, or to supervise the investment of,
or to advise or make any recommendation for the purchase, sale, retention or
disposition of any Collateral.
Exhibit E-17
4.5 No Collection Obligations. Custodian shall be under no obligation to
take action to collect any amount payable on Collateral in default, except with
respect to payments actually made or if payment is refused after due demand and
presentment.
4.6 Fees and Expenses. Pledgor agrees to pay to Custodian the fees as may
be agreed upon from time to time. Pledgor shall reimburse Custodian for all
reasonable out of pocket costs associated with transfers of Collateral to
Custodian and records kept in connection with this Agreement. Pledgor shall also
reimburse Custodian for reasonable out-of-pocket expenses which are a normal
incident of the services provided hereunder.
4.7 Effectiveness of Instructions; Reliance; Risk Acknowledgements;
Additional Terms.
(a) Subject to the terms below, Custodian shall be entitled to rely
upon any Written Instructions actually received by Custodian from an
Authorized Person and reasonably believed by Custodian to be duly
authorized and delivered; provided however, in no event shall Custodian be
entitled to rely upon any Written Instructions received from Pledgor after
the receipt by Custodian of a Notice of Exclusive Control from
Administrative Agent.
(b) If Custodian receives Written Instructions which appear on their
face to be genuine and to have been transmitted via (i) computer facsimile,
email, the Internet or other insecure electronic method, or (ii) secure
electronic transmission containing applicable authorization codes,
passwords and/or authentication keys, Administrative Agent and Pledgor each
understands and agrees that Custodian cannot determine the identity of the
actual sender of such Written Instructions and that Custodian shall
conclusively presume that such Written Instructions have been sent by an
Authorized Person. Administrative Agent and Pledgor shall be responsible
for ensuring that only its Authorized Persons transmit such Written
Instructions to Custodian and that all of its Authorized Persons treat
applicable user and authorization codes, passwords and/or authentication
keys with extreme care.
(c) Administrative Agent and Pledgor each acknowledges and agrees that
it is fully informed of the protections and risks associated with the
various methods of transmitting Written Instructions to Custodian and that
there may be more secure methods of transmitting Written Instructions than
the method(s) selected by it. Administrative Agent and Pledgor each agrees
that the security procedures (if any) to be followed in connection with its
transmission of Written Instructions provide to it a commercially
reasonable degree of protection in light of its particular needs and
circumstances.
(d) If Administrative Agent or Pledgor elects (with Custodian's prior
consent) to transmit Written Instructions through an on-line communications
service owned or operated by a third party, it agrees that Custodian shall
not be responsible or liable for the reliability or availability of any
such service.
Exhibit E-18
4.8 Inspection. Upon reasonable request and provided Custodian shall suffer
no significant disruption of its normal activities, Administrative Agent or
Pledgor shall have access to Custodian's books and records relating to the
Account during Custodian's normal business hours. Upon reasonable request,
copies of any such books and records shall be provided to Administrative Agent
or Pledgor at the requesting party's expense. Notwithstanding the foregoing,
when Custodian receives a Notice of Exclusive Control from Administrative Agent,
Pledgor shall have no right to Custodian's books and records in connection with
the Account.
4.9 Account Disclosure. Custodian is authorized to supply any information
regarding the Account which is required by any law or governmental regulation
now or hereafter in effect. Custodian shall give Administrative Agent and
Pledgor (prior to the delivery of a Notice of Exclusive Control) prompt notice
of any such disclosure including in its notice the legal basis for the required
disclosure. Custodian shall reasonably cooperate in obtaining a protective order
or other appropriate protection relating to the disclosure. Custodian shall
disclose only that portion of Account information that it is legally required to
disclose.
4.10 Force Majeure. Custodian shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions of utilities, computer (hardware or
software) or communications service; accidents; labor disputes; acts of civil or
military authority; or governmental actions.
4.11 Pricing Services. Custodian may, as an accommodation, provide pricing
or other information services to Pledgor and/or Administrative Agent in
connection with this Agreement. Custodian may utilize any vendor (including
securities brokers and dealers) believed by it to be reliable to provide such
information. Under no circumstances shall Custodian be liable for any loss,
damage or expense suffered or incurred by Pledgor or Administrative Agent as a
result of errors or omissions with respect to any pricing or other information
utilized by Custodian hereunder.
