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[QUANTA LOGO]
CREDIT AGREEMENT
dated as of
July 13, 2004
and
Amended and Restated as of July 11, 2005
among
QUANTA CAPITAL HOLDINGS LTD.,
VARIOUS DESIGNATED SUBSIDIARY BORROWERS,
The Lenders Party Hereto,
BNP PARIBAS,
CALYON, NEW YORK BRANCH,
COMERICA BANK
and
DEUTSCHE BANK AG NEW YORK BRANCH,
as Co-Documentation Agents
and
JPMORGAN CHASE BANK, N.A. (f/k/a JPMorgan Chase Bank),
as Administrative Agent
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X.X. XXXXXX SECURITIES INC.,
as Advisor, Sole Lead Arranger and Sole Bookrunner
[JPMORGAN LOGO]
Table of Contents
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Page
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ARTICLE I Definitions..........................................................1
Section 1.01. Defined Terms.................................................1
Section 1.02. Classification of Loans and Borrowings.......................22
Section 1.03. Terms Generally..............................................22
Section 1.04. Accounting Terms; GAAP.......................................23
ARTICLE II The Credits........................................................23
Section 2.01. Commitments..................................................23
Section 2.02. Loans and Borrowings.........................................24
Section 2.03. Requests for Borrowings......................................24
Section 2.04. Funding of Borrowings........................................25
Section 2.05. Interest Elections...........................................25
Section 2.06. Termination and Reduction of Commitments.....................26
Section 2.07. Repayment of Loans; Evidence of Debt.........................27
Section 2.08. Prepayment of Loans; Additional Borrowing Base
Requirements.................................................28
Section 2.09. Fees.........................................................29
Section 2.10. Interest.....................................................29
Section 2.11. Alternate Rate of Interest...................................30
Section 2.12. Increased Costs..............................................30
Section 2.13. Break Funding Payments.......................................31
Section 2.14. Taxes........................................................32
Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..33
Section 2.16. Mitigation Obligations; Replacement of Lenders...............34
Section 2.17. Designated Subsidiary Borrowers..............................36
Section 2.18. Additional Commitments.......................................37
ARTICLE III Letters of Credit.................................................38
Section 3.01. Several Letters of Credit....................................38
Section 3.02. Fronted Letters of Credit....................................39
Section 3.03. Conditions to the Issuance of all Letters of Credit..........41
Section 3.04. Letter of Credit Requests....................................43
Section 3.05. Agreement to Repay Letter of Credit Drawings.................43
Section 3.06. Increased Costs..............................................44
Section 3.07. Letter of Credit Expiration Extensions.......................45
Section 3.08. Changes to Stated Amount.....................................45
Section 3.09. Existing Fronted Letters of Credit...........................45
Section 3.10. Existing Several Letters of Credit...........................45
ARTICLE IV Representations and Warranties.....................................48
Section 4.01. Corporate Status.............................................48
Section 4.02. Corporate Power and Authority................................48
Section 4.03. No Contravention of Laws, Agreements or Organizational
Documents....................................................48
Section 4.04. Litigation and Contingent Liabilities........................48
Section 4.05. Use of Proceeds; Margin Regulations..........................49
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Section 4.06. Approvals....................................................49
Section 4.07. Investment Company Act.......................................49
Section 4.08. Public Utility Holding Company Act...........................49
Section 4.09. True and Complete Disclosure; Projections and Assumptions....49
Section 4.10. Financial Condition; Financial Statements....................50
Section 4.11. Tax Returns and Payments.....................................50
Section 4.12. Compliance with ERISA........................................51
Section 4.13. Subsidiaries.................................................51
Section 4.14. Capitalization...............................................52
Section 4.15. Indebtedness.................................................52
Section 4.16. Compliance with Statutes, etc................................52
Section 4.17. Insurance Licenses...........................................52
Section 4.18. Insurance Business...........................................52
Section 4.19. Security Documents...........................................53
Section 4.20. Properties; Liens............................................53
Section 4.21. Solvency.....................................................53
Section 4.22. Certain Insurance Regulations, Orders, Consents, Etc.........53
ARTICLE V Conditions..........................................................54
Section 5.01. Restatement Effective Date...................................54
Section 5.02. Each Credit Event............................................57
ARTICLE VI Affirmative Covenants..............................................57
Section 6.01. Information Covenants........................................58
Section 6.02. Books, Records and Inspections...............................60
Section 6.03. Insurance....................................................60
Section 6.04. Payment of Taxes.............................................60
Section 6.05. Maintenance of Existence.....................................61
Section 6.06. Compliance with Statutes, etc................................61
Section 6.07. ERISA........................................................61
Section 6.08. Maintenance of Property......................................62
Section 6.09. Maintenance of Licenses and Permits..........................62
Section 6.10. End of Fiscal Years; Fiscal Quarters.........................62
Section 6.11. Borrowing Base Requirement...................................62
Section 6.12. Further Assurances...........................................62
ARTICLE VII Negative Covenants................................................63
Section 7.01. Changes in Business..........................................63
Section 7.02. Consolidations, Mergers, Sales of Assets and Acquisitions....63
Section 7.03. Liens........................................................64
Section 7.04. Indebtedness.................................................66
Section 7.05. Issuance of Stock............................................66
Section 7.06. Dissolution..................................................67
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Section 7.07. Restricted Payments..........................................67
Section 7.08. Transactions with Affiliates.................................67
Section 7.09. Maximum Leverage Ratio.......................................68
Section 7.10. Minimum Consolidated Net Worth...............................68
Section 7.11. Limitation on Certain Restrictions on Subsidiaries...........68
Section 7.12. Private Act..................................................69
Section 7.13. Claims Paying Ratings........................................69
ARTICLE VIII Events of Default................................................69
Section 8.01. Payments.....................................................69
Section 8.02. Representations, etc.........................................69
Section 8.03. Covenants....................................................69
Section 8.04. Default under other Agreements...............................69
Section 8.05. Bankruptcy, etc..............................................70
Section 8.06. ERISA........................................................70
Section 8.07. Judgments....................................................71
Section 8.08. Insurance Licenses...........................................71
Section 8.09. Change of Control............................................71
Section 8.10. Security Documents...........................................71
Section 8.11. Company Guaranty.............................................71
ARTICLE IX The Administrative Agent...........................................72
Section 9.01. Appointment..................................................72
Section 9.02. Administrative Agent in its Individual Capacity..............72
Section 9.03. Exculpatory Provisions.......................................72
Section 9.04. Reliance.....................................................73
Section 9.05. Delegation of Duties.........................................73
Section 9.06. Resignation..................................................73
Section 9.07. Non-Reliance.................................................74
Section 9.08. Co-Documentation Agents......................................74
ARTICLE X Company Guaranty....................................................74
Section 10.01. The Company Guaranty........................................74
Section 10.02. Bankruptcy..................................................75
Section 10.03. Nature of Liability.........................................75
Section 10.04. Independent Obligation......................................75
Section 10.05. Authorization...............................................75
Section 10.06. Reliance....................................................76
Section 10.07. Subordination...............................................77
Section 10.08. Waiver......................................................77
ARTICLE XI Miscellaneous......................................................78
Section 11.01. Notices.....................................................78
Section 11.02. Waivers; Amendments.........................................79
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Section 11.03. Expenses; Indemnity; Damage Waiver..........................79
Section 11.04. Successors and Assigns......................................80
Section 11.05. Survival....................................................84
Section 11.06. Counterparts; Integration; Effectiveness....................84
Section 11.07. Severability................................................85
Section 11.08. Right of Setoff.............................................85
Section 11.09. Governing Law; Jurisdiction; Consent to Service of Process..85
Section 11.10. Waiver of Jury Trial........................................86
Section 11.11. Headings....................................................86
Section 11.12. Confidentiality.............................................86
Section 11.13. Interest Rate Limitation....................................87
Section 11.14. USA Patriot Act.............................................87
SCHEDULES:
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Schedule 2.01 -- Commitments
Schedule 2.17 -- Designated Subsidiary Borrowers
Schedule 3.09 -- Existing Fronted Letters of Credit
Schedule 3.10 -- Existing Several Letters of Credit
Schedule 4.13 -- Subsidiaries
Schedule 4.14 -- Capitalization
Schedule 4.15 -- Existing Indebteness
Schedule 4.17 -- Insurance Licenses
Schedule 7.03 -- Existing Liens
EXHIBITS:
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Exhibit A -- Form of Assignment and Assumption
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of DSB Assumption Agreement
Exhibit D-1 -- Security Agreement
Exhibit D-2 -- Form of Security Agreement Acknowledgement
Exhibit E -- Form of Borrowing Request
Exhibit F -- Form of Officers' Certificate
Exhibit G -- Form of Letter of Credit Request
Exhibit H-1 -- Opinion of Borrower's Special New York Counsel
Exhibit H-2 -- Opinion of Borrower's Special Bermuda Counsel
Exhibit H-3 -- Opinion of Borrower's Special Colorado Counsel
Exhibit H-4 -- Opinion of Borrower's Special Indiana Counsel
Exhibit I-1 -- Account Control Agreement
Exhibit I-2 -- Form of Account Control Agreement Acknowledgement
Exhibit J -- Form of Additional Commitment Agreement
Exhibit K -- Form of Exiting Lender Agreement
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CREDIT AGREEMENT dated as of July 13, 2004 and amended and restated as
of July 11, 2005, among QUANTA CAPITAL HOLDINGS LTD., an exempted company
organized under the laws of Bermuda (the "Company"), the Designated Subsidiary
Borrowers (as hereinafter defined) from time to time party hereto, the lenders
from time to time party hereto (each, a "Lender" and, collectively, the
"Lenders"), JPMORGAN CHASE BANK, N.A. (f/k/a JPMorgan Chase Bank) ("JPMorgan
Chase"), as Administrative Agent and BNP Paribas, Calyon, New York Branch,
Comerica Bank and Deutsche Bank AG New York Branch, as Co-Documentation Agents.
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 1.01 are used herein as so defined.
WHEREAS, the Company, the Designated Subsidiary Borrowers, the Existing
Lenders and JPMorgan Chase, as Administrative Agent, are parties to a Credit
Agreement, dated as of July 13, 2004 (as the same has been amended, modified or
supplemented to, but not including, the Restatement Effective Date, the
"Existing Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement in its entirety in the form of this Agreement, subject to and
on the terms and conditions set forth herein, and the Lenders are willing to
make available to the Company and the Designated Subsidiary Borrowers the credit
facility provided herein;
NOW, THEREFORE, the Company, the Designated Subsidiary Borrowers, the
Lenders and the Administrative Agent agree that, on the Restatement Effective
Date, the Existing Credit Agreement shall be and is hereby amended and restated
in its entirety as follows:
ARTICLE I
Definitions
Section 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Account Control Agreement" means the account control agreement,
attached as Exhibit I-1 hereto, dated the Original Effective Date, among
JPMorgan Chase Bank, as Custodian, the Grantors (as defined in the Security
Agreement) from time to time party thereto and the Collateral Agent, as amended,
restated, modified and/or supplemented and as in effect from time to time.
"Account Control Agreement Acknowledgment" has the meaning provided in
Section 5.01(k).
"Additional Commitment Lender" has the meaning provided in Section
2.18(b).
"Additional Commitment" means, for each Additional Commitment Lender,
any commitment provided by such Additional Commitment Lender pursuant to Section
2.18, in such amount as agreed to by such Additional Commitment Lender in the
respective Additional Commitment Agreement; provided that on the Additional
Commitment Date upon which an Additional Commitment of any Additional Commitment
Lender becomes effective, such Additional Commitment of such Additional
Commitment Lender shall (x) in the case of an existing Lender be added to (and
thereafter become a part of) the existing Commitment of such existing Lender for
all purposes of this Agreement as contemplated by Section 2.18 and (y) in the
case of a new Lender, be converted to a Commitment and become a Commitment for
all purposes of this Agreement as contemplated by Section 2.18.
"Additional Commitment Agreement" means an Additional Commitment
Agreement substantially in the form of Exhibit J (appropriately completed).
"Additional Commitment Date" means each date upon which an Additional
Commitment under an Additional Commitment Agreement becomes effective as
provided in Section 2.18.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Advance Rate" means, for any category of Cash or obligation or
investment specified below in the column entitled "Cash and Eligible Securities"
(other than Cash, the "Eligible Securities"), the percentage set forth opposite
such category of Cash or Eligible Securities below in the column entitled
"Advance Rate" and, in each case, subject to the original term to maturity
criteria set forth therein:
<TABLE>
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Cash and Eligible Securities: Advance Rate:
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Cash:
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U.S. Dollars. 100%
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Time Deposits, CDs and Money Market Deposits:
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Time deposits, certificates of deposit and money market deposits of any With maturities of two years or less from
commercial bank incorporated in the United States with a rating of at least (i) the date of determination, 90%.
AA- from S&P and (ii) Aa3 from Xxxxx'x.
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</TABLE>
2
<TABLE>
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U.S. Government Securities:
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Securities issued or directly and fully guaranteed or insured by the United With maturities of (x) two years or less
States or any agency or instrumentality thereof (provided that the full faith from the date of determination, 95%, (y)
and credit of the United States is pledged in support thereof). more than two years to 10 years, 90% and
(z) more than 10 years, 85%.
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Investment Grade Municipal Bonds:
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Municipal Bonds rated at least (i) A from S&P and (ii) A2 from Xxxxx'x. With maturities of five years or less from
the date of determination 85%.
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Investment Grade Non-Convertible Corporate Bonds Level I:
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Non-convertible corporate bonds which are "publicly traded" on a nationally With maturities of (x) two years or less
recognized exchange, eligible to be settled by the Depository Trust Company from the date of determination, 90% and (y)
("DTC") and rated at least (i) AA- from S&P and (ii) Aa3 from Xxxxx'x more than two years to 10 years from the
date of determination, 85%.
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Investment Grade Non-Convertible Corporate Bonds Level II:
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Non-convertible corporate bonds which are "publicly traded" on a nationally With maturities of (x) two years or less
recognized exchange, eligible to be settled by DTC and rated at least (i) A from from the date of determination, 85% and (y)
S&P and (ii) A2 from Xxxxx'x, but no higher than (x) A+ from S&P and (y) A1 from more than two years to 10 years from the
Xxxxx'x. date of determination, 80%.
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Commercial Paper:
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Commercial paper issued by any entity organized in the United States rated at With maturities of not more than one year
least (i) A-1 or the equivalent thereof by S&P and (ii) P-1 or the equivalent from the date of determination, 90%.
thereof by Xxxxx'x.
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Other Securities:
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All other investments, obligations or securities. 0.0%
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</TABLE>
Notwithstanding the foregoing, (A) the value of Eligible Securities at any time
shall be determined based on the Report (as defined in the Security Agreement)
then most recently delivered by the Custodian to the Collateral Agent and (B) if
any single corporate issuer (or any Affiliate thereof) represents more than 10%
of the aggregate value of all Cash and Eligible Securities of the aggregate
amount of all Borrowing Bases, the excess over 10% shall be excluded (with such
exclusion being allocated in equal parts to each Borrowing Base at such time).
"Affiliate" means, with respect to a specified 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.
3
"Agreement" means this Credit Agreement, as modified, supplemented,
amended, restated (including any amendment and restatement hereof), extended or
renewed from time to time.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Commitment Fee Rate" means 0.09%.
"Applicable Insurance Regulatory Authority" means, when used with
respect to any Regulated Insurance Company, (x) the insurance department or
similar administrative authority or agency located in each state or jurisdiction
(foreign or domestic) in which such Regulated Insurance Company is domiciled or
(y) to the extent asserting regulatory jurisdiction over such Regulated
Insurance Company, the insurance department, authority or agency in each state
or jurisdiction (foreign or domestic) in which such Regulated Insurance Company
is licensed, and shall include any Federal or national insurance regulatory
department, authority or agency that may be created and that asserts insurance
regulatory jurisdiction over such Regulated Insurance Company.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the Total Commitment represented by the such Lender's Commitment.
If the Commitments have terminated or expired, the Applicable Percentages shall
be determined based upon the Commitments most recently in effect, giving effect
to any assignments.
"Approved Fund" has the meaning assigned to such term in Section
11.04(b).
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Authorized Officer" means, as to any Person, the Chief Executive
Officer, the President, the Chief Operating Officer, any Vice President, the
Secretary, or the Financial Officer of such Person or any other officer of such
Person duly authorized by such Person to act on behalf of such Person hereunder
and under the other Credit Documents.
"Bankruptcy Code" has the meaning provided in Section 8.05.
"Bermuda Companies Law" means the Companies Xxx 0000 of Bermuda and
other relevant Bermuda law.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowers" means the Company and each Designated Subsidiary Borrower.
4
"Borrowing" means Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Base" means, at any time, and in respect of each Borrower,
the aggregate amount of Cash and Eligible Securities held in the Collateral
Accounts of such Borrower under the Security Agreement at such time multiplied
in each case by the respective Advance Rates for Cash and such Eligible
Securities; provided that all Cash and Eligible Securities in respect of any
Borrowing Base shall only be included in such Borrowing Base to the extent same
are subject to a first priority perfected security interest in favor of the
Collateral Agent pursuant to the Security Documents.
"Borrowing Base Certificate" means a Borrowing Base Certificate
substantially in the form of Exhibit B hereto.
"Borrowing Request" means a request by the Company for a Borrowing in
accordance with Section 2.03.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the City of New York a legal holiday or a day on which banking institutions
are authorized by law or other governmental actions to close, and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Markets Product" means, as to the Company or any Subsidiary,
any security, commodity, derivative transaction or other financial product
purchased, sold or entered into by such Person for the purpose of undertaking
one or more risks assumed by the Company or any Subsidiary in the ordinary
course of business or managing one or more risks otherwise assumed by the
Company or any Subsidiary, including (i) any structured insurance product,
catastrophe bond, rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
transaction, credit protection transaction, credit swap, credit default swap,
credit default option, equity default swap, total return swap, credit spread
transaction, repurchase transaction, reverse repurchase transaction,
buy/sellback transaction, securities lending transaction, weather index
transaction, emissions allowance transaction, or forward purchase or sale of a
security, commodity or other financial instrument or interest (including any
option with respect to any of these transactions), (ii) which is a type of
transaction that is similar to any transaction referred to in clause (i) above
that is currently, or in the future becomes, recurrently entered into in the
5
financial markets, (iii) any combination of the transactions referred to in
clauses (i) and (ii) above and (iv) any master agreement relating to any of the
transactions referred to in clauses (i), (ii) and (iii) above.
"Cash Equivalents" means, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having, capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper rated at least A-1 or the equivalent thereof
by S&P or at least P-1 or the equivalent thereof by Xxxxx'x and in each case
maturing not more than one year after the date of acquisition by such Person,
(v) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (iv)
above.
"Change of Control" means (x) during any period of two consecutive
years, directors who at the beginning of such period constituted a majority of
the Board of Directors of the Company (together with any new directors whose
election by such Board or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office or (y) any "person" or "group" (as such terms are defined in Section
13(d) of the Securities Exchange Act of 1934, as amended) shall become the
beneficial owner, directly or indirectly of shares representing more than 40% of
the aggregate voting power represented by the issued and outstanding capital
stock of the Company.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Charges" has the meaning provided in Section 11.13.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Co-Documentation Agent" means each of BNP Paribas, Calyon, New York
Branch, Comerica Bank and Deutsche Bank AG New York Branch, in their capacities
as Co-Documentation Agents.
6
"Collateral" has the meaning provided in the Security Agreement.
"Collateral Account" has the meaning provided in the Security
Agreement.
"Collateral Agent" has the meaning provided in the Security Agreement.
"Commitment" means, with respect to each Lender, at any time, the
amount set forth opposite such Lender's name on Schedule 2.01, as the same may
be reduced pursuant to Sections 2.06, 2.16 or 11.04.
"Commitment Expiration Date" means July 11, 2008.
"Company" means Quanta Capital Holdings Ltd., a company organized under
the laws of Bermuda.
"Company Guaranty" means the guaranty of the Company provided in
Article X.
"Consolidated Indebtedness" means, as of any date of determination, all
Indebtedness (other than with respect to Indebtedness described in clause (h) of
the definition thereof) of the Company and its Subsidiaries which at such time
would appear on the liability side of a balance sheet of such Persons prepared
on a consolidated basis in accordance with GAAP. For the avoidance of doubt,
"Consolidated Indebtedness" shall not include any Guarantees of any Person under
or in connection with letters of credit or similar facilities so long as no
drawings or payments have been made in respect thereof.
"Consolidated Net Worth" means, as of any date of determination, the
Net Worth of the Company and its Subsidiaries determined on a consolidated basis
in accordance with GAAP after appropriate deduction for any minority interests
in Subsidiaries.
"Consolidated Total Capital" means, as of any date of determination,
the sum of (i) Consolidated Indebtedness and (ii) Consolidated Net Worth at such
time.
"Control" means the possession, directly or indirectly, of the power
(i) to vote 10% or more of the voting power of the securities having ordinary
voting power for the election of directors of such corporation or (ii) to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Documents" means this Agreement, the promissory notes delivered
pursuant to Section 2.07(e) (if any) and each Security Document.
"Credit Event" means the making of any Loan or the issuance of any
Letter of Credit (or any increase of the Stated Amount thereof).
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
7
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Designated Subsidiary Borrower" means each Wholly-Owned Subsidiary of
the Company set forth on Schedule 2.17 and each Wholly-Owned Subsidiary of the
Company which is designated as a Designated Subsidiary Borrower in accordance
with Section 2.17.
"Dividends" has the meaning provided in Section 7.07.
"Dollars" or "$" refers to lawful money of the United States of
America.
"DSB Assumption Agreement" means an assumption agreement in the form of
Exhibit C.
"Eligible Person" means and includes any commercial bank, insurance
company, finance company, financial institution, fund that invests in loans or
any other "accredited investor" (as defined in Regulation D of the Securities
Act), but in any event excluding the Company and its Subsidiaries.
"Eligible Securities" has the meaning provided in the definition of the
term Advance Rates.
"Environmental Law" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary 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, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, 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 other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
8
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Company or any of its Subsidiaries or is
under common control (within the meaning of Section 414(c) of the Code) with the
Company or any of its Subsidiaries.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VIII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income or net profits by any jurisdiction 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 of America or
any similar tax imposed by any other jurisdiction in which the recipient is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by such Borrower under Section 2.16(b)), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.14(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 such Borrower with respect to such withholding
tax pursuant to Section 2.14(a).
"Existing Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
"Existing Fronted Letter of Credit" shall have the meaning provided in
Section 3.09.
"Existing Lender" means each "Lender" under and as defined in the
Existing Credit Agreement.
"Existing Preferred Stock" means collectively, the First Consent
Preferred Stock and the Second Consent Preferred Stock.
"Existing Preferred Stock Documents" means the First Consent Preferred
Stock Documents and the Second Consent Preferred Stock Documents.
9
"Existing Several Letter of Credit" shall have the meaning provided in
Section 3.10.
"Exiting Lender Agreement" shall mean the Exiting Lender Agreement
substantially in the form of Exhibit K (appropriately completed).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"First Consent" means the First Consent to the Existing Credit
Agreement, dated as of December 16, 2004, among the Company, the Designated
Subsidiary Borrowers, the Existing Lenders and the Administrative Agent.
"First Consent Preferred Stock" means the preferred equity of the
Company issued in connection with, and pursuant to, the First Consent Preferred
Stock Documents.
"First Consent Preferred Stock Documents" means collectively, the
"Declaration of Trust", the "Capital Securities Purchase Agreement", the "Common
Securities Purchase Agreement" and the "Indenture", in each case, as such terms
are defined in the First Consent.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the applicable Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company or any one or
more of its Subsidiaries primarily for the benefit of employees of the Company
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Fronted Letter of Credit" has the meaning provided in Section 3.02(a)
and shall include each Existing Fronted Letter of Credit.
"Fronted Unpaid Drawing" has the meaning provided in clause (y) of
Section 3.05(a).
10
"Fronting Arrangement" means an agreement or other arrangement by a
Regulated Insurance Company pursuant to which an insurer or insurers agree to
issue insurance policies at the request or on behalf of such Regulated Insurance
Company and such Regulated Insurance Company assumes the obligations in respect
thereof pursuant a Reinsurance Agreement or otherwise.
"Fronting Lender" means JPMorgan Chase Bank, [Calyon, New York Bank]
(and any of their respective Affiliates) and any other Lender (or any Affiliate
thereof) which is requested by the Company, and which agrees in writing, to
issue Fronted Letters of Credit hereunder pursuant to Section 3.02; provided
that (x) in the case of JPMorgan Chase Bank (and its Affiliates), it shall not
be required to issue more than $12,500,000 in aggregate Stated Amount of all
Fronted Letters of Credits, and (y) in the case of Calyon, New York Branch (and
its Affiliates), it shall not be required to issue more than $12,500,000 in
aggregate Stated Amount of all Fronted Letters of Credits issued by it or such
Affiliates.
"Fronting Participant" has the meaning provided in Section 3.02(b).
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or 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.
"Guarantee" of or by any Person (the "guarantor") means any obligation
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee shall not include (w) endorsements of instruments for deposit or
collection in the ordinary course of business, (x) obligations of any Regulated
Insurance Company under Insurance Contracts, Reinsurance Agreements, Fronting
Arrangements or Retrocession Agreements (including any Liens with respect
thereto) and (y) obligations under indemnities incurred in the ordinary course
of business or under stock purchase or asset purchase or sale agreements, or
which do not cover Indebtedness of the type described in clauses (a) through (i)
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 primary
obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
11
"Guaranteed Creditors" means and includes each of the Administrative
Agent, the Collateral Agent, the Lenders and each LC Issuer.
"Guaranteed Obligations" means all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit and all other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness owing by each
Designated Subsidiary Borrower to the Guaranteed Creditors under this Agreement
and each other Credit Document to which such Designated Subsidiary Borrower is a
party (including, without limitation, indemnities, fees and interest thereon
(including, in each case, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the respective documentation, whether or not such interest is allowed in
any such proceeding)), whether now existing or hereafter incurred under, arising
out of or in connection with this Agreement and any such other Credit Document
and the due performance and compliance by each Designated Subsidiary Borrower
with all of the terms, conditions and agreements contained in all such Credit
Documents applicable to such Designated Subsidiary Borrower.
"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.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services,
(e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, provided that the amount of
Indebtedness of such Person shall be the lesser of (A) the fair market value of
such property at such date of determination (determined in good faith by the
Company) and (B) the amount of such Indebtedness of such other Person, (f) all
Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations (or to the extent netting is
permitted under the applicable agreement governing such Capital Markets Products
and such netting is limited with respect to the counterparty or counterparties
of such agreement, all net termination obligations) of such Person under
transactions in Capital Markets Products, (i) all reimbursement obligations of
such Person in respect of letters of credit, letters of guaranty, bankers'
acceptances and similar credit transactions and (j) solely for purposes of
Section 8.04, all preferred or preference securities to the extent such
preferred or preference securities would constitute "debt" in accordance with
GAAP. The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor. For
the avoidance of doubt, Indebtedness shall not include (v) trade payables
(including payables under insurance
12
contracts and reinsurance payables) and accrued expenses in each case arising in
the ordinary course of business, (w) obligations and Guarantees of Regulated
Insurance Companies with respect to Policies, (x) obligations arising under
deferred compensation plans of the Company and its Subsidiaries in effect on the
date hereof or which have been approved by the board of directors of the Company
or a committee thereof, (y) obligations and Guarantees with respect to products
underwritten by Regulated Insurance Companies in the ordinary course of
business, including insurance policies, annuities, performance and surety bonds,
assumptions of liabilities and any related contingent obligations and (z)
Reinsurance Agreements and Fronting Arrangements and Guarantees thereof entered
into by any Regulated Insurance Company in the ordinary course of business.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning provided in Section 11.03(b).
"Information" has the meaning provided in Section 11.12.
"Issuing Agent" means JPMorgan Chase Bank.
"Insurance Business" means one or more aspects of the business of
selling, issuing or underwriting insurance or reinsurance.
"Insurance Contract" means any insurance contract or policy issued by a
Regulated Insurance Company but shall not include any Reinsurance Agreement,
Fronting Arrangement or Retrocession Agreement.
"Insurance Licenses" has the meaning provided in Section 4.17.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest Periods of three months
duration been applicable to such Borrowing.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Company may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Eurodollar Borrowing,
13
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"JPMorgan Chase" has the meaning provided in the first paragraph of
this Agreement.
"LC Issuer" means each of the Issuing Agent and each Fronting Lender.
"Legal Requirements" means all applicable laws, rules and regulations
and interpretations thereof made by any governmental body or regulatory
authority (including, without limitation, any Applicable Insurance Regulatory
Authority) having jurisdiction over the Company or a Subsidiary of the Company.
"Lender Default" means (i) the refusal (which has not been retracted)
of a Lender to make available its portion of any Borrowing or (ii) a Lender
having notified the Administrative Agent and/or each Borrower that it does not
intend to comply with its obligations under Section 2.01, in each case, as a
result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority.
"Lenders" has the meaning provided in the first paragraph of this
Agreement.
"Letter of Credit Fee" has the meaning provided in Section 2.09(c).
"Letter of Credit Outstandings" means, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Several Letters of Credit, (ii) the
aggregate Stated Amount of all outstanding Fronted Letters of Credit and (iii)
the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit
at such time.
"Letter of Credit Request" has the meaning provided in Section 3.04(a).
"Letter of Credit Supportable Obligations" means the obligations of the
Borrowers or any of their Subsidiaries which are permitted to exist pursuant to
the terms of this Agreement in connection with the principal lines of business
of such Borrower and its Subsidiaries.
"Letters of Credit" means the Several Letters of Credit and the Fronted
Letters of Credit.
"Leverage Ratio" means the ratio of (i) Consolidated Indebtedness plus
the aggregate liquidation preference of any preferred or preference securities
issued by the Company or any of its Subsidiaries to the extent such preferred or
preference securities would constitute "debt" in accordance with GAAP to (ii)
Consolidated Total Capital.
"LIBO Rate" means with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service
(or on any successor or substitute page or pages of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page or pages of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at
14
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which
deposits of $5,000,000, and for a maturity comparable to such Interest Period,
are offered by the Administrative Agent.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Life Facility" means an unsecured credit facility among one or more
Subsidiaries and one or more lenders to be entered into [on or after the
Restatement Effective Date] providing for the issuance of letters of credit up
to an aggregate stated amount of $50,000,000 to support each such Subsidiary's
obligations under one or more Reinsurance Agreements pursuant to which the
ceding party has ceded to such Subsidiary certain life insurance risks.
"Lloyd's Facility" means an unsecured credit facility among one or more
Subsidiaries and one or more lenders to be entered into on or after the
Restatement Effective Date providing for (x) a revolving working capital credit
facility in an amount up to $1,000,000 and (y) the issuance of letters of credit
up to an aggregate stated amount of $50,000,000 to support each such
Subsidiary's obligations under one or more Lloyd's Syndicate Arrangements.
"Lloyd's Syndicate Arrangement" means any arrangement (whether pursuant
to guarantees, letters of credit, or otherwise) entered into by a managing agent
at Lloyd's of London on behalf of a Subsidiary together with other members of a
syndicate for the purposes of or in connection with the underwriting business
carried on by all such members of that syndicate.
"Loan" has the meaning provided in Section 2.01(a).
"Margin Stock" has the meaning provided in Regulation U.
"Material Adverse Effect" means any material adverse condition or any
material adverse change in or affecting (x) the business, operations, property
or condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole or (y) the rights or remedies of the Lenders or the ability of the
Company and each Borrower to perform their respective obligations to the Lenders
under this Agreement or any other Credit Document.
"Maximum Rate" has the meaning provided in Section 11.13.
"Minimum Consolidated Net Worth Amount" shall mean, at any time, an
amount which initially shall be equal to $301,000,000, and which amount shall be
increased immediately following the last day of each fiscal quarter (commencing
with the fiscal quarter ending on June 30, 2005) by an amount (if positive)
equal to 50% of the Net Income of the Company and its Subsidiaries for such
fiscal quarter.
15
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any multiemployer plan as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there
is an obligation to contribute of) the Company, any of its Subsidiaries or any
of its ERISA Affiliates, and each such plan for the five year period immediately
following the latest date on which the Company, such Subsidiary or such ERISA
Affiliate contributed to or had an obligation to contribute to such plan.
"NAIC" means the National Association of Insurance Commissioners and
any successor thereto.
"NAIC Approved Bank" means (a) any bank listed on the most current list
of banks approved by the Securities Valuation Office of the NAIC (the "NAIC Bank
List") or (b) any Lender as to which its confirming bank is a bank listed on the
NAIC Bank List.
"Net Income" shall mean, for any period, an amount equal to the net
income of the Company and its Subsidiaries (determined on a consolidated basis
in accordance with GAAP) for such period.
"Net Worth" means, as to any Person, the sum of its capital stock
(including, without limitation, its preferred stock), capital in excess of par
or stated value of shares of its capital stock (including, without limitation,
its preferred stock), retained earnings and any other account which, in
accordance with GAAP, constitutes stockholders equity, but excluding (i) any
treasury stock and (ii) the effects of Financial Accounting Statement No. 115.
"Non-Continuing Lender" has the meaning provided in Section 5.01(d).
"Non-Defaulting Lender" means each Lender other than a Defaulting
Lender.
"Notice of Non-Extension" has the meaning provided in Section 3.07.
"Original Effective Date" means the "Effective Date" under, and as
defined in, the Existing Credit Agreement.
"Other Taxes" means, any and all present or future stamp or documentary
taxes or any other similar excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or performance under, this Agreement.
"Participant" has the meaning set forth in Section 11.04(c)
"Patriot Act" has the meaning set forth in Section 11.14.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Subsidiary Indebtedness" means:
16
(a) Indebtedness of any Subsidiary of the Company under the Credit
Documents or existing on the date hereof and listed on Schedule 4.15 and
refinancings by such Subsidiary thereof; provided that the aggregate
principal amount of any such refinancing Indebtedness is not greater than
the aggregate principal amount of the Indebtedness being refinanced plus
the amount of any premiums required to be paid thereon and fees and
expenses associated therewith;
(b) Indebtedness of any Subsidiary of the Company incurred in the
ordinary course of business in connection with any Capital Markets Product;
(c) any Indebtedness owed by Subsidiaries of the Company to the Company
or any of its Subsidiaries;
(d) Indebtedness in respect of purchase money obligations and Capital
Lease Obligations of any Subsidiary of the Company, and refinancings
thereof; provided that the aggregate principal amount of all such Capital
Lease Obligations does not exceed at any time outstanding $5,000,000 at the
time of incurrence of any new Indebtedness under this clause (d);
(e) Indebtedness of any Subsidiary of the Company in respect of letters
of credit issued to reinsurance cedents, or to lessors of real property in
lieu of security deposits in connection with leases of any Subsidiary of
the Company, in each case in the ordinary course of business;
(f) Indebtedness of any Subsidiary of the Company incurred in the
ordinary course of business in connection with workers' compensation
claims, self-insurance obligations, unemployment insurance or other forms
of governmental insurance or benefits and pursuant to letters of credit or
other security arrangements entered into in connection with such insurance
or benefit;
(g) Indebtedness of certain Subsidiaries under (x) the Lloyds Facility
and (y) the Life Facility, in each case, including amendments,
modifications or supplements thereto; provided that (i) neither the Lloyds
Facility nor the Life Facility shall be subject to covenants, events of
default or other terms and provisions which are materially more restrictive
than the covenants, events of default and other terms and provisions
contained herein and(ii) at the time either such credit facility is entered
into no Default or Event of Default exists and is continuing;
(h) Indebtedness arising from Guarantees made by any Subsidiary of the
Company of Indebtedness of the type described in clauses (a) through (g) of
this definition; and
(i) without duplication, additional Indebtedness of Subsidiaries of the
Company not otherwise permitted under clauses (a) through (h) of this
definition which, when added to the aggregate amount of all outstanding
obligations secured by liens incurred by the Company pursuant to Section
7.03(v), shall not exceed at any time outstanding the sum of (x) 10% of
Consolidated Net Worth at the time of incurrence of any new Indebtedness
under this clause (i) and (y) $5,000,000.