4.12 No Implied Duties. Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied against
Custodian in connection with this Agreement.
4.13 Pledgor Agreement. In the event of a conflict between this Agreement
and any other agreement between Custodian and Pledgor, the terms of this
Agreement will control.
ARTICLE V
MISCELLANEOUS
5.1 Termination. This Agreement shall terminate upon (a) Custodian's
receipt of Written Instructions from Administrative Agent expressly stating that
Administrative Agent no longer claims any security interest in the Collateral,
(b) transfer of the Collateral to Administrative Agent subsequent to Custodian's
receipt of a Notice of Exclusive Control, or (c) by any party upon not less than
ninety days' prior written notice of termination to the other
Exhibit E-19
parties, provided that termination pursuant to (c) above shall not affect or
terminate Administrative Agent's security interest in the Collateral. Upon
termination pursuant to (c) above, Custodian shall follow such reasonable
Written Instructions of Administrative Agent and Pledgor concerning the transfer
of Collateral. Except as otherwise provided herein, all obligations of the
parties to each other hereunder shall cease upon termination of this Agreement.
5.2 Certificates of Authorized Persons. Administrative Agent and Pledgor
agree to furnish to Custodian a new Certificate of Authorized Persons in the
event of any change in the then present Authorized Persons. Until such new
Certificate is received, Custodian shall be fully protected in acting upon
Written Instructions of such present Authorized Persons.
5.3 Notices. Except as otherwise specifically provided for by this
Agreement, all notices and other communications between parties shall be in
writing and shall be either hand delivered or mailed by first class mail,
postage prepaid, or sent by electronic facsimile or courier as follows:
to Administrative Wachovia Bank, National Association
Agent: One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx
Telecopy No. (000) 000-0000
to Pledgor: [Information to follow]
to Securities Xxxxxxx Bank
Intermediary: [Address]
Telecopy No:
5.4 Cumulative Rights; No Waiver. Each and every right granted to Custodian
hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of Custodian to exercise,
and no delay in exercising, any right will operate as a waiver thereof, nor will
any single or partial exercise by Custodian of any right preclude any other
future exercise thereof or the exercise of any other right.
5.5 Severability; Amendments; Assignment. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected thereby. This Agreement may not be
amended or modified in any manner except by a written agreement executed by the
parties hereto. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by any party without the written
consent of the other parties.
5.6 Governing Law; Jurisdiction; Waiver of Immunity; Jury Trial Waiver.
This Agreement and the Account shall be governed by and construed in accordance
with the
Exhibit E-20
substantive laws of the State of New York, without regard to conflicts of laws
principles thereof. The State of New York shall be deemed to be the location of
Custodian. Administrative Agent, Pledgor and Custodian hereby consent to the
non-exclusive jurisdiction of a state or federal court situated in New York
City, New York in connection with any dispute arising hereunder. To the extent
that in any jurisdiction Custodian, Administrative Agent or Pledgor may now or
hereafter be entitled to claim, for itself or its assets, immunity from suit,
execution, attachment (before or after judgment) or other legal process,
Administrative Agent and Pledgor each irrevocably agrees not to claim, and
hereby waives, such immunity. Administrative Agent, Pledgor and Custodian each
hereby irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
5.7 No Third Party Beneficiaries. In performing hereunder, Custodian is
acting solely on behalf of Administrative Agent and Pledgor and no contractual
or service relationship shall be deemed to be established hereby between
Custodian and any other person.
5.8 Headings. Section headings are included in this Agreement for
convenience only and shall have no substantive effect on its interpretation.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
[Remainder of this page intentionally left blank.]
Exhibit E-21
IN WITNESS WHEREOF, Administrative Agent, Pledgor and Custodian have caused
this Agreement to be executed by their respective officers, thereunto duly
authorized, as of the day and year first above written.