17
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any pension plan as defined in Section 3(2) of ERISA and
subject to Title IV of ERISA, which is maintained or contributed to by (or to
which there is an obligation to contribute of) the Company or any of its
Subsidiaries or any of its ERISA Affiliates, and each such plan for the five
year period immediately following the latest date on which the Company, any of
its Subsidiaries or any of its ERISA Affiliates maintained, contributed to or
had an obligation to contribute to such plan.
"Policies" means all insurance policies, annuity contracts, guaranteed
interest contracts and funding agreements (including riders to any such policies
or contracts, certificates issued with respect to group life insurance or
annuity contracts and any contracts issued in connection with retirement plans
or arrangements) and assumption certificates issued or to be issued (or filed
pending current review by applicable Governmental Authorities) by any Regulated
Insurance Company and any coinsurance agreements entered into or to be entered
into by any Regulated Insurance Company.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Private Act" means separate legislation enacted in Bermuda with the
intention that such legislation apply specifically to any Borrower, in whole or
in part.
"Protected Cell Company" means a Subsidiary that has created segregated
accounts pursuant to the provisions of the Segregated Account Companies Act 2000
of Bermuda.
"Register" has the meaning set forth in Section 11.04(b).
"Regulated Insurance Company" means any Subsidiary of the Company,
whether now owned or hereafter acquired, that is authorized or admitted to carry
on or transact Insurance Business in any jurisdiction (foreign or domestic) and
is regulated by any Applicable Insurance Regulatory Authority.
"Regulation D" means Regulation D of the Board as from time to time in
effect and any successor to all or a portion thereof establishing reserve
requirements.
"Regulation T" means Regulation T of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.
"Regulation U" means Regulation U of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.
"Regulation X" means Regulation X of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.
18
"Reinsurance Agreement" means any agreement, contract, treaty,
certificate or other arrangement whereby any Regulated Insurance Company agrees
to transfer, cede or retrocede to another insurer or reinsurer all or part of
the liability assumed or assets held by such Regulated Insurance Company under a
policy or policies of insurance issued by such Regulated Insurance Company or
under a reinsurance agreement assumed by such Regulated Insurance Company.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Replaced Lender" has the meaning provided in Section 2.16(b).
"Replacement Lender" has the meaning provided in Section 2.16(b).
"Required Lenders" means at any time Non-Defaulting Lenders having at
least a majority of the aggregate Commitments of all Non-Defaulting Lenders;
provided that if the Total Commitment has been terminated, then the Required
Lenders means Lenders whose outstanding Loans and participating interest in
Letters of Credit equal or exceed a majority of the Revolving Credit Exposure at
such time.
"Restatement Effective Date" has the meaning provided in Section 5.01.
"Retrocession Agreement" means any agreement, contract, treaty or other
arrangement whereby one or more insurers or reinsurers, as retrocessionaires,
assume liabilities of reinsurers under a Reinsurance Agreement or other
retrocessionaires under another Retrocession Agreement.
"Revolving Credit Exposure" means, at any time, the sum of (i) the
aggregate principal amount of all Loans then outstanding and (ii) the aggregate
amount of all Letter of Credit Outstandings at such time.
"S&P" means Standard & Poor's Ratings Services.
"SAP" means, with respect to any Regulated Insurance Company, the
statutory accounting principles and accounting procedures and practices
prescribed or permitted by the Applicable Insurance Regulatory Authority of the
state or jurisdiction in which such Regulated Insurance Company is domiciled; it
being understood and agreed that determinations in accordance with SAP for
purposes of Article VIII, including defined terms as used therein, are subject
(to the extent provided therein) to Section 1.04.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Second Consent" means the Second Consent to the Existing Credit
Agreement, dated as of February 16, 2005, among the Company, the Designated
Subsidiary Borrowers, the Existing Lenders and the Administrative Agent.
"Second Consent Preferred Stock" means the preferred equity of the
Company issued in connection with, and pursuant to, the Second Consent Preferred
Stock Documents.
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"Second Consent Preferred Stock Documents" means collectively, the
"Declaration of Trust", the "Capital Securities Purchase Agreement", the "Common
Securities Purchase Agreement" and the "Indenture" , in each case, as such terms
are defined in the Second Consent.
"Security Agreement" means the Pledge and Security Agreement attached
as Exhibit D-1 hereto, dated as of the Original Effective Date, made by each of
the undersigned grantors thereto in favor of JPMorgan Chase Bank, as Collateral
Agent, for the benefit of the Secured Creditors (as defined therein), as
amended, restated, modified and/or supplemented and as in effect from time to
time.
"Security Agreement Acknowledgement" has the meaning provided in
Section 5.01(k).
"Security Documents" means (i) the Security Agreement, (ii) the
Security Agreement Acknowledgement, (iii) the Account Control Agreement, (iv)
the Account Control Agreement Acknowledgment, (v) each other security agreement
executed and delivered pursuant to Section 6.12 of this Agreement, and (vi) each
other document, agreement, certificate and or financing statement, executed,
delivered, made or filed pursuant to the terms of the documents specified in
foregoing clauses (i) , (ii), (iii), (iv) and (v).
"Service of Process Agent" means CT Corporation System.
"Several Letter of Credit" has the meaning provided in Section 3.01(a)
and shall include each Existing Several Letter of Credit.
"Several Unpaid Drawing" has the meaning provided in clause (x) of
Section 3.05(a).
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the amount of the "present fair saleable value" of each of the
business and assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
salable value of each of the business and assets of such Person is greater than
the amount that will be required to be paid on or in respect of the probable
"liability" on the existing debts and other "liabilities contingent or
otherwise" of such Person, (c) the assets of such Person do not constitute
unreasonably small capital for such Person to carry out its business as now
conducted and as proposed to be conducted including the capital needs of such
Person, taking into account the particular capital requirements of the business
conducted by such Person and projected capital requirements and capital
availability thereof, (d) such Person does not intend to incur debts beyond
their ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be received by such Person, and of amounts to be payable
on or in respect of debt of such Person) and (e) such Person does not believe
that final judgments against such Person in actions for money damages presently
pending will be rendered at a time when, or in an amount such that, they will be
unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered) and such
20
Person believes that its cash flow, after taking into account all other
anticipated uses of the cash of such Person (including, without limitation, the
payments on or in respect of debt referred to in paragraph (d) of this
definition), will at all times be sufficient to pay all such judgments promptly
in accordance with their terms. For purposes of this definition, (i) "debt"
means liability on a "claim", and (ii) "claim" means any (A) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (B) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured.
"Specified Obligor" means each of the Company and each other Borrower
that is not a U.S. Regulated Insurance Company.
"Stated Amount" means at, any time, the maximum amount available to be
drawn under any Letter of Credit (regardless of whether any conditions for
drawing could then be met).
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
Eurodollar funding (currently referred to as "Eurodollar Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
Eurodollar funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Statutory Statements" means, with respect to any Regulated Insurance
Company for any fiscal year, the annual or quarterly financial statements of
such Regulated Insurance Company 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.
"Statutory Surplus" means, in respect of any Regulated Insurance
Company, the statutory surplus of such Regulated Insurance Company determined in
accordance with the SAP applicable to such Regulated Insurance Company.
"Subsidiary" means any subsidiary of the Company.
"subsidiary" with respect to any Person (the "parent") at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such
21
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Commitment" means, at any time, the sum of the Commitments of
each of the Lenders at such time.
"Transaction" means the execution, delivery and performance by each
Borrower of this Agreement, the borrowing of Loans by the Company and the use of
the proceeds thereof and the issuance of Letters of Credit for the account of
any Borrower and the granting of Liens pursuant to the Security Documents, in
each case, on and after the Original Effective Date.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Uniform Commercial Code" has the meaning provided in the Security
Agreement.
"Unpaid Drawings" means the Several Unpaid Drawings and the Fronted
Unpaid Drawings.
"U.S. Regulated Insurance Company" means any Person that is a Regulated
Insurance Company regulated by an Applicable Insurance Regulatory Authority of
any State of the United States of America.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
Person to the extent all of the capital stock or other ownership interests in
such Subsidiary, other than directors' or nominees' qualifying shares, is owned
directly or indirectly by such Person.
Section 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan" or an "ABR Loan"). Borrowings also may be classified and
referred to by Type (e.g., a "Eurodollar Borrowing" or an "ABR Borrowing").
Section 1.03. Terms Generally. 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 (a) any definition of or reference to any
agreement, instrument or other document herein 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), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder",
22
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and
(e) 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.
Section 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP or SAP, as the case may be, as in effect from
time to time; provided that, if the Company notifies the Administrative Agent
that the Company requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or SAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Company that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or SAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP or SAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance with Section 11.02.
ARTICLE II
The Credits
Section 2.01. Commitments. Subject to and upon the terms and conditions
herein set forth, each Lender severally agrees, at any time and from time to
time on and after the Restatement Effective Date and prior to the Commitment
Expiration Date, to make a loan or loans (each, a "Loan" and, collectively, the
"Loans") to the Company, which Loans (i) may be made and maintained only in
Dollars; (ii) may be repaid and reborrowed in accordance with the provisions
hereof; (iii) except as hereinafter provided, may, at the option of the Company,
be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar
Loans, provided that all Loans made as part of the same Borrowing shall, unless
otherwise specified herein, consist of Loans of the same Type; and (iv) (x)
shall not be made (and shall not be required to be made) by any Lender if the
making of same would cause the Revolving Credit Exposure (after giving effect to
the use of the proceeds thereof on the date of the incurrence thereof to repay
any amounts theretofore outstanding pursuant to this Agreement) to exceed the
Total Commitment as then in effect, (y) shall not be made (and shall not be
required to be made) by any Lender if the making of same would cause the
Revolving Credit Exposure attributable to the Company (after giving effect to
the use of the proceeds thereof on the date of the incurrence thereof to repay
amounts theretofore outstanding pursuant to this Agreement) to exceed the
Company's Borrowing Base at such time and (z) shall not be made (and shall not
be required to be made) by any Lender if the making of same would cause the
aggregate principal amount of all Loans then outstanding (after giving effect to
the use of the proceeds thereof on the date of the incurrence thereof to repay
amounts theretofore outstanding pursuant to this Agreement) to exceed
$25,000,000.
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Section 2.02. Loans and Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder nor shall any other party be liable for the failure by such Lender to
perform its obligations hereunder.
(b) Subject to Section 2.11, each Borrowing shall be comprised entirely
of ABR Loans or Eurodollar Loans as the Company may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Company to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate principal amount of not less
than $5,000,000. At the time that each ABR Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and
not less than $5,000,000; provided that a Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the Total Commitment.
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of ten Eurodollar
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Company
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Commitment Expiration Date.
Section 2.03. Requests for Borrowings. To request a Borrowing, the
Company shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing and (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or facsimile to
the Administrative Agent of a written Borrowing Request in the form of Exhibit E
appropriately completed and signed by the Company. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate principal amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
24
(v) the location and number of the Company's account to which funds are
to be disbursed.
If no election as to the Type of Borrowing of Loans is specified, then
such Borrowing of Loans shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Company
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
Section 2.04. Funding of Borrowings. (a) Each Lender shall make each
Loan on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Company by wire
transfer of immediately available funds not later than 2:00 p.m. New York City
time to the account of the Company designated by it in the applicable Borrowing
Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing (or prior to 1:00 p.m. (New
York City time) on the date of such Borrowing in the case of ABR Borrowings)
that such Lender will not make available to the Administrative Agent such
Lender's share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with paragraph
(a) of this Section and may, in reliance upon such assumption, make available to
the Company a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Company severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Company to but excluding the date of payment to the Administrative Agent,
at (i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the
Company, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
Section 2.05. Interest Elections. (a) Each Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Company may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.05. Subject to the other provisions of this Section 2.05, the
Company may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Company shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would
25
be required under Section 2.03 if the Company were requesting a Borrowing of the
Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Company.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (v) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) the amount of the Company's Borrowing Base at such time; and
(v) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term Interest
Period.
If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Company shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding anything to the contrary contained in this Agreement,
if a Default or an Event of Default is in existence, then, so long as a Default
or an Event of Default is in existence (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
Section 2.06. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Total Commitment (and the Commitment of each Lender)
shall terminate on the Commitment Expiration Date.
26
(b) The Company may at any time terminate, or from time to time reduce,
the Total Commitment; provided that (i) each reduction of the Total Commitment
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) the Company shall not terminate or reduce the Total
Commitment if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.08, the Revolving Credit Exposures would exceed the
Total Commitment. Each such reduction shall be applied to the Commitments of the
Lenders on a pro rata basis based on the amount of such Lenders' respective
Commitments.
(c) The Company shall notify the Administrative Agent of any election
to terminate or reduce the Total Commitment under paragraph (b) of this Section
2.06 at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable. Any termination or
reduction of the Total Commitment (or the Commitments of any Lender) shall be
permanent. Each reduction of the Total Commitment shall be made ratably among
the Lenders in accordance with their respective Commitments.
Section 2.07. Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of all Loans on the
Commitment Expiration Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Company to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Company shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent and the Company. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 11.04) be represented by one or
more
27
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).
Section 2.08. Prepayment of Loans; Additional Borrowing Base
Requirements. (a) The Company shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, without premium or penalty,
except as provided in Section 2.13, subject to prior notice in accordance with
paragraph (b) of this Section.
(b) The Company shall notify the Administrative Agent by telephone
(confirmed by facsimile) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the Borrowing or Borrowings
which are to be prepaid and the currency in which such Borrowing or Borrowings
are denominated and the principal amount of each Borrowing or portion thereof to
be prepaid. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.10.
(c) If on any date the Revolving Credit Exposure exceeds the Total
Commitment as then in effect, the Company shall prepay on such date the
principal amount of outstanding Loans equal to such excess. If, after giving
effect to the prepayment of all outstanding Loans, the aggregate amount of all
Letter of Credit Outstandings exceeds the Total Commitment as then in effect,
the Company shall, or shall cause one or more other Borrowers to, pay or deliver
to the Administrative Agent on such date an amount of cash or Cash Equivalents
equal to the amount of such excess, such cash or Cash Equivalents to be held as
additional security for all obligations of the respective Borrower hereunder in
the Collateral Account applicable to such Borrower.
(d) If on any date, after giving effect to any prepayment of
outstanding Loans pursuant to paragraph (c) above, the Revolving Credit Exposure
attributable to any Borrower exceeds the Borrowing Base of such Borrower at such
time, such Borrower agrees to (i) in the case of the Company, within two
Business Days of the date on which the Company receives notice from the
Administrative Agent that the Revolving Credit Exposure attributable to the
Company exceeds the Company's Borrowing Base, prepay the principal amount of
outstanding Loans and/or pay or deliver to the Collateral Agent an amount of
cash or Eligible Securities (valued for this purpose based on the respective
Advance Rate applicable thereto) in an aggregate amount equal to such excess,
with any such cash or Eligible Securities to be held as additional security for
all obligations of the Company hereunder in the Collateral Account applicable to
the Company and (ii) in the case of any other Borrower, within two Business Days
of the date on which the Company or such Borrower receives notice from the
Administrative Agent that the Revolving Credit Exposure attributable to such
Borrower exceeds such Borrower's Borrowing Base, pay or deliver to the
Collateral Agent an amount of cash or Eligible
28
Securities (valued for this purpose based on the respective Advance Rate
applicable thereto) in an aggregate amount equal to such excess, with any such
cash or Eligible Securities to be held as additional security for all
obligations of such Borrower hereunder in the Collateral Account applicable to
such Borrower.
Section 2.09. Fees. (a) Each Specified Obligor jointly and severally
agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the Applicable Commitment Fee Rate on the
daily amount of the unutilized Commitment of such Lender during the period from
and including the Restatement Effective Date to but excluding the Commitment
Expiration Date. Accrued commitment fees shall be payable in arrears on the last
day of March, June, September and December of each year and on the Commitment
Expiration Date, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(b) The Company agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(c) Each Borrower severally agrees to pay to the Administrative Agent
for pro rata distribution to each Lender (based on their respective Applicable
Percentages), a fee in respect of each Letter of Credit issued for the account
of such Borrower (the "Letter of Credit Fee") computed at a rate per annum equal
to 0.35% on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable in arrears on the last day of March, June,
September and December of each year and upon the first day on or after the
termination of the Total Commitment upon which no Letters of Credit remain
outstanding.
(d) Each Borrower severally agrees to pay to each Fronting Lender, for
its own account, a fronting fee in respect of each Fronted Letter of Credit
issued by such Fronting Lender for the account of such Borrower in an amount and
on dates as shall have separately been agreed to by the Company and such
Fronting Lender.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution to the
Persons entitled thereto as set forth above. Fees paid shall not be refundable
under any circumstances.
Section 2.10. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus 0.35%.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by any Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
29
of this Section 2.10 or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section 2.10.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and on the Commitment Expiration Date;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the Commitment
Expiration Date), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
Section 2.11. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent reasonably determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (based
on the reasonable determination of such Required Lenders) that the Adjusted
LIBO Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in
such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) in the case of
clauses (a) and (b) above any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing provided that if the circumstances giving rise to such notice affect
only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.
Section 2.12. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
30
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Company will pay to such
Lender, as the case may be, such additional amount or amounts as will compensate
such Lender, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender reasonably determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender, to a level below that which such Lender or such Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth (i) the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section and (ii) the basis, in
reasonable detail, for the computation of such amount or amounts, which shall be
consistently applied shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay such Lender the amount shown as due
on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Company shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 90 days prior to the date that such Lender
notifies the Company of the Change in Law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
provided, further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 90-day period referred to above
shall be extended to include the period of retroactive effect thereof.
Section 2.13. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of a mandatory
prepayment under Section 2.08 or the occurrence of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto, or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Company pursuant to Section 2.16, then, in any such event, the Company shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such
31
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the Eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
Section 2.14. Taxes. (a) Any and all payments by or on account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if such
Borrower shall be required to deduct any Indemnified Taxes or 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 or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower severally (and not jointly) agrees to indemnify the
Administrative Agent and each Lender within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes that such
Borrower failed to deduct or withhold and that were paid by the Administrative
Agent or such Lender on or with respect to any payment by or on account of any
obligation of such Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) 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 (with
reasonable detail) delivered to any Borrower by a Lender or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Borrower to a Governmental Authority, such Borrower 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) Each Foreign Lender shall deliver to the Company (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Company (if any), or will comply with such other
requirements, if any, as is currently
32
applicable, as will permit payments under this Agreement to be made without
withholding or at a reduced rate; provided, however, that the Company shall have
furnished to each such Lender in a reasonably timely manner copies of such
documentation and notice of such requirements together with applicable
instructions; provided, further, that no such Lender shall have any obligation
to provide such documentation or comply with such requirements if it would
result in a material economic, legal or regulatory disadvantage to any such
Lender.
(f) If the Administrative Agent or a Lender 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 Borrower or with respect to which such
Borrower has paid additional amounts pursuant to this Section 2.14, it shall pay
over such refund to such Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by such Borrower under this Section 2.14 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that such Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
such Borrower or any other Person.
(g) Any Lender that is not a Lender as of the Restatement Effective
Date shall not be entitled to any greater payment under this Section 2.14 than
such Lender's assignor could have been entitled to absent such assignment except
to the extent that the entitlement to a greater payment resulted from a Change
in Law.
Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or of amounts payable under
Section 2.12, 2.13 or 2.14, or otherwise) prior to 12:00 noon, New York City
time, on the date when due, in immediately available funds, without set-off or
counterclaim in Dollars. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its
offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, except that payments
pursuant to Sections 2.12, 2.13, 2.14 and 11.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder,
33
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans, Unpaid Drawings or any fees payable pursuant to
Section 2.09 resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of such obligations then due and owed to such Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in such obligations of the respective Borrower or the
Company, as the case may be, owed to such Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than to any Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from the
relevant Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that such Borrower
will not make such payment, the Administrative Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such
event, if the relevant Borrower has not in fact made such payment, then each of
the Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender 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 Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.04(b) or 2.15(d), then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
Section 2.16. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.12 or Section 3.06, or if each
Borrower is required to pay
34
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.14 or Section 3.06, then such Lender
shall use reasonable efforts to designate a different lending office for funding
or booking its 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 2.12 or 2.14 or 3.06, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. Each
Specified Obligor hereby jointly and severally agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender (x) requests compensation under Section 2.12 or
Section 3.06, or if each Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.14 or Section 3.06, (y) becomes a Defaulting Lender or (z) becomes
a Non-Continuing Lender, then, in each case, the Company, at its sole expense
and effort, shall have the right, if no Default or Event of Default then exists,
to replace such Lender (the "Replaced Lender"), with one or more Person or
Persons, none of whom shall be a Defaulting Lender at the time of such
replacement (collectively, the "Replacement Lender") reasonably acceptable to
the Administrative Agent at which time the Replaced Lender shall assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 11.04), all its interests, rights and obligations under
this Agreement to the Replacement Lender; provided that (i) at the time of any
replacement pursuant to this Section 2.16, the Replacement Lender and the
Replaced Lender shall enter into one or more Assignment and Assumptions pursuant
to Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b)
to be paid by the Replacement Lender) pursuant to which the Replacement Lender
shall acquire all of the Commitments and outstanding Loans of the Replaced
Lender and, in connection therewith, shall pay to the Replaced Lender in respect
thereof an amount equal to the sum of (A) an amount equal to the principal
amount of, and all accrued but unpaid interest on, all outstanding Loans of the
Replaced Lender, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Lender, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced Lender pursuant to
Section 2.09; (ii) all obligations of each Borrower under the Credit Documents
owing to the Replaced Lender (other than those specifically described in clause
(i) above in respect of which the assignment purchase price has been, or is
concurrently being, paid), including without limitation all amounts owing to the
Replaced Lender under Section 2.13 as a result of the assignment of its Loans
under clause (i) above, shall be paid in full to such Replaced Lender
concurrently with such replacement; (iii) no assignment pursuant to this Section
2.16 shall be effective until all of the then outstanding Several Letters of
Credit are returned by each respective beneficiary to the Issuing Agent for
cancellation in exchange for new or amended Several Letters of Credit which give
effect to such assignment (it being understood that to the extent the respective
beneficiaries do not consent to such assignment, such assignment cannot occur);
(iv) the Company shall have received the prior written consent of the
Administrative Agent and each Fronting Lender, which consents shall not be
unreasonably withheld; (v) in the case of any such assignment resulting from a
claim for compensation under Section 2.12 or payments required to be made
pursuant to Section 2.14, such assignment will result in a reduction in such
compensation or payments; and (vi) no Lender shall be required to become a
Replaced Lender if, prior
35
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Company to require such assignment and delegation cease to apply.
Upon the execution of the respective Assignment and Assumption, the payment of
amounts referred to in clauses (i) and (ii) above and the return, cancellation
and exchange of each then outstanding Several Letter of Credit as provided above
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate note or notes executed by the Company, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification provisions
applicable to the Replaced Lender under this Agreement, which shall survive as
to such Replaced Lender.
Section 2.17. Designated Subsidiary Borrowers. The Company may from
time to time designate one or more Persons as an additional Designated
Subsidiary Borrower, subject to the following terms and conditions:
(a) each such Person shall be a Wholly Owned Subsidiary of the Company;
(b) each such Designated Subsidiary Borrower shall enter into an
appropriately completed DSB Assumption Agreement in the form of Exhibit C hereto
on or prior to the date of designation hereof;
(c) on or prior to the date of designation, the Administrative Agent
shall have received from such Person a certificate, signed by an Authorized
Officer of such Person in the form of Exhibit F with appropriate insertions or
deletions, together with (x) copies of its certificate of incorporation, by-laws
or other organizational documents and (y) the resolutions of the board of
directors (or similar governing body) of such Person relating to the Credit
Documents which shall be reasonably satisfactory to the Administrative Agent;
(d) on or prior to the date of designation, the Administrative Agent
shall have received an opinion, addressed to the Administrative Agent and each
of the Lenders and dated the date of designation, which opinion shall be in form
and substance reasonably satisfactory to the Administrative Agent, from counsel
to the respective Designated Subsidiary Borrower reasonably satisfactory to the
Administrative Agent, covering such of the matters set forth in the opinions of
counsel delivered to the Administrative Agent on the Restatement Effective Date
pursuant to Section 5.01(b)(iii), as may be reasonably requested by the
Administrative Agent, and such other matters incident to the transactions
contemplated thereby as the Administrative Agent may reasonably request;
(e) in the case of any Designated Subsidiary Borrower which is a
Regulated Insurance Company, the Administrative Agent and its counsel shall be
reasonably satisfied with all applicable laws and/or regulations of each
jurisdiction having legal or regulatory jurisdiction over such Designated
Subsidiary Borrower as such laws and/or regulations relate to the
enforceability, perfection or priority of the Liens created or purported to be
created under the Security Documents as between the Secured Creditors and any
Applicable Insurance Regulatory Agency or the policy holders with respect to
such Regulated Insurance Company; and
(f) no Designated Subsidiary Borrower may incur, or be liable for (by
assignment or otherwise), any Loan hereunder.
36
Section 2.18. Additional Commitments. (a) The Company shall have the
right, at any time and from time to time, after the Restatement Effective Date
and prior to the Commitment Expiration Date to request (so long as no Default or
Event of Default is then in existence or would result therefrom) on one or more
occasions that one or more existing Lenders (and/or one or more other Eligible
Persons which will become Lenders as provided pursuant to clause (vi) below)
provide Additional Commitments; it being understood and agreed, however, that
(i) no existing Lender shall be obligated to provide an Additional Commitment as
a result of any request by the Company, (ii) until such time, if any, as (x)
such existing Lender has agreed in its sole discretion to provide an Additional
Commitment and executed and delivered to the Administrative Agent an Additional
Commitment Agreement in respect thereof as provided in Section 2.18(b) and (y)
such other conditions set forth in Section 2.18(b) shall have been satisfied,
such existing Lender shall not be obligated to make Loans or issue, or
participate in, Letters of Credit, in excess of the amounts provided for herein,
immediately before giving effect to such Additional Commitments provided by such
existing Lender pursuant to this Section 2.18, (iii) any existing Lender may
provide an Additional Commitment without the consent of any other Lender, (iv)
(A) each provision of Additional Commitments on a given date pursuant to this
Section 2.18 shall be in a minimum aggregate amount (for all Additional
Commitment Lenders (including, in the circumstances contemplated by clause (vi)
below, Eligible Persons who will become Additional Commitment Lenders) of at
least $25,000,000 and (B) the aggregate amount of Additional Commitments
provided pursuant to this Section 2.18 shall not exceed $75,000,000, (v) all
up-front fees payable to any Additional Commitment Lender shall be as set forth
in the relevant Additional Commitment Agreement, (vi) if, on or after the tenth
Business Day following the request by the Company of the then existing Lenders
to provide Additional Commitments pursuant to this Section 2.18 on the terms to
be applicable thereto, the Company has not received Additional Commitments in an
aggregate amount equal to that amount of the Additional Commitments which the
Company desires to obtain pursuant to such request (as set forth in the request
provided by the Company to the Administrative Agent as provided above), then the
Company may request Additional Commitments from Eligible Persons which are
reasonably acceptable to the Administrative Agent and each Fronting Lender in an
aggregate amount equal to such deficiency on terms which are no more favorable
to such Eligible Person in any respect than the terms offered to the existing
Lenders, (vii) all Additional Commitments provided on a given date pursuant to
this Section 2.18 shall have the same terms and conditions as all then existing
Commitments and shall be added to such existing Commitments in accordance with
clause (b) of this Section 2.18 below and (viii) all actions taken by the
Borrower pursuant to this Section 2.18 shall be done in coordination with the
Administrative Agent.
(b) At the time of any provision of Additional Commitments pursuant to
this Section 2.18, (i) the Company, each Designated Subsidiary Borrower, the
Administrative Agent and each existing Lender or Eligible Person, as the case
may be, which agrees to provide an Additional Commitment (each, an "Additional
Commitment Lender") shall execute and deliver to the Administrative Agent an
Additional Commitment Agreement substantially in the form of Exhibit J, subject
to such modifications in form and substance reasonably satisfactory to the
Administrative Agent as may be necessary or appropriate (with the effectiveness
of such Additional Commitment Lender's Additional Commitment to occur upon
delivery of such Additional Commitment Agreement to the Administrative Agent,
the payment of any fees required in connection therewith and the satisfaction of
the other conditions set forth in this
37
Section 2.18 to the reasonable satisfaction of the Administrative Agent), (ii)
all Several Letters of Credit outstanding at such time shall have been returned
by each respective beneficiary thereunder to the respective Issuing Agent and
shall either have been cancelled and/or exchanged for new or amended Letters of
Credit which give effect to such Additional Commitments, and such Additional
Commitment Lenders), (iii) if such Additional Commitment Lender is not a United
States person (as such term is defined in Section 7701(a)(3) of the Code) for
U.S. Federal income tax purposes or would otherwise constitute a Foreign Lender,
such Additional Commitment Lender shall provide to the Company the appropriate
Internal Revenue Service documentation described in Section 2.14(e), (iv) the
Company and each Designated Subsidiary Borrower shall deliver to the
Administrative Agent resolutions authorizing the incurrence of the Obligations
to be incurred pursuant to each Additional Commitment, together with evidence of
good standing of the Company and each Designated Subsidiary Borrower and (v) the
Company and each Designated Subsidiary Borrower shall deliver to the
Administrative Agent an opinion, in form and substance reasonably satisfactory
to the Administrative Agent, from counsel to the Company and such Designated
Subsidiary Borrower reasonably satisfactory to the Administrative Agent and
dated such date, covering such matters similar to those set forth in the
opinions of counsel delivered to the Lenders on the Restatement Effective Date
pursuant to Section 5.01(e) and such other matters as the Administrative Agent
may reasonably request. The Administrative Agent shall promptly notify each
Lender as to the occurrence of each Additional Commitment Date, and (x) on each
such date, the Total Commitment under, and for all purposes of, this Agreement
and each other Credit Document shall be increased by the aggregate amount of
such Additional Commitments and (y) on each such date, Schedule 2.01 shall be
deemed modified to reflect the revised Commitments of each affected Lender.
Notwithstanding anything to the contrary contained in this Agreement, in
connection with any increase in the Total Commitment pursuant to this Section
2.18, the Company shall, in coordination with the Administrative Agent and the
Lenders repay outstanding Loans of certain Lenders and, if necessary, incur
additional Loans from other Lenders, in each case so that such Lenders
participate in each Borrowing of such Loans pro rata on the basis of their
Commitments (after giving effect to any increase thereof) (it being understood
and agreed that any breakage costs of the type described in Section 2.13
incurred by the Lenders in connection with the repayment of Loans contemplated
by this Section 2.18(c)(i) shall be for the account of the Company).
ARTICLE III
Letters of Credit
Section 3.01. Several Letters of Credit. (a) Subject to and upon the
terms and conditions set forth herein, each Borrower may request the Issuing
Agent at any time and from time to time on or after the Restatement Effective
Date and prior to the Commitment Expiration Date to issue, for the account of
such Borrower and in support of, on a standby basis, Letter of Credit
Supportable Obligations of such Borrower to any other Person and subject to and
upon the terms and conditions herein set forth the Issuing Agent agrees to issue
at any time and from time to time on or after the Restatement Effective Date and
prior to the Commitment Expiration Date one or more irrevocable standby letters
of credit in such form as may be approved by the Issuing Agent which approval
shall not be unreasonably withheld (each such letter of credit, a "Several
Letter of Credit" and, collectively, the "Several Letters of Credit").
38
(b) Each Several Letter of Credit will be issued by the Issuing Agent
on behalf of the Lenders and each Lender will participate in each Several Letter
of Credit pro rata in accordance with its Applicable Percentage. The obligations
of each Lender under and in respect of each Several Letter of Credit are
several, and the failure by any Lender to perform its obligations hereunder or
under any Letter of Credit shall not affect the obligations of the respective
Borrower toward any other party hereto nor shall any other such party be liable
for the failure by such Lender to perform its obligations hereunder or under any
Several Letter of Credit.
(c) Each Several Letter of Credit shall be executed and delivered by
the Issuing Agent in the name and on behalf of, and as attorney-in-fact for,
each Lender and the Issuing Agent shall act under each Several Letter of Credit,
and each Several Letter of Credit shall expressly provide that the Issuing Agent
shall act, as the agent of each Lender to (a) receive drafts, other demands for
payment and other documents presented by the beneficiary under such Several
Letter of Credit, (b) determine whether such drafts, demands and documents are
in compliance with the terms and conditions of such Letter of Credit and (c)
notify such Lender and such Borrower that a valid drawing has been made and the
date that the related Several Unpaid Drawing is to be made; provided that the
Issuing Agent shall have no obligation or liability for any Several Unpaid
Drawing under such Letter of Credit, and each Several Letter of Credit shall
expressly so provide. Each Lender hereby irrevocably appoints and designates the
Issuing Agent as its attorney-in-fact, acting through any duly authorized
officer of JPMorgan Chase Bank, to execute and deliver in the name and on behalf
of such Lender each Several Letter of Credit to be issued by such Lender
hereunder. Promptly upon the request of the Issuing Agent, each Lender will
furnish to the Issuing Agent such powers of attorney or other evidence as any
beneficiary of any Several Letter of Credit may reasonably request in order to
demonstrate that the Issuing Agent has the power to act as attorney-in-fact for
such Lender to execute and deliver such Several Letter of Credit.
(d) Each Lender represents and warrants that each Several Letter of
Credit constitutes a legal, valid and binding obligation of such Lender
enforceable in accordance with its terms, provided that the enforceability
thereof is subject to general principles of equity and to bankruptcy, insolvency
and similar laws affecting the enforcement of creditors' rights generally.
Section 3.02. Fronted Letters of Credit. (a) Subject to and upon the
terms and conditions set forth herein, each Borrower may request that any
Fronting Lender at any time and from time to time on or after the Restatement
Effective Date and prior to the Commitment Expiration Date issue for its own
account a letter of credit for the account of such Borrower and in support of,
on a standby basis, Letter of Credit Supportable Obligations of such Borrower to
any other Person and subject to and upon the terms and conditions herein set
forth each Fronting Lender agrees to issue at any time and from time to time on
or after the Restatement Effective Date and prior to the Commitment Expiration
Date one or more irrevocable standby letters of credit in such form as may be
approved by such Fronting Lender, which approval shall not be unreasonably
withheld (each such letter of credit, a "Fronted Letter of Credit" and,
collectively, the "Fronted Letters of Credit").
(b) Immediately upon the issuance by any Fronting Lender of any Fronted
Letter of Credit, such Fronting Lender shall be deemed to have sold and
transferred to each Lender other than such Fronting Lender (each such Lender, in
its capacity under this Section
39
3.02(b), a "Fronting Participant"), and each such Fronting Participant shall be
deemed irrevocably and unconditionally to have purchased and received from such
Fronting Lender, without recourse or warranty, an undivided interest and
participation, to the extent of such Fronting Participant's Applicable
Percentage, in such Fronted Letter of Credit, each drawing made thereunder and
the obligations of each Borrower under this Agreement with respect thereto, and
any security therefor or guaranty pertaining thereto. Upon any change in the
Commitments or Applicable Percentages of the Lenders pursuant to this Agreement
(including, without limitation, pursuant to Section 2.18), it is hereby agreed
that, with respect to all outstanding Fronted Letters of Credit and Fronted
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 3.02 to reflect the new Applicable Percentages of the
assignor and assignee Lender or of all Lenders with Commitments, as the case may
be.
(c) In the event that any Fronting Lender makes any payment under any
Fronted Letter of Credit and the respective Borrower shall not have reimbursed
such amount in full to such Fronting Lender pursuant to Section 3.05, such
Fronting Lender shall promptly notify the Administrative Agent, which shall
promptly notify each Fronting Participant, of such failure, and each Fronting
Participant shall promptly and unconditionally pay to such Fronting Lender the
amount of such Fronting Participant's Applicable Percentage of such unreimbursed
payment in Dollars and in immediately available funds. If, prior to 11:00 a.m.