[NAME OF PLEDGOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WACHOVIA BANK, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX BANK
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit E-22
EXHIBIT D
FORM OF PLEDGE SUPPLEMENT
THIS PLEDGE SUPPLEMENT, dated as of _______________, _____, is delivered by
[NAME OF APPLICABLE PLEDGOR] (the "Pledgor") pursuant to Section 13 of the
Pledge and Security Agreement referred to below. The Pledgor hereby agrees that
this Pledge Supplement may be attached to the Pledge and Security Agreement,
dated as of September 23, 2005, made by the Pledgors named therein in favor of
Wachovia Bank, National Association, as Administrative Agent (as amended,
modified or supplemented from time to time, the "Pledge and Security Agreement,"
capitalized terms defined therein being used herein as therein defined).
The Pledgor hereby pledges, assigns and delivers to the Administrative
Agent, for the ratable benefit of the Lenders, and grants to the Administrative
Agent, for the ratable benefit of the Lenders, a Lien upon and security interest
in, all of the Pledgor's right, title and interest in and to the account listed
on Annex A to this Pledge Supplement (the "New Account"), together with all
securities, money, instruments and other assets now or at any time hereafter
held or contained in or credited to the New Account (all as more completely
described in item [(C)] of Exhibit A to the Pledge and Security Agreement) and
all Proceeds of the foregoing (the New Account, together with all such
securities, money, instruments and other assets and the Proceeds thereof,
collectively, the "New Collateral"). The Pledgor agrees that the New Account
shall be deemed to be "L/C Collateral" within the meaning of the Pledge and
Security Agreement, and that the New Account, together with all other New
Collateral, shall become part of the L/C Collateral and shall secure all of the
Indebtedness as provided in the Pledge and Security Agreement. This Pledge
Supplement and its attachments are hereby incorporated into the Pledge and
Security Agreement and made a part thereof.
[NAME OF PLEDGOR]
By:
------------------------------------
Title:
---------------------------------
Exhibit E-23
EXHIBIT F
FORM OF L/C CONVERSION NOTICE
[Date]
Wachovia Bank, National Association
Charlotte Plaza Building
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx XX0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Syndication Agency Services
Wachovia Bank, National Association
One Wachovia Center, 6th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of September 23, 2005,
by and among Odyssey Re Holdings Corp., a Delaware corporation (the "Borrower"),
the Lenders from time to time parties thereto, and Wachovia Bank, National
Association, as Administrative Agent for the Lenders and as L/C Issuer (as
amended, modified or supplemented from time to time, the "Credit Agreement," the
terms defined therein being used herein as therein defined) and, pursuant to
Section 2.3(b)(v) of the Credit Agreement, hereby gives you, as Administrative
Agent and as L/C Issuer, irrevocable notice that the Borrower requests a
conversion under the Credit Agreement of the Letter of Credit identified on
Annex A hereto. To that end, the undersigned sets forth below the information
relating to such conversion (the "Proposed Conversion") as required by Section
2.3(b)(v) of the Credit Agreement:
(i) The undersigned Responsible Officer hereby certifies as of the
date hereof that he/she is the _______________________________________ of
the Borrower, and that, as such, he/she is authorized to execute and
deliver this L/C Conversion Notice to the Administrative Agent on the
behalf of the Borrower.
(ii) The Proposed Conversion is requested to be made on
_______________.(11)
(iii) The Letter of Credit to be converted is presently maintained as
[a Secured Letter of Credit] [an Unsecured Letter of Credit] and is
proposed hereby to be converted into [a Secured Letter of Credit] [an
Unsecured Letter of Credit].(12)
----------
(11) This L/C Conversion Notice must be delivered not later than 11:00 a.m. at
least two Business Days prior to the effective date the Proposed
Conversion.
(12) Complete with the applicable bracketed language.
Exhibit F-1
The Borrower hereby certifies and covenants that:
(a) the Borrower shall deliver on the Business Day immediately preceding
the effective date of the Proposed Conversion an L/C Collateral Balance Report
confirming that the L/C Collateral Balance of the Borrower after giving effect
to the Proposed Conversion is not less than the aggregate L/C Obligations of the
Borrower; and
(b) all the applicable conditions specified in SECTION 4.2 of the Credit
Agreement are satisfied on and as of the date hereof and shall be satisfied on
and as of the effective date of the Proposed Conversion.