(New York time) on any Business Day, the Administrative Agent so notifies any
Fronting Participant required to fund a payment under a Fronted Letter of
Credit, such Fronting Participant shall make available to such Fronting Lender
in Dollars and in immediately available funds such Fronting Participant's
Applicable Percentage of the amount of such payment on such Business Day (or, if
notice is given after 11:00 a.m. (New York time) on any Business Day, on the
next Business Day). If and to the extent such Fronting Participant shall not
have so made its Applicable Percentage of the amount of such payment available
to such Fronting Lender, such Fronting Participant agrees to pay to such
Fronting Lender, forthwith on demand such amount, together with interest
thereon, for each day from such date to but excluding the date such amount is
paid to such Fronting Lender at the overnight Federal Funds Rate. The failure of
any Fronting Participant to make available to such Fronting Lender its
Applicable Percentage of any payment under any Fronted Letter of Credit shall
not relieve any other Fronting Participant of its obligation hereunder to make
available to such Fronting Lender its Applicable Percentage of any payment on
the date required, as specified above, but no Fronting Participant shall be
responsible for the failure of any other Fronting Participant to make available
to such Fronting Lender such other Fronting Participant's Applicable Percentage
of any such payment.
(d) Whenever any Fronting Lender receives any payment by any Borrower
as to which it has also received payments from the Fronting Participants
pursuant to paragraph (d) above, such Fronting Lender shall forward such payment
to the Administrative Agent, which in turn shall distribute to each Fronting
Participant which has paid its Applicable Percentage thereof, in Dollars and in
immediately available funds, an amount equal to such Fronting Participant's
share (based upon the amount funded by such Fronting Participant to the
aggregate amount funded by all Fronting Participants and retained by the
Fronting Lender) of the principal amount of such payment and interest thereon
accruing after the purchase of the respective participations.
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(e) The obligations of the Fronting Participants to make payments to
each Fronting Lender with respect to Fronted Letters of Credit issued by it
shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents or any amendment, supplement or modification to
any of the foregoing;
(ii) the existence of any claim, setoff, defense or other right which
the Fronting Participant or any of its Affiliates may have at any time
against a beneficiary named in a Fronted Letter of Credit, any transferee
of any Fronted Letter of Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, any Fronting Lender, any Fronting
Participant, any Lender, or any other Person, whether in connection with
this Agreement, any Fronted Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transaction
between any Borrower or any of its Affiliates and the beneficiary named in
any such Fronted Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Fronted 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;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default; or
(vi) any matter or event set forth in subsection 3.05(b).
(f) Upon the request of any Fronting Participant, each Fronting Lender
shall furnish to such Fronting Participant copies of any Fronted Letter of
Credit issued by it and such other documentation as may reasonably be requested
by such Fronting Participant.
Section 3.03. Conditions to the Issuance of all Letters of Credit. (a)
Notwithstanding anything to the contrary set forth in this Article III, no LC
Issuer shall be under any obligation to issue any Letter of Credit if at the
time of such issuance:
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such LC Issuer
from issuing such Letter of Credit or any requirement of law applicable to
such LC Issuer or any Lender or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction
over such LC Issuer or any Lender shall prohibit, or request that such LC
Issuer or any Lenders refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such
LC Issuer or any Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such LC Issuer is
not otherwise compensated) not in effect on the Restatement
41
Effective Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such LC Issuer as of the Restatement
Effective Date;
(ii) the conditions precedent set forth in Section 5.02 are not
satisfied at that time; or
(iii) such LC Issuer shall have received notice from any Borrower or
the Required Lenders prior to the issuance of such Letter of Credit of the
type described in clause (v) of Section 3.03(b).
(b) Notwithstanding anything to the contrary set forth in this Article
III;
(i) no Letter of Credit shall be issued at any time when the Revolving
Credit Exposure exceeds (or would after giving effect to such issuance
exceed) the Total Commitment at such time;
(ii) no Letter of Credit shall be issued for the account of any
Borrower at any time when the Revolving Credit Exposure attributable to
such Borrower exceeds (or would after giving effect to such issuance
exceed) the Borrowing Base of such Borrower at such time;
(iii) no Fronted Letter of Credit shall be issued at any time if after
giving effect thereto the Letter of Credit Outstandings in respect of all
Fronted Letters of Credit would exceed $25,000,000;
(iv) each Letter of Credit shall have an expiry date occurring not
later than one year after such Letter of Credit's date of issuance,
provided that each such Letter of Credit may by its terms automatically
renew annually for one additional year unless the respective LC Issuer
notifies the beneficiary thereof, in accordance with the terms of such
Letter of Credit, that such Letter of Credit will not be renewed; and
(v) no LC Issuer will issue any Letter of Credit after it has received
written notice from any Borrower or the Required Lenders stating that a
Default or an Event of Default exists until such time as the Issuing Agent
shall have received a written notice of (x) rescission of such notice from
the party or parties originally delivering the same or (y) a waiver of such
Default or Event of Default by the Required Lenders.
(c) Subject to and on the terms and conditions set forth herein, each
LC Issuer is hereby authorized by each Borrower and the Lenders to arrange for
the issuance of any Letter of Credit pursuant to Section 3.01(a) or (b) and the
amendment of any Letter of Credit pursuant to Section 3.08 and/or 11.02 by:
(i) completing the commencement date and the expiry date of such Letter
of Credit;
(ii) (in the case of an amendment increasing or reducing the amount
thereof) amending such Letter of Credit in such manner as such LC Issuer
and the respective beneficiary may agree;
42
(iii) in the case of Several Letters of Credit, completing such Letter
of Credit with the participation of each Lender as allocated pursuant to
the terms hereof; and
(iv) in the case of Several Letters of Credit, executing such Letter of
Credit on behalf of each Lender and following such execution delivering
such Letter of Credit to the beneficiary of such Letter of Credit.
Section 3.04. Letter of Credit Requests. (a) Whenever a Borrower
desires that a Letter of Credit be issued for its account, such Borrower shall
give the Administrative Agent and the respective LC Issuer written notice
(including by way of facsimile transmission, immediately confirmed in writing by
submission of the original of such request by mail to the Issuing Agent) thereof
prior to 12:00 Noon (New York time) at least (x) three Business Days in respect
of Fronted Letters of Credit and (y) five Business Days in respect of Several
Letters of Credit, in each case, prior to the proposed date of issuance (which
shall be a Business Day), which written notice shall be in the form of Exhibit G
(each, a "Letter of Credit Request"). Each Letter of Credit Request shall
include any other documents as the respective LC Issuer customarily requires in
connection therewith.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the respective Borrower and the Company that such
Letter of Credit may be issued in accordance with, and it will not violate the
requirements applicable to such Borrower and/or such Letter of Credit of,
Section 3.01 or 3.02, as the case may be, and Section 3.03.
(c) Upon its issuance of, or amendment to, any Letter of Credit, the
respective LC Issuer shall promptly notify the respective Borrower and each
Lender of such issuance or amendment, which notice shall include a summary
description of the Letter of Credit actually issued and any amendments thereto.
(d) The Stated Amount of each Letter of Credit upon issuance shall be
not less than $25,000.
Section 3.05. Agreement to Repay Letter of Credit Drawings. (a) Each
Borrower severally agrees to reimburse (x) each Lender, by making payment to the
Administrative Agent in immediately available funds, for any payment or
disbursement made by such Lender under any Several Letter of Credit issued for
its account (each such amount so paid or disbursed until reimbursed, a "Several
Unpaid Drawing") and (y) the respective Fronting Lender directly for any payment
or disbursement made by such Fronting Lender under any Fronted Letter of Credit
issued for its account (each such amount so paid or disbursed until reimbursed,
a "Fronted Unpaid Drawing"), in each case, no later than one Business Day
following the date of such payment or disbursement, with interest on the amount
so paid or disbursed by such Lender, to the extent not reimbursed prior to 1:00
p.m. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such Lender
is reimbursed therefor at a rate per annum which shall be the Alternate Base
Rate as in effect from time to time (plus an additional 2% per annum, payable on
demand, if not reimbursed by the third Business Day after the date on which the
respective Borrower receives notice from the respective LC Issuer of such
payment or disbursement).
43
(b) Each Borrower's obligation under this Section 3.05 to reimburse
each Lender with respect to Unpaid Drawings of such Borrower (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which such Borrower may have or have had against such Lender, or any LC Issuer,
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing; provided, however, that no Borrower shall be obligated to reimburse any
Lender for any wrongful payment made by such Lender under a Letter of Credit as
a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Lender (as determined by a court of competent
jurisdiction in a final and non-appealable decision).
(c) In determining whether to pay under any Letter of Credit, no LC
Issuer shall have any obligation relative to the other Lenders other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any LC Issuer under or in connection with any Letter of
Credit, if taken or omitted in the absence of such LC Issuer's gross negligence
or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision), shall not create for such LC Issuer any
resulting liability to any Borrower or any of its Affiliates or any Lender.
Section 3.06. Increased Costs. If after the Original Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation, order,
guideline or request or any change therein after the Original Effective Date, or
any change adopted or effective after the Original Effective Date in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) by any such authority, central bank or comparable
agency shall either (i) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against letters of credit issued by or
participated in by such Lender, or (ii) impose on such Lender any other
conditions directly or indirectly affecting this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to such
Lender of issuing, maintaining or participating in any Letter of Credit, or to
reduce the amount of any sum received or receivable by such Lender hereunder or
reduce the rate of return on its capital with respect to Letters of Credit,
then, upon written demand to the applicable Borrower by such Lender (with a copy
to the Administrative Agent), such Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction. The preceding sentence shall not apply to increased costs
with respect to taxes imposed on or measured by the net income or net profits of
a Lender pursuant to the laws of the jurisdiction in which it is organized or
the jurisdiction in which the principal office or applicable lending office of
such Lender is located or any subdivision thereof or therein or with respect to
Taxes to the extent that a Lender received additional amounts (or otherwise was
indemnified) for such Taxes pursuant to Section 2.14 (or would have received
additional amounts pursuant to Section 2.14(e) but for a failure to comply with
Section 2.14(e)). A certificate submitted to the applicable Borrower by such
Lender (with a copy to the Administrative Agent), setting forth (i) the basis
for the determination of such additional amount or amounts necessary to
compensate such Lender as
44
aforesaid and (ii) the basis, in reasonable detail, for the computation of such
amount or amounts, which shall be consistently applied shall be final and
conclusive and binding on the applicable Borrower absent manifest error,
although the failure to deliver any such certificate shall not release or
diminish such Borrower's obligations to pay additional amounts pursuant to this
Section 3.06 upon subsequent receipt of such certificate.
Section 3.07. Letter of Credit Expiration Extensions. Each Lender
acknowledges that to the extent provided under the terms of any Letter of
Credit, the expiration date of such Letter of Credit will be automatically
extended for an additional year, without written amendment, unless at least 30
days (or such other period required under or by any Legal Requirement or
Applicable Insurance Regulatory Authority) prior to the expiration date of such
Letter of Credit, notice is given by the respective LC Issuer in accordance with
the terms of the respective Letter of Credit (a "Notice of Non-Extension") that
the expiration date of such Letter of Credit will not be extended beyond its
current expiration date. The respective LC Issuer will give Notices of
Non-Extension as to any or all outstanding Letters of Credit if requested to do
so by the Required Lenders pursuant to Article VIII. The respective LC Issuer
will give Notices of Non-Extension as to all outstanding Letters of Credit if
the Commitment Expiration Date has occurred. Notwithstanding anything to the
contrary contained in this Section 3.07, no LC Issuer shall give a Notice of
Non-Extension except as provided in the immediately preceding two sentences. The
respective LC Issuer will send a copy of each Notice of Non-Extension to the
respective Borrower concurrently with delivery thereof to the respective
beneficiary, unless prohibited by law from doing so.
Section 3.08. Changes to Stated Amount. At any time when any Letter of
Credit is outstanding, at the request of the respective Borrower, the Issuing
Agent will enter into an amendment increasing or reducing the Stated Amount of
such Letter of Credit, provided that (i) in no event shall the Stated Amount of
such Letter of Credit be increased to an amount which would cause (x) the
Revolving Credit Exposure to exceed the Total Commitment at such time, (y) the
Revolving Credit Exposure attributable to such Borrower to exceed the Borrowing
Base of such Borrower at such time or (z) the Letter of Credit Outstandings in
respect of Fronted Letters of Credit to exceed $25,000,000, (ii) the Stated
Amount of a Letter of Credit may not be increased at any time if the conditions
precedent set forth in Section 5.02 are not satisfied at such time, and (iii)
the Stated Amount of a Letter of Credit may not be increased at any time after
the Commitment Expiration Date.
Section 3.09. Existing Fronted Letters of Credit. It is hereby agreed
and acknowledged that all Fronted Letters of Credit described on Schedule 3.09
(the "Existing Fronted Letters of Credit") which were issued under the Existing
Credit Agreement and which remain outstanding on the Restatement Effective Date
shall be deemed issued under this Agreement as a "Fronted Letter of Credit" on
the Restatement Effective Date.
Section 3.10. Existing Several Letters of Credit. (a) It is hereby
agreed and acknowledged that all Several Letters of Credit described on Schedule
3.10 (the "Existing Several Letters of Credit") which were issued and which
remain outstanding on the Restatement Effective Date shall be deemed issued
under this Agreement as a "Several Letter of Credit" on the Restatement
Effective Date. As soon as commercially reasonably possible following the
Restatement Effective Date, each Existing Several Letter of Credit shall be
amended to replace
45
each Existing Lender with each Lender party to this Agreement at the time of
such amendment in accordance with each such Lender's Applicable Percentage.
Until an Existing Several Letter of Credit has been amended in accordance with
this Section 3.10, each Existing Lender shall be deemed to have sold and
transferred to each Lender, and each such Lender shall be deemed irrevocably and
unconditionally to have purchased and received from such Existing Lender,
without recourse or warranty, an undivided interest and participation, to the
extent of such Lender's Applicable Percentage, in such Existing Several Letter
of Credit, each substitute Existing Several Letter of Credit, each drawing made
thereunder, the obligations of any Borrower under this Agreement with respect
thereto and any security therefore or guaranty pertaining thereto. Upon any
change in the Commitments of the Lenders pursuant to Section 2.18 or 11.04(b),
it is hereby agreed that, with respect to all outstanding Existing Several
Letters of Credit and Unpaid Drawings with respect thereto, there shall be an
automatic adjustment to the participations pursuant to this Section 3.10 to
reflect the new Applicable Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Existing Several Letter of
Credit, no Existing Lender shall have any obligation relative to the Lenders
other than to determine that any documents required to be delivered under such
Existing Several Letter of Credit have been delivered and that they appear to
substantially comply on their face with the requirements of such Existing
Several Letter of Credit, which obligation, it is understood, is being performed
by the Issuing Agent, and upon whom each Existing Lenders shall be entitled to
rely. Any action taken or omitted to be taken by any Existing Lender under or in
connection with any Existing Several Letter of Credit issued by it shall not
create for such Existing Lender any resulting liability to any Borrower, any
Lender or any other Person unless such action is taken or omitted to be taken
with gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision).
(c) In the event that any Existing Lender makes any payment under any
Existing Several Letter of Credit issued by it and the respective Borrower shall
not have reimbursed such amount in full to each Existing Lender pursuant to
Section 3.05, such Existing Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify each Lender of such
failure, and each such Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Existing Lender, the amount of such
Lender's Applicable Percentage of such payment in U.S. Dollars and in same day
funds. If the Administrative Agent so notifies any Lender required to fund a
payment under an Existing Several Letter of Credit prior to 11:00 A.M. (New York
time) on any Business Day, such Lender shall make available to the
Administrative Agent at the Payment Office for the account of the respective
Existing Lender such Lender's Applicable Percentage of the amount of such
payment on such Business Day in same day funds (and, to the extent such notice
is given after 11:00 A.M. (New York time) on any Business Day, such Lender shall
make such payment on the immediately following Business Day). If and to the
extent such Lender shall not have so made its Applicable Percentage of the
amount of such payment available to the Administrative Agent for the account of
the respective Existing Lender, such Lender agrees to pay to the Administrative
Agent for the account of such Existing Lender, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of the Existing
Lender at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Loans that are maintained
46
as Base Rate Loans for each day thereafter. The failure of any Lender to make
available to the Administrative Agent for the account of the respective Existing
Lender its Applicable Percentage of any payment under any Existing Several
Letter of Credit issued by it shall not relieve any other Lender of its
obligation hereunder to make available to the Administrative Agent for the
account of such Existing Lender its Applicable Percentage of any payment under
any such Several Letter of Credit on the date required, as specified above, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of such Existing Lender
such other Lender's Applicable Percentage of any such payment.
(d) Whenever any Existing Lender receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Existing Lender any payments from the Lenders pursuant to clause (c) above,
such Existing Lender shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender which has paid its
Applicable Percentage thereof same day funds, an amount equal to such Lender's
Applicable Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of the Lenders to make payments to the
Administrative Agent for the account of the respective Existing Lender with
respect to Existing Several Letters of Credit issued by it shall be irrevocable
and not subject to counterclaim, set-off or other defense or any other
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right which
the Company or any of its Subsidiaries may have at any time against a
beneficiary named in an Existing Several Letter of Credit, any transferee
of any Existing Several Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any Existing Lender,
or other Person, whether in connection with this Agreement, any Existing
Several Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Company or any of its Subsidiaries and the beneficiary named in any such
Existing Several Letter of Credit);
(iii) any draft, certificate or other document presented under the
Existing Several 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;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
47
ARTICLE IV
Representations and Warranties
Each of the Company and each Designated Subsidiary Borrower, in each
case, on behalf of itself and its Subsidiaries represents and warrants to the
Lenders that:
Section 4.01. Corporate Status. Each of the Company and each of its
Subsidiaries (i) is a duly organized and validly existing corporation or
business trust or other entity in good standing under the laws of the
jurisdiction of its organization and has the corporate or other organizational
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage, and (ii) has been duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except, in the case of
this clause (ii), where the failure to be so qualified, authorized or in good
standing could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
Section 4.02. Corporate Power and Authority. Each Borrower has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of such Credit Documents. Each Borrower has duly executed and delivered each
Credit Document to which it is a party and each such Credit Document constitutes
the legal, valid and binding obligation of such Borrower enforceable against
such Borrower in accordance with its terms, except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally and general
principles of equity regardless of whether enforcement is sought in a proceeding
in equity or at law.
Section 4.03. No Contravention of Laws, Agreements or Organizational
Documents. Neither the execution, delivery and performance by any Borrower of
this Agreement or the other Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein, (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsistent
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (other than Liens
in favor the Administrative Agent and the Lenders pursuant to the Security
Documents) upon any of the property or assets of the Company or any of its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement, credit agreement or any other material instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject or (iii) will violate
any provision of the certificate of incorporation, by-laws or other
organizational documents of the Company or any of its Subsidiaries.
Section 4.04. Litigation and Contingent Liabilities. There are no
actions, suits or proceedings pending or threatened in writing involving the
Company or any of its Subsidiaries (including, without limitation, with respect
to this Agreement or any other Credit Document) that
48
have had, or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
Section 4.05. Use of Proceeds; Margin Regulations. (a) All proceeds of
the Loans shall be utilized for the general corporate and working capital
purposes of the Company and its Subsidiaries.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation T, U or X and no part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
Section 4.06. Approvals. Any order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, which is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document, has been obtained and is in full force and effect.
Section 4.07. Investment Company Act. No Borrower is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
Section 4.08. Public Utility Holding Company Act. No Borrower is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 4.09. True and Complete Disclosure; Projections and
Assumptions. All factual information (taken as a whole) heretofore or
contemporaneously furnished by the Company or any of its Subsidiaries to the
Administrative Agent or any Lender in writing (including, without limitation,
all information contained in the Credit Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is, and
all other factual information (taken as a whole with all other such information
theretofore or contemporaneously furnished) hereafter furnished by any such
Persons in writing to the Administrative Agent will be, true and accurate in all
material respects on the date as of which such information is dated and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole with all other such information theretofore or
contemporaneously furnished and all filings by the Company with the Securities
and Exchange Commission) not misleading at such time in light of the
circumstances under which such information was provided; provided that, with
respect to projections the Company represents only that the projections
contained in such materials are based on good faith estimates and assumptions
believed by the Company to be reasonable and attainable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and are subject to significant uncertainties and
contingencies many of which are beyond the Company's control and that actual
results during the period or periods covered by any such projections may differ
from the projected results.
49
Section 4.10. Financial Condition; Financial Statements. (a) The
audited consolidated balance sheet of the Company for the fiscal year ended
December 31, 2004 and the related consolidated statements of income,
shareholders' equity and cash flows, reported on by PricewaterhouseCoopers LLP,
copies of which have been delivered to each of the Lenders, and the unaudited
consolidated balance sheet of the Company for its fiscal quarter ended March 31,
2005 and the related consolidated statements of income, shareholders' equity and
cash flows, copies of which have been delivered to each of the Lenders, fairly
present in all material respects, in each case in conformity with GAAP,
consistently applied, the consolidated financial position of the Company and its
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated (subject, in the case of the aforementioned
quarterly financial statement to normal year-end audit adjustments and the
absence of full footnote disclosure).
(b) Since December 31, 2004, nothing has occurred which has had, or
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(c) Except (i) for the Loans, (ii) as set forth in the unaudited
consolidated balance sheet (including the footnote disclosures thereto) of the
Company for its fiscal quarter ended March 31, 2005 and (iii) liabilities
incurred in the ordinary course of business after March 31, 2005, on the
Restatement Effective Date there are no material liabilities of the Company and
its Subsidiaries.
(d) On and as of the Restatement Effective Date, on a pro forma basis
after giving effect to the Transaction, (i) the fair valuation of all of the
assets of (x) each Borrower (on an individual basis) and (y) the Company and its
Subsidiaries taken as a whole will, in each case, exceed its debts, (ii) no
Borrower will have incurred or intended to incur debts beyond its ability to pay
such debts as such debts mature and (iii) no Borrower will have unreasonably
small capital with which to conduct its business as conducted on the Restatement
Effective Date. For purposes of this Section 4.10, "debt" means any liability on
a claim, and "claim" means any (i) right to payment whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
Section 4.11. Tax Returns and Payments. The Company and its
Subsidiaries (i) have timely filed or caused to be timely filed with the
appropriate taxing authority (taking into account any applicable extension
within which to file) all material income and other material tax returns
(including any statements, forms and reports), domestic and foreign, required to
be filed by the Company and its Subsidiaries, and (ii) have timely paid or
caused to have timely paid all material taxes payable by them which have become
due and assessments which have become due, except for those contested in good
faith and adequately disclosed and for which adequate reserves have been
established in accordance with GAAP. There is no action, suit, proceeding,
investigation, audit or claim now pending or, to the best knowledge of the
Company and its Subsidiaries, proposed or threatened by any authority regarding
any income taxes or any other taxes relating to the Company or any of its
Subsidiaries, which could individually or in the
50
aggregate reasonably be expected to have a Material Adverse Effect. As of the
Restatement Effective Date, neither the Company nor any of its Subsidiaries has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of taxes of the Company or any of its Subsidiaries. No tax Liens have
been filed and no claims are pending or, to the best knowledge of the Company or
any of its Subsidiaries, proposed or threatened with respect to any taxes, fees
or other charges for any taxable period, except for Liens permitted under
Section 7.03 and claims which could not reasonably be expected to have a
Material Adverse Effect.
Section 4.12. Compliance with ERISA. (a) Except as could not reasonably
be expected to result, individually or in the aggregate, in a Material Adverse
Effect, the Company and its Subsidiaries and ERISA Affiliates (i) have fulfilled
their respective obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance with the applicable
provisions of ERISA and the Code, and (ii) have not incurred any liability to
the PBGC or any Plan or Multiemployer Plan (other than to make contributions in
the ordinary course of business).
(b) Except as could not reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect, (i) each Foreign Pension Plan
has been maintained in compliance with its terms and with the requirements of
any and all applicable laws, statutes, rules, regulations and orders and has
been maintained, where required, in good standing with applicable regulatory
authorities, (ii) all contributions required to be made with respect to a
Foreign Pension Plan have been timely made, (iii) neither the Company nor any of
its Subsidiaries has incurred any obligation in connection with the termination
of, or withdrawal from, any Foreign Pension Plan and (iv) the present value of
the accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan that is required to be funded, determined as of the end of the
Company's most recently ended fiscal year on the basis of actuarial assumptions,
each of which is reasonable, did not exceed the current value of the assets of
such Foreign Pension Plan allocable to such benefit liabilities.
Section 4.13. Subsidiaries. (a) Set forth on Schedule 4.13(a) is a
complete and correct list of all of the Subsidiaries of the Company as of the
Restatement Effective Date, together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding direct
ownership interests in such Subsidiary and (iii) the percentage ownership of
such Subsidiary represented by such ownership interests. Except as disclosed on
Schedule 4.13, as of the Restatement Effective Date, each of the Company and its
Subsidiaries owns, free and clear of Liens, and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be held by it
on Schedule 4.13.
(b) As of the Restatement Effective Date, there are no restrictions on
the Company or any of its Subsidiaries which prohibit or otherwise restrict the
transfer of cash or other assets from any Subsidiary of the Company to the
Company, other than (i) prohibitions or restrictions existing under or by reason
of this Agreement or the other Credit Documents, (ii) prohibitions or
restrictions existing under or by reason of Legal Requirements, (iii)
prohibitions and restrictions permitted by Section 7.11 and (iv) other
prohibitions or restrictions which, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
51
Section 4.14. Capitalization. As of the Restatement Effective Date, the
authorized capital stock of the Company consists of (i) 200,000,000 common
shares, $.01 par value per share, 56,810,020 of which shares are issued and
outstanding and, (ii) 25,000,000 preference shares, $.01 par value per share,
none of which are issued and outstanding. As of the Restatement Effective Date,
none of the Company's Subsidiaries has outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock
except for options, warrants and grants outstanding in the aggregate amounts set
forth on Schedule 4.14.
Section 4.15. Indebtedness. The Company and its Subsidiaries do not
have any Indebtedness on the Restatement Effective Date other than (i) the
Loans, and (ii) the Indebtedness listed on Schedule 4.15.
Section 4.16. Compliance with Statutes, etc. The Company and each of
its Subsidiaries is in compliance with all applicable statutes, regulations,
rules and orders of, and all applicable restrictions imposed by, and has filed
or otherwise provided all material reports, data, registrations, filings,
applications and other information required to be filed with or otherwise
provided to, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including compliance
with all applicable environmental laws), except where the failure to comply or
file or otherwise provide could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. All required
regulatory approvals are in full force and effect on the date hereof, except
where the failure of such approvals to be in full force and effect could not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
Section 4.17. Insurance Licenses. Schedule 4.17 lists with respect to
each Regulated Insurance Company, as of the Restatement Effective Date, all of
the jurisdictions in which such Regulated Insurance Company holds licenses
(including, without limitation, licenses or certificates of authority from
Applicable Insurance Regulatory Authorities), permits or authorizations to
transact insurance and reinsurance business (collectively, the "Insurance
Licenses"), and indicates the type or types of insurance in which each such
Regulated Insurance Company is permitted to be engaged with respect to each
Insurance License therein listed. There is (i) no such Insurance License that is
the subject of a proceeding for suspension, revocation or limitation or any
similar proceedings, (ii) no sustainable basis for such a suspension, revocation
or limitation, and (iii) no such suspension, revocation or limitation threatened
by any Applicable Insurance Regulatory Authority, that, in each instance under
(i), (ii) and (iii) above, has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. As of the
Restatement Effective Date, no Regulated Insurance Company transacts any
insurance business, directly or indirectly, in any jurisdiction other than those
listed on Schedule 4.17, where such business requires any Insurance License of
an Applicable Insurance Regulatory Authority or such jurisdiction.
Section 4.18. Insurance Business. All insurance policies issued by any
Regulated Insurance Company are, to the extent required under applicable law, on
forms approved by the insurance regulatory authorities of the jurisdiction where
issued or have been filed with and not
52
objected to by such authorities within the period provided for objection, except
for those forms with respect to which a failure to obtain such approval or make
such a filing without it being objected to, could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
Section 4.19. Security Documents. The Security Documents create, as
security for the obligations hereunder of the Company and each Designated
Subsidiary Borrower, valid and enforceable security interests in and Liens on
all of the Collateral, superior to and prior to the rights of all third persons
and subject to no other Liens. No filings or recordings are required in order to
ensure the enforceability, perfection or priority of the security interests
created under the Security Documents, except for filings or recordings which
shall have been previously made.
Section 4.20. Properties; Liens. (a) The Company and its Subsidiaries
have good title to, or valid leasehold interests in, all real and personal
property material to their respective businesses. There exists no Lien
(including any Lien arising out of any attachment, judgment or execution), nor
any segregation or other preferential arrangement of any kind, on, in or with
respect to any of the property of the Company or any of its Subsidiaries, in
each case except as expressly permitted by Section 7.03.
(b) The Company and its Subsidiaries own, or are licensed to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to their respective business, and the use thereof by the Company or
such Subsidiary does not infringe upon the rights of any other Person, except
for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
Section 4.21. Solvency. On the Restatement Effective Date and upon the
occurrence of each Credit Event, both before and after giving effect thereto,
(i) each Borrower, taken individually, (ii) the Company and its Subsidiaries,
taken as a whole and (iii) each Borrower and its respective Subsidiaries, taken
as a whole, are, in each case, Solvent.
Section 4.22. Certain Insurance Regulations, Orders, Consents, Etc.
Without limiting the generality of Sections 4.03, 4.06, 4.16 or any other
provision contained in this Agreement, immediately after giving effect to the
pledging of any asset under any Security Document, each Credit Event (and the
satisfaction of all Borrowing Base requirements in connection therewith) and
each Collateral Transfer (as defined in the Security Agreement), each Borrower
will be in compliance with the applicable provisions of any insurance law,
statute, rule, regulation or order of any governmental agency, public body or
authority, or any subdivision thereof, regulating the activities of such
Borrower with respect to any limitations on Liens granted on any Collateral (as
defined in the Security Agreement) by such Borrower to the Collateral Agent (or
purported to be granted pursuant to any Security Document) including without
limitation, IC 27-1-23-4 of the Indiana Insurance Law, Section 1411(c) of the
New York Insurance Law and Section 10-3-801 and Regulation 3-4-1 of the Colorado
Insurance Company Holdings Act (as applicable) to the extent such Borrower is
subject thereto and any other similar law, regulation, order or statute of any
other jurisdiction to which such Borrower is subject; provided that such failure
to comply could adversely affect the validity, perfection or priority of any
such Lien or the rights or remedies of the Lenders or the ability of such
Borrower to perform its obligations to the Lenders under this Agreement or any
other Credit Document.
53
ARTICLE V
Conditions
Section 5.01. Restatement Effective Date. The obligations of the
Lenders to make Loans and the obligation of each LC Issuer to issue Letters of
Credit shall not become effective until the date (the "Restatement Effective
Date") on which each of the following conditions is satisfied (or waived in
accordance with Section 11.02):
(a) On or prior to the Restatement Effective Date, (i) each of the
Company, each Designated Subsidiary Borrower listed on Schedule 2.17, the
Administrative Agent and each of the Lenders shall have signed a copy
hereof (whether the same or different copies) and shall have delivered the
same to the Administrative Agent in accordance with Section 11.01(a) or, in
the case of the Lenders, shall have given to the Administrative Agent
telephonic (confirmed in writing), written or facsimile transmission notice
(actually received) in accordance with Section 11.01(a) that the same has
been signed and mailed to the Administrative Agent; and (ii) there shall
have been delivered to the Administrative Agent for the account of each
Lender that has requested the same pursuant to Section 2.07(e) the
appropriate promissory note or promissory notes, executed by the Company,
in each case, in the amount, maturity and as otherwise provided herein.
(b) On the Restatement Effective Date, the Administrative Agent shall
have received (i) an opinion, in form and substance reasonably satisfactory
to the Administrative Agent, addressed to the Administrative Agent and each
of the Lenders and dated the Restatement Effective Date, from Xxxxx &
XxXxxxxx LLP, special New York counsel to the Borrowers, which opinion
shall cover the matters contained in Exhibit H-1 hereto, (ii) an opinion,
in form and substance reasonably satisfactory to the Administrative Agent,
addressed to the Administrative Agent and each of the Lenders and dated the
Restatement Effective Date, from Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda
counsel to the Borrowers, which opinion shall cover the matters covered in
Exhibit H-2 hereto and without duplication (iii) opinions from counsel to
each Designated Subsidiary Borrower existing on the Restatement Effective
Date in form and substance reasonably satisfactory to the Administrative
Agent, from counsel to such Designated Subsidiary Borrowers reasonably
satisfactory to the Administrative Agent, covering such of the matters set
forth in the opinion of counsel delivered to the Administrative Agent on
the Restatement Effective Date pursuant to immediately preceding clauses
(i) and (ii) above, as may be reasonably requested by the Administrative
Agent, and such other matters incident to the transactions contemplated
thereby as the Administrative Agent may reasonably request.
(c) (i) On the Restatement Effective Date, the Administrative Agent
shall have received, from each Borrower, a certificate, dated the
Restatement Effective Date, signed by an Authorized Officer of such
Borrower, and attested to by the Secretary or any Assistant Secretary of
such Borrower, in the form of Exhibit F hereto with appropriate insertions
and deletions, together with (x) copies of its certificate of
incorporation, by-laws or other organizational documents (or, if such
organizational documents and/or by-
54
laws have not been amended, modified or supplemented since the Original
Effective Date such certificate shall certify that there have been no
amendments, modifications or supplements to such organizational documents
since the Original Effective Date) and (y) the resolutions of the board of
directors of such Borrower relating to the Credit Documents which shall be
satisfactory to the Administrative Agent.
(ii) On or prior to the Restatement Effective Date, all corporate and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents
shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received all
information and copies of all certificates, documents and papers, including
certificates of existence or good standing certificates, as applicable, and
any other records of corporate proceedings and governmental approvals, if
any, which the Administrative Agent reasonably may have requested in
connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
(d) Since December 31, 2004, nothing shall have occurred or become
known to the Administrative Agent or the Required Lenders which has had, or
could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
(e) On the Restatement Effective Date, no actions, suits or proceedings
by any entity (private or governmental) shall be pending against the
Company or any of its Subsidiaries (i) with respect to this Agreement, any
other Credit Document, the Transaction or (ii) which has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(f) On the Restatement Effective Date, all governmental and third party
approvals, permits and licenses required to be obtained in connection with
the Transaction on or prior to the Restatement Effective Date shall have
been obtained and remain in full force and effect.
(g) On the Restatement Effective Date, the Company and its Subsidiaries
shall have no outstanding preferred stock or Indebtedness except (x) the
Loans, and (y) preferred stock or Indebtedness set forth on Schedule 4.15.
(h) On the Restatement Effective Date, there shall exist no Default or
Event of Default, and all representations and warranties made by each
Borrower contained herein or in any other Credit Document to which it is a
party shall be true and correct in all material respects (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
(i) On the Restatement Effective Date, each Regulated Insurance Company
which has a rating in effect on the Closing Date shall have an A.M. Best
financial strength rating of at least "A-".
55
(j) On the Restatement Effective Date, the Company shall have paid the
Administrative Agent and the Lenders all fees, reasonable out-of-pocket
expenses (including, without limitation, legal fees and expenses of the
Administrative Agent) and other compensation contemplated by this Agreement
and the other Credit Documents, agreed upon by such parties to be paid on
or prior to the Restatement Effective Date.
(k) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received (i) duly authorized and executed counterparts to
the Security Agreement Acknowledgement in the form of Exhibit D-2 (the
"Security Agreement Acknowledgement") and each of the Security Agreement
Acknowledgement and the Security Agreement shall be in full force and
effect and (ii) duly authorized and executed counterparts to the Account
Control Agreement Acknowledgement in the form of Exhibit I-2 (the "Account
Control Agreement Acknowledgement") and each of the Account Control
Agreement Acknowledgement and the Account Control Agreement shall be in
full force and effect.