Very truly yours,
ODYSSEY RE HOLDINGS CORP.
By:
------------------------------------
Title:
---------------------------------
Exhibit F-2
Annex A to L/C Conversion Notice
Letter(s) of Credit to be Converted
Exhibit F-3
EXHIBIT G
FORM OF
L/C COLLATERAL BALANCE REPORT
____________, 200_
Wachovia Bank, National Association,
as Administrative Agent
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx XX0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxxx
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of September 23, 2005,
among Odyssey Re Holdings Corp., a Delaware corporation (the "Borrower")
[Odyssey America Reinsurance Corporation, a Connecticut CORPORATION][Clearwater
Insurance Company, a Delaware corporation][Clearwater Select Insurance Company,
a Delaware corporation][Xxxxxx Insurance Company, a Delaware corporation][Xxxxxx
Specialty Insurance Company, a New York corporation][Xxxxxx Corporate Name
Limited, a company incorporated in England and Wales] (the "Subsidiary
Obligor"), and the other Subsidiary Obligors named therein, the Lenders defined
therein and Wachovia Bank, National Association ("Wachovia"), as administrative
agent for the Lenders and as L/C Issuer (as amended or otherwise modified from
time to time, the "Credit Agreement"). Terms defined in the Credit Agreement
are, unless otherwise defined herein or the context otherwise requires, used
herein as defined therein.
This Certificate, together with supporting calculations attached hereto on
ATTACHMENT A set forth in reasonable detail, is delivered to you pursuant to the
terms of the Credit Agreement. We hereby certify and warrant to the
Administrative Agent, the L/C Issuer and the Lenders that as of the close of
business on _____________, 200__ (the "Valuation Date"), the L/C Collateral
Balance for the [Borrower][Subsidiary Obligor] is $___________ and the aggregate
L/C Collateral Balance for all Credit Parties is $___________.
The undersigned hereby certifies that the information on ATTACHMENT A
correctly sets forth the L/C Collateral Balance (in the aggregate and for each
category of Collateral) of the Credit Parties and the aggregate L/C Obligations
(in the aggregate and with respect to Secured Letters of Credit issued for the
account of the Credit Party) as of the Valuation Date, that the aggregate L/C
Obligations with respect to Secured Letters of Credit does not exceed the
aggregate L/C Collateral Balance as of the Valuation Date, that the L/C
Obligations with respect to Secured Letters of Credit t issued for the account
of the [Borrower][Subsidiary Obligor] does not exceed the L/C Collateral Balance
of the [Borrower][Subsidiary Obligor] and that nothing has come to the attention
of the undersigned to cause the undersigned to believe that the Administrative
Agent, for the ratable benefit of the Lenders, does not have a first priority
Exhibit G-1
perfected Lien (subject to permitted liens in favor of Custodians) on and
security interest in the Collateral set forth on ATTACHMENT A as of the
Valuation Date.
IN WITNESS WHEREOF, the [Borrower][Subsidiary Obligor] has caused this
Certificate to be executed and delivered by an authorized officer this ____ day
of ___________, ____.
[Name of Credit Party]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit G-2
ATTACHMENT A
COLLATERAL VALUE FOR ALL CREDIT PARTIES
COLLATERAL
AMOUNT/ COVERAGE
TYPE OF COLLATERAL MARKET VALUE PERCENTAGE COLLATERAL VALUE
------------------ ------------ ------------- ----------------
Cash (denominated in U.S. Dollars) 100%
Prime bank certificates of deposit issued by U.S.