(l) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received 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, perfect or maintain
the Liens intended to be created under the Security Agreement.
(m) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received results of a recent search of the Uniform
Commercial Code (or equivalent) filings made with respect to each Borrower
in the jurisdictions contemplated in clause (l) above (including, without
limitation, Washington, D.C., and Bermuda) and in such other jurisdictions
in which Collateral is located on the Effective 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 Security Agreement or have been released.
(n) On the Restatement Effective Date, the letter received by the
Administrative Agent on the Original Effective Date from the Service of
Process Agent, presently located at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, indicating its consent to its appointment by the
Company and each Designated Subsidiary Borrower as their agent to receive
service of process as specified in this Agreement shall be in full force
and effect and shall apply to this Agreement in all respects.
(o) On the Restatement Effective Date, (i) the Company shall have
repaid in full all loans outstanding under the Existing Credit Agreement on
the Restatement Effective Date, together with all accrued and unpaid
interest, fees and commitment commission (and any other amounts) owing
under the Existing Credit Agreement through the Restatement Effective Date
and (ii) each lender under the Existing Credit Agreement shall have
received payment in full of all amounts then due and owing to it under the
Existing Credit Agreement.
56
(p) On the Effective Date, any Existing Lender that will not be a
Lender under this Agreement shall have executed an Exiting Lender
Agreement.
The Administrative Agent shall notify the Company and the Lenders of
the Restatement Effective Date, and such notice shall be conclusive and binding.
Section 5.02. Each Credit Event. The obligation of each Lender to make
each Loan (including Loans made on the Restatement Effective Date), and the
obligation of each LC Issuer to issue each Letter of Credit (including Letters
of Credit issued on the Restatement Effective Date) or to increase the Stated
Amount thereof is subject, at the time of each such Credit Event, to the
satisfaction of the following conditions:
(a) The Restatement Effective Date shall have occurred;
(b) (i) There shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the
date of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date);
(c) The Administrative Agent shall have determined that there is
sufficient availability in respect of each relevant Borrowing Base at the
time of each Credit Event;
(d) In the case of any making of Loans, the Administrative Agent shall
have received a Borrowing Request meeting the requirements of Section 2.03
with respect to each incurrence of Loans;
(e) In the case of any issuance of Letters of Credit, the
Administrative Agent shall have received a Letter of Credit Request meeting
the requirements of Section 3.04; and
(f) In the case of any issuance of Letters of Credit, all of the
applicable conditions set forth in Section 3.03(a) and (b) shall have been
satisfied.
Each occurrence of a Credit Event shall be deemed to constitute a
representation and warranty by the applicable Borrower and the Company on the
date thereof as to the matters specified in paragraphs (a) and (b) of this
Section 5.02.
ARTICLE VI
Affirmative Covenants
Until the Total Commitment (and the Commitment of each Lender) and each
Letter of Credit has expired or been terminated and all Unpaid Drawings, the
principal of and interest on each Loan, and all fees payable hereunder shall
have been irrevocably paid in full, each of the Company and each Designated
Subsidiary Borrower covenants and agrees with the
57
Lenders that:
Section 6.01. Information Covenants. The Company will furnish to each
Lender:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company, the
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal year and the related consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its Subsidiaries for such
fiscal year, setting forth in comparative form the consolidated figures for the
previous fiscal year, all in reasonable detail and accompanied by a report
thereon of PricewaterhouseCoopers LLP or other independent public accountants of
recognized national standing selected by the Company, which report shall state
that such consolidated financial statements present fairly in all material
respects the consolidated financial position of the Company and its Subsidiaries
as at the dates indicated and their consolidated results of operations and cash
flows for the periods indicated in conformity with GAAP and that the audit by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards.
(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Company, consolidated balance
sheets of the Company and its Subsidiaries as at the end of such period and the
related consolidated statements of income, changes in shareholders' equity and
cash flows of the Company and its Subsidiaries for such period and (in the case
of the second and third quarterly periods) for the period from the beginning of
the current fiscal year to the end of such quarterly period, setting forth in
each case in comparative form the consolidated figures for the corresponding
periods of the previous fiscal year, all in reasonable detail and certified by
the chief financial officer of the Company as presenting fairly in all material
respects, in accordance with GAAP, the information contained therein, subject to
changes resulting from normal year-end audit adjustments and the absence of full
footnote disclosure.
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 6.01(a) and 6.01(b), a certificate
of a Financial Officer of the Company to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall set forth the calculations
required to establish whether the Company and its Subsidiaries were in
compliance with the provisions of Sections 7.09, 7.10 and 7.11, as at the end of
such fiscal year or quarter, as the case may be.
(d) Notice of Default or Litigation. (x) Within five Business Days
after the Company becomes aware of the occurrence of any Default and/or any
event or condition constituting, or which could reasonably be expected to have,
a Material Adverse Effect, a certificate of an Authorized Officer of the Company
setting forth the details thereof and the actions which the Company is taking or
proposes to take with respect thereto and (y) promptly after the Company knows
of the commencement thereof, notice of any litigation, dispute or proceeding
involving a claim against the Company and/or any Subsidiary which claim could
reasonably be expected to have a Material Adverse Effect.
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(e) Other Statements and Reports. Promptly upon the mailing thereof to
the security holders of the Company generally, copies of all financial
statements, reports and proxy statements so mailed.
(f) SEC Filings. Promptly upon the filing thereof, copies of (or, to
the extent same is publicly available via the SEC's "XXXXX" filing system,
written notification of the filing of) all registration statements (other than
the exhibits thereto and any registration statements on Form S-8 or its
equivalent) and annual or quarterly reports which the Company shall have filed
with the SEC or any national securities exchange.
(g) Insurance Reports and Filings.
(i) Promptly after the filing thereof, a copy of each Statutory
Statement filed by each Regulated Insurance Company.
(ii) Promptly following the delivery or receipt, as the case may be, by
any Regulated Insurance Company or any of their respective Subsidiaries,
copies of (a) each material registration, filing or submission made by or
on behalf of any Regulated Insurance Company with any Applicable Insurance
Regulatory Authority, except for policy form or rate filings, (b) each
material examination and/or audit report submitted to any Regulated
Insurance Company by any Applicable Insurance Regulatory Authority, (c) all
material information which the Lenders may from time to time request with
respect to the nature or status of any deficiencies or violations reflected
in any examination report or other similar report, and (d) each material
report, order, direction, instruction, approval, authorization, license or
other notice which the Company or any Regulated Insurance Company may at
any time receive from any Applicable Insurance Regulatory Authority.
(iii) As soon as available and in any event within 120 days after the
end of each fiscal year of the Company, a report by an independent
actuarial consulting firm of recognized national standing reviewing the
adequacy of loss and loss adjustment expense reserves as at the end of the
last fiscal year of the Company and its Subsidiaries on a consolidated
basis, determined in accordance with SAP and stating that the Regulated
Insurance Companies have maintained adequate reserves, it being agreed that
in each case such independent firm will be provided access to or copies of
all relevant valuations relating to the insurance business of each such
Regulated Insurance Company in the possession of or available to the
Company or its Subsidiaries.
(iv) Promptly following notification thereof from a Governmental
Authority, notification of the suspension, limitation, termination or
non-renewal of, or the taking of any other materially adverse action in
respect of, any material Insurance License.
(h) Borrowing Base Certificate. No later than the tenth Business Day of
each month, a Borrowing Base Certificate from each Borrower as of the last day
of the immediately preceding month, executed by an Authorized Officer of such
Borrower.
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(i) Other Information. With reasonable promptness, such other
information or existing documents (financial or otherwise) as the Administrative
Agent or any Lender may reasonably request from time to time.
(j) Delivery of Information. Each Borrower and each Lender hereby
acknowledges and agrees that notwithstanding anything to the contrary contained
in Section 11.12 of this Agreement, the Administrative Agent and/or the Company
may make available to the Lenders materials and/or information provided by or on
behalf of any Borrower under this Agreement or any other Credit Document by
posting such materials and/or information on IntraLinks or another similar
electronic system reasonably acceptable to the Administrative Agent and the
Company.
Section 6.02. Books, Records and Inspections. The Company will (i)
keep, and will cause each of its Subsidiaries to keep, proper books of record
and account in which full, true and correct entries in conformity with GAAP or
SAP, as applicable, shall be made of all dealings and transactions in relation
to its business and activities; and (ii) subject to binding contractual
confidentiality obligations of the Company and its Subsidiaries to third parties
and to Section 11.12, permit, and will cause each of its Subsidiaries to permit,
representatives of any Lender (at such Lender's expense prior to the occurrence
of an Event of Default and at the Company's expense after an Event of Default
has occurred and is continuing) to visit and inspect any of their respective
properties, to examine their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, in each case at such reasonable
times (which shall be, unless an Event of Default has occurred and is
continuing, during business hours, upon reasonable prior notice to the
Administrative Agent, which notice shall be promptly conveyed to the Company)
and as often as may reasonably be desired. The Company agrees to cooperate and
assist in such visits and inspections. Notwithstanding anything to the contrary
contained in this Agreement, no Lender shall be entitled to consult with any
independent accounting firm of the Company regarding the Company's or any of its
Subsidiary's business without the prior written consent of the Company
Section 6.03. Insurance. The Company will maintain, and will cause each
of its Subsidiaries to maintain (either in the name of the Company or in the
Subsidiary's own name) with financially sound and reputable insurance companies,
insurance on all their property in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
of established repute engaged in the same or similar businesses.
Section 6.04. Payment of Taxes. The Company will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all income taxes and
all other material taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to it,
in each case, on a timely basis prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Company or any of its Subsidiaries; provided that
neither the Company nor any Subsidiary of the Company shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.
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Section 6.05. Maintenance of Existence. The Company shall maintain, and
shall cause each of its Subsidiaries to maintain, its existence, provided that
the Company shall not be required to maintain the existence of any of its
Subsidiaries if the Company shall determine in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole. The Company will qualify and remain
qualified, and cause each of its Subsidiaries to qualify and remain qualified,
as a foreign corporation in each jurisdiction where the Company or such
Subsidiary, as the case may be, is required to be qualified, except in those
jurisdictions in which the failure to receive or retain such qualifications
would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
Section 6.06. Compliance with Statutes, etc. The Company will, and will
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls) other than those
the non-compliance with which would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Section 6.07. ERISA. Promptly after the Company, any of its
Subsidiaries or, in the case of clauses (i) through (v) below, any of its ERISA
Affiliates knows or has reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan or Foreign
Pension Plan has occurred or exist, a certificate of an Authorized Officer of
the Company setting forth details respecting such event or condition and the
action if any, that the Company, such Subsidiary or such ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or notice
required to be filed with or given to the PBGC or an applicable foreign
governmental agency by the Company, such Subsidiary or such ERISA Affiliate with
respect to such event or condition):
(i) any reportable event, as defined in subsections (c)(1), (2), (5)
and (6), and subsection (d)(2) of Section 4043 of ERISA and the regulations
issued thereunder, with respect to a Plan;
(ii) the filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan under a distress termination or the distress termination
of any Plan;
(iii) the institution by the PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company, any of its
Subsidiaries or any of its ERISA Affiliates of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect
to such Multiemployer Plan which could reasonably be expected to result in
a liability to the Company or any of its Subsidiaries in excess of
$15,000,000;
(iv) the receipt by the Company, any of its Subsidiaries or any of its
ERISA Affiliates of notice from a Multiemployer Plan that the Company, any
of its Subsidiaries or any of its ERISA Affiliates has incurred withdrawal
liability under Section 4201 of ERISA in excess of $15,000,000 or that such
Multiemployer Plan is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or
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has terminated under Section 4041A of ERISA whereby a deficiency or
additional assessment is levied or threatened to be levied in excess of
$15,000,000 against the Company, any of its Subsidiaries or any of its
ERISA Affiliates;
(v) the institution of a proceeding by a fiduciary of any Plan or
Multiemployer Plan against the Company, any of its Subsidiaries or any of
its ERISA Affiliates to enforce Section 515 or 4219(c)(5) of ERISA
asserting liability in excess of $15,000,000, which proceeding is not
dismissed within 30 days; and
(vi) that any material contribution required to be made with respect to
a Foreign Pension Plan has not been timely made, or that the Company or any
Subsidiary of the Company may incur any material liability pursuant to any
Foreign Pension Plan (other than to make contributions in the ordinary
course of business).
Section 6.08. Maintenance of Property. The Company shall, and will
cause each of its Subsidiaries to, maintain all of their properties and assets
in good condition, repair and working order, ordinary wear and tear excepted,
except where failure to maintain the same would not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
Section 6.09. Maintenance of Licenses and Permits. The Company will,
and will cause each of its Subsidiaries to, maintain all permits, licenses and
consents as may be required for the conduct of its business by any state,
federal or local government agency or instrumentality, except where failure to
maintain the same would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
Section 6.10. End of Fiscal Years; Fiscal Quarters. The Company will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
December 31 of each year and (ii) each of its, and each of its Subsidiaries',
fiscal quarters to end on dates which are consistent with a fiscal year end as
described above.
Section 6.11. Borrowing Base Requirement. Subject to Section 2.08, the
Company and each Designated Subsidiary Borrower shall at all times cause its
respective Borrowing Base to equal or exceed the Revolving Credit Exposure
attributable to such Borrower at such time.
Section 6.12. Further Assurances. Each Borrower shall promptly and duly
execute and deliver to the Administrative Agent and/or the Collateral Agent such
documents and assurances and take such further action as the Administrative
Agent may from time to time reasonably request in order to carry out more
effectively the intent and purpose of the Credit Documents and to establish,
protect and perfect the rights and remedies created or intended to be created in
favor of the Collateral Agent, the Administrative Agent or the Lenders pursuant
to the Credit Documents.
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ARTICLE VII
Negative Covenants
Until the Total Commitment (and the Commitment of each Lender) and each
Letter of Credit has expired or terminated and all Unpaid Drawings, the
principal of and interest on each Loan and all fees payable hereunder have been
irrevocably paid in full, each of the Company and each Designated Subsidiary
Borrower covenants and agrees with the Lenders that:
Section 7.01. Changes in Business. The Company will not, and will not
permit any of its Subsidiaries to, engage (directly or indirectly) in any
business other than (a) businesses in which they are engaged (or proposed to be
engaged as described in the Company's annual report on Form 10K for the year
ending December 31, 2004) as of the Restatement Effective Date and reasonable
extensions thereof , (b) other specialty insurance and structured risk insurance
and reinsurance product lines, and (c) and other businesses that are
complementary or reasonably related thereto and the conduct of business
incidental thereto, including political risk products, financial guaranty
products, trade credit risk products, life surplus relief products, closed block
mortality risk products and life settlement products.
Section 7.02. Consolidations, Mergers, Sales of Assets and
Acquisitions. (a) The Company will not, and will not permit any of its
Subsidiaries to, consolidate or merge with or into any other Person; provided
that (i) the Company may merge with another Person, if (x) the Company is the
entity surviving such merger and (y) immediately after giving effect to such
merger, no Default or Event of Default shall have occurred and be continuing,
(ii) any Subsidiary may merge with another Person, if (x) such Subsidiary is the
entity surviving such merger and (y) immediately after giving effect to such
merger, no Default or Event of Default shall have occurred and be continuing,
(iii) Wholly-Owned Subsidiaries of the Company may merge with one another
provided that if one of such Subsidiaries is a Designated Subsidiary Borrower
and the other is not, then the Designated Subsidiary Borrower must be the
surviving entity of such merger and (iv) a Subsidiary (other than a Designated
Subsidiary Borrower) of the Company may merge or consolidate with any other
Person if immediately after giving effect to such merger no Default or Event of
Default shall have occurred and be continuing. In addition, the Company will
not, nor will it permit any of its Subsidiaries to, sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, all
or substantially all of its properties or assets, tangible or intangible, except
(I) such dispositions by the Company or any of its Subsidiaries of any of their
respective properties or assets to the Company or any Wholly-Owned Subsidiary of
the Company, (II) sales, transfers or other dispositions of the assets of any
Subsidiary which in the aggregate do not exceed in any fiscal year of the
Company 5% or more of the lesser of the book or fair market value of the
property and assets of the Company determined on a consolidated basis as of the
last day of the previous fiscal year of the Company and (III) subject to Section
6.05, the dissolution or winding up of any Subsidiary other than a Designated
Subsidiary Borrower.
(b) The Company will not, nor will it permit any of its Subsidiaries
to, acquire all or substantially all of the capital stock or assets of another
Person unless at such time and immediately after giving effect thereto no
Default or Event of Default exists or would result therefrom.