banks rated Aa3/AA- or better 95%
U.S. Government Securities
Maturity 2 years or less 95% of Market
Maturity over 2 years 90% of Market
Investment-grade municipal bonds (Rating Aaa/AAA)
Maturity 5 years or less 90% of Market
Investment-grade municipal bonds (Rating Aa1/AA+
- Baa2/BBB)
Maturity 5 years or less 85% of Market
Investment-grade municipal bonds (Rating Aaa/AAA
- Baa3/BBB-)
Maturity over 5 years 80% of Market
Investment-grade corporate bonds (Rating Aa3/AA-
or better, non-convertible, NYSE-traded)
Maturity 2 years or less 90% of Market
Maturity over 2 years 85% of Market
Investment-grade corporate bonds (Rating A1/A+ to
Baa3/BBB-, non-convertible, NYSE-traded)
Maturity 2 years or less 85% of Market
Maturity over 2 years 80% of Market
Commercial paper (Rating A1-A2, P1-P2) 90% of Market
Cash (denominated in U.S. Dollars) 100%
Prime bank certificates of deposit issued by U.S.
banks rated Aa3/AA- or better 95%
Total aggregate Collateral Value $____________
Exhibit G-3
COLLATERAL VALUE FOR [BORROWER][SUBSIDIARY OBLIGOR]
COLLATERAL
AMOUNT/ COVERAGE
TYPE OF COLLATERAL MARKET VALUE PERCENTAGE COLLATERAL VALUE
------------------ ------------ ------------- ----------------
Cash (denominated in U.S. Dollars) 100%
Prime bank certificates of deposit issued by U.S.
banks rated Aa3/AA- or better 95%
U.S. Government Securities
Maturity 2 years or less 95% of Market
Maturity over 2 years 90% of Market
Investment-grade municipal bonds (Rating Aaa/AAA)
Maturity 5 years or less 90% of Market
Investment-grade municipal bonds (Rating Aa1/AA+
- Baa2/BBB)
Maturity 5 years or less 85% of Market
Investment-grade municipal bonds (Rating Aaa/AAA
- Baa3/BBB-)
Maturity over 5 years 80% of Market
Investment-grade corporate bonds (Rating Aa3/AA-
or better, non-convertible, NYSE-traded)
Maturity 2 years or less 90% of Market
Maturity over 2 years 85% of Market
Investment-grade corporate bonds (Rating A1/A+ to
Baa3/BBB-, non-convertible, NYSE-traded)
Maturity 2 years or less 85% of Market
Maturity over 2 years 80% of Market
Commercial paper (Rating A1-A2, P1-P2) 90% of Market
Cash (denominated in U.S. Dollars) 100%
Prime bank certificates of deposit issued by U.S.
banks rated Aa3/AA- or better 95%
Total aggregate Collateral Value $_____________
Exhibit G-4
AGGREGATE L/C OBLIGATIONS
WITH RESPECT TO SECURED LETTERS OF CREDIT
UNREIMBURSED
BENEFICIARY DATE UNDRAWN AMOUNT DRAWINGS
----------- ---- -------------- ------------
$ $
Total L/C Obligations with
respect to Secured Letters
of Credit $ $
RATIO OF AGGREGATE COLLATERAL VALUE TO AGGREGATE L/C OBLIGATIONS WITH RESPECT TO
SECURED LETTERS OF CREDIT: ____________
AGGREGATE L/C OBLIGATIONS
WITH RESPECT TO SECURED LETTERS OF CREDIT
ISSUED FOR THE ACCOUNT OF THE [BORROWER][SUBSIDIARY OBLIGOR]
UNREIMBURSED
BENEFICIARY DATE UNDRAWN AMOUNT DRAWINGS
----------- ---- -------------- ------------
$ $
Total L/C Obligations with
respect to Secured Letters
of Credit $ $
RATIO OF AGGREGATE COLLATERAL VALUE TO AGGREGATE L/C OBLIGATIONS WITH RESPECT TO
SECURED LETTERS OF CREDIT ISSUED FOR THE ACCOUNT OF THE [BORROWER][SUBSIDIARY
OBLIGOR]: ____________
Exhibit G-5
EXHIBIT H
FORM OF
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, dated as of the _____ day of _____________, 20__
(this "Agreement"), is executed and delivered by ________________________, a
______________ corporation (the "Company"), Odyssey Re Holdings Corp., a
Delaware corporation ("Odyssey"), and Wachovia Bank, National Association, in
its capacity as administrative agent under the Credit Agreement referred to
hereinbelow (in such capacity, the "Administrative Agent"), pursuant to Section
2.14 of the Credit Agreement. Capitalized terms used herein without definition
shall have the meanings given to them in the Credit Agreement.
Reference is made to the Credit Agreement, dated as of September 23, 2005,
among Odyssey, certain Subsidiaries of Odyssey designated therein (collectively,
the "Subsidiary Obligors"), the Lenders defined therein and the Administrative
Agent (as amended or otherwise modified from time to time, the "Credit
Agreement"). Pursuant to Section 2.14 of the Credit Agreement, Odyssey may from
time to time after the Closing Date designate one or more Persons as a
Subsidiary Obligor, subject to, among other things, the execution and delivery
by such designated Subsidiary Obligor of an Assumption Agreement. The Company is
a Subsidiary of Odyssey and will obtain benefits as a result of the extension of
credit under the Credit Agreement, which benefits are hereby acknowledged, and,
accordingly, desires to execute and deliver this Agreement. Therefore, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company hereby
agree as follows:
1. The Company hereby joins in and agrees to be bound by each and all of
the provisions of the Credit Agreement as a Subsidiary Obligor thereunder. In
furtherance (and without limitation) of the foregoing, the Company hereby agrees
to pay and perform all of the Obligations of the Company as a Subsidiary Obligor
under the Credit Agreement and the other Credit Documents to which it is or
hereafter becomes a party, all on the terms and subject to the conditions set
forth in the Credit Agreement. The Company further agrees to execute and deliver
all other documents and instruments and take all other actions required under or
pursuant to the provisions of Section 2.14 of the Credit Agreement in connection
with its joinder as a Subsidiary Obligor under the Credit Agreement.
2. Each of Odyssey and the Company hereby represents and warrants that each
representation and warranty contained in ARTICLE V of the Credit Agreement and
in the other Credit Documents is true and correct in all material respects on
and as of the date hereof (except to the extent any such representation or
warranty is expressly stated to have been made as of a specific date, in which
case such representation or warranty shall be true and correct in all material
respects as of such date), as if such representations and warranties were set
forth at length herein.
3. This Agreement shall be a Credit Document (within the meaning of such
term under the Credit Agreement), shall be binding upon and enforceable against
the Company and its successors and assigns, and shall inure to the benefit of
and be enforceable by the Administrative
Exhibit H-1
Agent, the L/C Issuer and each Lender and their respective successors and
assigns. This Agreement and any attachments hereto are hereby incorporated into
the Credit Agreement and made a part thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first above
written.
[NAME OF COMPANY]
By:
------------------------------------
Title:
---------------------------------
ODYSSEY RE HOLDINGS CORP.
By:
------------------------------------
Title:
---------------------------------
Accepted and agreed to:
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By:
---------------------------------
Title:
------------------------------
Exhibit H-2
REVOLVING NOTE
September 23, 2005
$25,000,000 New York, New York
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to KEY BANK, NATIONAL ASSOCIATION or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of TWENTY-FIVE MILLION DOLLARS ($25,000,000) or such lesser
amount as may constitute the unpaid principal amount of each Revolving Loan from
time to time made by the Lender to the Borrower under that certain Credit
Agreement, dated as of September 23, 2005 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Wachovia
Bank, National Association, as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Loan from the date of such Revolving Loan until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. Upon the occurrence and continuation of one or
more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Revolving Loans
made by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also
attach schedules to this Note and endorse thereon the date, amount and maturity
of its Revolving Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
REVOLVING NOTE
September 23, 2005
$20,000,000 New York, New York
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to PNC BANK, NATIONAL ASSOCIATION or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of TWENTY MILLION DOLLARS ($20,000,000) or such lesser amount
as may constitute the unpaid principal amount of each Revolving Loan from time
to time made by the Lender to the Borrower under that certain Credit Agreement,
dated as of September 23, 2005 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the "Agreement;" the terms
defined therein being used herein as therein defined), among the Borrower, the
Lenders from time to time party thereto, and Wachovia Bank, National
Association, as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Loan from the date of such Revolving Loan until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. Upon the occurrence and continuation of one or
more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Revolving Loans
made by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also
attach schedules to this Note and endorse thereon the date, amount and maturity
of its Revolving Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS O F THE
STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