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Section 7.03. Liens. Neither the Company nor any of its Subsidiaries
will permit, create, assume, incur or suffer to exist any Lien on any asset
tangible or intangible now owned or hereafter acquired by it, except:
(a) Liens existing on the Restatement Effective Date and listed on
Schedule 7.03 hereto;
(b) Liens securing repurchase agreements constituting a borrowing of
funds by the Company or any Subsidiary of the Company in the ordinary
course of business for liquidity purposes and in no event for a period
exceeding 90 days in each case;
(c) Liens arising pursuant to purchase money mortgages, capital leases
or security interests securing Indebtedness representing the purchase price
(or financing of the purchase price within 90 days after the respective
purchase) of assets acquired by the Company or any of its Subsidiaries;
(d) Liens on any asset of any Person existing at the time such Person
is merged or consolidated with or into the Company or any of its
Subsidiaries or at the time of acquisition of such asset by the Company or
any of its Subsidiaries and not created in contemplation of such event;
(e) Liens securing obligations owed by the Company to any of its
Subsidiaries or owed by any Subsidiary of the Company to the Company or any
Subsidiary of the Company, in each case solely to the extent that such
Liens are required by an Applicable Insurance Regulatory Authority for such
Person to maintain such obligations;
(f) Liens securing insurance or reinsurance obligations of Subsidiaries
of the Company owed by any Subsidiary of the Company to the Company or any
Subsidiary of the Company, in each case solely to the extent that such
Liens are required or requested by rating agencies, regulatory agencies,
clients or brokers for such Person to maintain such insurance obligations;
(g) Liens on investments and cash balances of any Regulated Insurance
Company securing obligations of such Regulated Insurance Company in respect
of trust or similar arrangements formed, letters of credit issued or funds
withheld balances established, in each case, in the ordinary course of
business for the benefit of policyholders or cedents to secure insurance or
reinsurance recoverables owed to them by such Regulated Insurance Company;
(h) Inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP;
(i) Liens in respect of property or assets of the Company or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course
64
of business, and (x) which do not in the aggregate materially detract from
the value of the Company's or such Subsidiary's property or assets or
materially impair the use thereof in the operation of the business of the
Company or such Subsidiary or (y) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or assets subject to any such Lien;
(j) Licenses, sublicenses, leases, or subleases granted to other
Persons not materially interfering with the conduct of the business of the
Company or any of its Subsidiaries;
(k) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct
of the business of the Company or any of its Subsidiaries;
(l) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 8.07;
(m) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits and Liens securing the
performance of bids, reinsurance obligations, tenders, leases and contracts
in the ordinary course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business and consistent with past practice (exclusive of
obligations in respect of the payment for borrowed money);
(n) Bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to cash and cash equivalents on deposit in one or more
accounts maintained by the Company or any of its Subsidiaries, in each case
granted in the ordinary course of business in favor of the bank or banks
with which such accounts are maintained;
(o) Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
clauses of this Section 7.03, provided that such Indebtedness is not
increased and is not secured by any additional assets;
(p) Liens created pursuant to the Credit Documents;
(q) Liens in respect of property or assets of any Subsidiary of the
Company securing Indebtedness of the type described in clause (e) of the
definition of "Permitted Subsidiary Indebtedness";
(r) Liens in respect of property or assets of any Subsidiary of the
Company securing Indebtedness of the type described in clause (i) of the
definition of "Permitted Subsidiary Indebtedness"; provided that the
aggregate amount of the Indebtedness secured by such Liens shall not, when
added to the aggregate amount of all outstanding obligations of the Company
secured by Liens incurred pursuant to Section 7.03(v),
65
exceed at any time the sum of (x) 10% of Consolidated Net Worth at the time
of incurrence of any new Liens under this clause (r) and (y) $5,000,000;
(s) Liens on assets received by or of the Company or its Subsidiaries
and held in trust in respect of, or deposited or segregated to secure,
liabilities assumed in the course of the reinsurance business or under any
Insurance Contracts, Reinsurance Agreements, Fronting Arrangements or other
indemnity arrangements entered in the ordinary course of business;
(t) Liens on cash and securities securing Indebtedness under, or
otherwise granted in accordance with the terms of, transactions in Capital
Markets Products, (i) in the case of the Company, entered into in the
ordinary course of business of the Company, and (ii) in the case of any
Subsidiary, of the type described in clause (b) of the definition of
"Permitted Subsidiary Indebtedness"; provided that the aggregate amount of
cash and securities pledged under this clause (t) shall not exceed 10% of
Consolidated Net Worth at the time of incurrence of any Liens under this
clause (t);
(u) Liens not securing indebtedness for borrowed money on cash and
securities arising in the ordinary course of business in connection with
the structured risk insurance and reinsurance product lines of the Company
and its Subsidiaries; and
(v) in addition to the Liens described in clauses (a) through (u)
above, Liens securing obligations of the Company; provided that the
aggregate amount of the obligations secured by such Liens shall not, when
added to the aggregate amount of outstanding Indebtedness of Subsidiaries
incurred pursuant to clause (i) of the definition of "Permitted Subsidiary
Indebtedness", exceed at any time the sum of (x) 10% of Consolidated Net
Worth at the time of incurrence of any new Liens under this clause (v) and
(y) $5,000,000.
Section 7.04. Indebtedness. (a) The Company will not create, incur,
assume or permit to exist any Indebtedness, or agree, become or remain liable
(contingent or otherwise) to do any of the foregoing, except for the
Indebtedness under the Credit Documents and other Indebtedness which is either
pari passu with, or subordinated in right of payment to, the Loans (it being
understood that unsecured Indebtedness is not subordinate to secured
Indebtedness solely because it is unsecured, and Indebtedness that is not
guaranteed by a particular Person is not deemed to be subordinate to
Indebtedness that is so guaranteed solely because it is not so guaranteed).
(b) The Company will not permit any of its Subsidiaries to create,
incur, assume or permit to exist any Indebtedness, or agree, become or remain
liable (contingent or otherwise) to do any of the foregoing, except for
Permitted Subsidiary Indebtedness.
Section 7.05. Issuance of Stock. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly issue, sell, assign,
pledge, or otherwise encumber or dispose of any shares of its preferred or
preference equity securities or options to acquire preferred or preference
equity securities, except the issuance of preferred or preference equity
securities, so long as (i) (x) no part of such preferred or preference equity
securities is mandatorily redeemable (whether on a scheduled basis or as a
result of the occurrence of any
66
event or circumstance) prior to the date occurring six months after the
Commitment Expiration Date or (y) all such preferred or preference equity
securities or options therefor are issued to and held by the Company and its
Wholly-Owned Subsidiaries and (ii) such preferred or preference equity
securities do not contain any financial performance related covenants or
incurrence covenants which restrict the operations of the issuer thereof;
provided that such preferred or preference securities may contain financial
performance related covenants or incurrence covenants which are no more
restrictive than the terms, provisions and covenants contained herein.
Section 7.06. Dissolution. The Company shall not suffer or permit
dissolution or liquidation either in whole or in part, except through corporate
reorganization to the extent permitted by Section 7.02.
Section 7.07. Restricted Payments. The Company will not declare or pay
any dividends, purchase, redeem, retire, defease or otherwise acquire for value
any of its Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons thereof) as
such, make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent Persons
thereof) as such, or permit any of its Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any Equity Interests in the Company or to
sell any Equity Interests therein (each of the foregoing a "Dividend" and,
collectively, "Dividends") provided that this Section 7.07 shall not prohibit
(a) the purchase, redemption, retirement, defeasement or other acquisition of
Equity Interest of the Company in connection with the termination of employment
of an employee of the Company or its Subsidiaries, (b) the issuance of Equity
Interests in exchange for or cancellation of any Equity Interests of the
Company, (c) the sale or issuance of any Equity Interests of any Subsidiary to
another wholly owned Subsidiary or to the Company, (d) the issuance to a
customer or broker of a Protected Cell Company of non-voting Equity Interests of
such Regulated Insurance Company, (e) the purchase, redemption, retirement,
defeasement or other acquisition of Equity Interest issued by the Company with
the proceeds received from the substantially concurrent issue of new shares of
its common stock or other common Equity Interests of the Company, (f) the
declaration and dividend payments or other distributions payable solely in the
common stock or other common Equity Interests of the Company, (g) the payment of
cash Dividends in respect of Existing Preferred Stock, as and to the extent
required by the respective Existing Preferred Stock Documents and (h) Dividends
permitted by Section 7.02.
Section 7.08. Transactions with Affiliates. Neither the Company nor any
of its Subsidiaries shall enter into or be a party to, a transaction with any
Affiliate of the Company or such Subsidiary (which Affiliate is not the Company
or a Subsidiary), except (i) transactions with Affiliates on terms (x) no less
favorable to the Company or such Subsidiary than those that could have been
obtained in a comparable transaction on an arm's length basis from an unrelated
Person or (y) approved by the audit committee or a majority of the disinterested
members of the board of directors of the Company, (ii) transactions and payments
pursuant to agreements and arrangements disclosed in, or listed as an exhibit
to, the Company's filings with the SEC through the Restatement Effective Date or
any such agreement or arrangement as thereafter amended, extended or replaced on
terms that are, in the aggregate, no less favorable to the Company and its
Subsidiaries than the terms of such agreement on the Restatement Effective Date,
as the case
67
may be, (iii) Dividends not prohibited by Section 7.07, (iv) fees and
compensation paid to and indemnities provided on behalf of officers and
directors of the Company or any of its Subsidiaries as reasonably determined in
good faith by the board of directors, the audit committee or senior management
of Borrower and (v) the issuance of common stock of the Company.
Section 7.09. Maximum Leverage Ratio. The Company will not permit the
Leverage Ratio at any time to be greater than 0.35:1.00.
Section 7.10. Minimum Consolidated Net Worth. The Company will not
permit Consolidated Net Worth at any time to be less than the Minimum
Consolidated Net Worth Amount in effect at such time.
Section 7.11. Limitation on Certain Restrictions on Subsidiaries. The
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or consensual restriction on the ability of any such
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by the Company
or any of its Subsidiaries, or pay any Indebtedness owed to the Company or any
of its Subsidiaries, (b) make loans or advances to the Company or any of its
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable Legal Requirements, including any
Applicable Insurance Regulatory Authority, (ii) this Agreement and the other
Credit Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing any leasehold interest of the Company or any
of its Subsidiaries, (iv) customary provisions restricting assignment of any
licensing agreement (in which the Company or any of its Subsidiaries is the
licensee) or other contract (including leases) entered into by the Company or
any of its Subsidiaries in the ordinary course of business, (v) restrictions on
the transfer of any asset pending the close of the sale of such asset, (vi)
restrictions on the transfer of any asset subject to a Lien permitted by Section
7.03, (vii) agreements entered into by a Regulated Insurance Company with an
Applicable Insurance Regulatory Authority, (viii) customary provisions in
partnership agreements, limited liability company organizational governance
documents, joint venture agreements and other similar agreements entered into in
the ordinary course of business that restrict the transfer of ownership
interests in such partnership, limited liability company, joint venture or
similar Person, (ix) restrictions on cash or other deposits or net worth imposed
by customers under contracts (including Insurance Contracts, Fronting
Arrangements and Reinsurance Agreements) entered into in the ordinary course of
business, pursuant to an agreement or instrument relating to any Permitted
Subsidiary Indebtedness of the type described in clause (d) or (g) of the
definition thereof (1) if the encumbrances and restrictions contained in any
such agreement or instrument taken as a whole are not materially less favorable
to the Lenders than the encumbrances and restrictions contained in this
Agreement or (2) if such encumbrance or restriction is not materially more
disadvantageous to the Lenders than is customary in comparable financings and
such encumbrance or restriction will not materially affect the Company's ability
to make principal or interest payments on the Loans, (x) any encumbrances or
restrictions imposed by any amendments or refinancings of the contracts,
instruments or obligations referred to in clause (ix) above provided that such
amendments or refinancings are no more materially restrictive with respect to
such encumbrances and restrictions that those prior to
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such amendment or refinancing, (xi) restrictions placed in accordance with the
Segregated Account Companies Act 2000 of Bermuda on the transfer of any asset
held, carried or deposited in a segregated account of a Protected Cell Company,
(xii) restrictions contained in the Existing Preferred Stock Documents, (xiii)
after the execution and delivery thereof, restrictions contained in the Lloyd's
Facility and (xiv) after the execution and delivery thereof, restrictions
contained in the Life Facility.
Section 7.12. Private Act. No Borrower will become subject to a Private
Act.
Section 7.13. Claims Paying Ratings. The Company shall not permit at
any time the financial strength rating of any Regulated Insurance Company which
has a rating in effect at any time on or after the Closing Date to be less than
"B++" from A.M. Best & Co. (or its successor).
ARTICLE VIII
Events of Default
If any of the following events ("Events of Default") shall occur:
Section 8.01. Payments. Any Borrower shall (a) default in the payment
when due of any Unpaid Drawing or any principal of any Loan, (b) default, and
such default shall continue for three or more Business Days, in the payment when
due of any interest on any Loan or any Unpaid Drawing, (c) default, and such
default shall continue for five or more Business Days, in the payment when due
of any or any fees or any other amounts payable hereunder or pursuant to any
other Credit Documents; or
Section 8.02. Representations, etc. Any representation, warranty or
statement made (or deemed made) by any Borrower herein or in any other Credit
Document or in any certificate or statement delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
Section 8.03. Covenants. Any Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.01(d), 6.02(ii), 6.05 (but only with respect to the first sentence
thereof), 6.11 or Article VII, or (b) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Section 8.01 or clause (a) of this Section 8.03) contained in this
Agreement and such default shall continue unremedied for a period of 30 days
after written notice to the Company from the Administrative Agent or the
Required Lenders; or
Section 8.04. Default under other Agreements. (a) The Company or any of
its Subsidiaries shall (i) default in any payment with respect to Indebtedness
(other than the Loans, but in any event, including after the execution and
delivery thereof, Indebtedness under the Lloyd's Facility and the Life Facility)
in excess of $30,000,000 individually or in the aggregate, for the Company and
its Subsidiaries, beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other
69
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice of acceleration, or any
lapse of time prior to the effectiveness of any notice of acceleration, is
required), any such Indebtedness to become due prior to its stated maturity; or
(b) Indebtedness of the Company or its Subsidiaries in excess of $30,000,000
shall be declared to be due and payable or required to be prepaid, other than by
a regularly scheduled required prepayment or as a mandatory prepayment (unless
such required prepayment or mandatory prepayment results from a default
thereunder or an event of the type that constitutes an Event of Default), prior
to the stated maturity thereof; or
Section 8.05. Bankruptcy, etc. The Company or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Company or any of its Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Company or any of its Subsidiaries or the Company or any of its Subsidiaries
commences (including by way of applying for or consenting to the appointment of,
or the taking of possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a "conservator") of itself or all or
any substantial portion of its property) any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency, liquidation, rehabilitation, supervision, conservatorship or similar
law of any jurisdiction or the Bermuda Companies Law whether now or hereafter in
effect relating to the Company or any of its Subsidiaries; or any such
proceeding is commenced against (a) any Regulated Insurance Company which is
engaged in the business of underwriting insurance and/or reinsurance, or (b) the
Company or any of its Subsidiaries, and in the case of either clause (a) or (b)
such proceeding is not controverted within 10 days, or is not dismissed within
60 days; or the Company or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or (x) any Regulated Insurance Company which is engaged
in the business of underwriting insurance and/or reinsurance suffers any
appointment of any conservator or the like for it or any substantial part of its
property, or (y) the Company or any of its Subsidiaries suffers any appointment
of any conservator or the like for it or any substantial part of its property
which continues undischarged or unstayed for a period of 60 days; or the Company
or any of its Subsidiaries makes a general assignment for the benefit of
creditors; or any corporate action is taken by the Company or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
Section 8.06. ERISA. (i) An event or condition specified in Section
6.07 shall occur or exist with respect to any Plan or Multiemployer Plan or
Foreign Pension Plan, (ii) the Company, any of its Subsidiaries or any of its
ERISA Affiliates shall fail to pay when due any amount which they shall have
become liable to pay to the PBGC or to a Plan or a Multiemployer Plan under
Title IV of ERISA, or (iii) a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Plan must be
terminated, and as a result of such event, failure or condition, together with
all such other events, failures or conditions, the Company, any of its
Subsidiaries or any of its ERISA Affiliates shall be
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reasonably likely to incur a liability to a Plan, a Multiemployer Plan, a
Foreign Pension Plan or PBGC (or any combination of the foregoing) in an
aggregate amount of $30,000,000 or more; or
Section 8.07. Judgments. One or more judgments or decrees shall be
entered against the Company or any of its Subsidiaries involving a liability,
net of undisputed insurance and reinsurance, of $30,000,000 or more in the case
of any one such judgment or decree or in the aggregate for all such judgments
and decrees for the Company and its Subsidiaries and any such judgments or
decrees shall not have been vacated, discharged, satisfied, stayed or bonded
pending appeal within 60 days from the entry thereof; or
Section 8.08. Insurance Licenses. Any one or more Insurance Licenses of
the Company or any of its Subsidiaries shall be suspended, limited or terminated
or shall not be renewed, or any other action shall be taken by any Governmental
Authority, and such suspension, limitation, termination or non-renewal could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect; or
Section 8.09. Change of Control. A Change of Control shall occur; or
Section 8.10. Security Documents. Any Security Document shall cease to
be in full force and effect, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby (including,
without limitation, a first priority security interest in, and Lien on, all of
the Collateral subject thereto, in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons and subject to no other Liens); or
any Borrower or any other pledgor thereunder shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Security Document; or
Section 8.11. Company Guaranty. The Company Guaranty or any provision
thereof shall cease to be in full force or effect, or any Person acting by or on
behalf of the Company shall deny or disaffirm the Company's obligations under
the Company Guaranty, or the Company shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the Company Guaranty;
then, and in any such event, and at any time thereafter, if an Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Company, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Borrower,
except as otherwise specifically provided for in this Agreement (provided that
if an Event of Default specified in Section 8.05 shall occur with respect to the
Company, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i), (ii) and (iv) below shall
occur automatically without the giving of any such notice): (i) declare the
Total Commitment terminated, whereupon the Commitment of each Lender shall
forthwith terminate immediately; (ii) declare the principal of and any accrued
interest and fees in respect of all obligations owing hereunder and under the
other Credit Documents to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each Borrower; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct each Borrower
to pay to the Collateral Account maintained by the Collateral Agent such
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additional amounts of cash, to be held as security for such Borrower's
reimbursement obligations in respect of Letters of Credit then outstanding,
equal to the aggregate Revolving Credit Exposure attributable to such Borrower;
and/or (v) enforce, as Collateral Agent (or direct the Collateral Agent to
enforce), any or all of the Liens and security interests created pursuant to the
Security Documents and/or exercise any of the rights and remedies provided
therein. In addition, upon the occurrence and during the continuation of an
Event of Default, each Borrower hereby appoints the Administrative Agent (acting
on the instructions of the Required Lenders) as the attorney-in-fact of such
Borrower, with full power of substitution, and in the name of such Borrower, to
disburse and directly apply the proceeds of its Collateral Accounts to the
satisfaction of any of such Borrower's obligations hereunder or under any other
Credit Document. The power-of-attorney granted hereby is a power coupled with an
interest and is irrevocable. Unless directed to do so by the Required Lenders in
accordance with the terms of this Agreement and the other Credit Documents, the
Administrative Agent shall have no obligation to undertake any of the foregoing
actions, and, if it takes any such action it shall have no liability to any
Borrower to continue the same or for the sufficiency or adequacy thereof. At the
request of the Administrative Agent, each Borrower shall ratify all actions
taken by the Administrative Agent hereunder.
ARTICLE IX
The Administrative Agent
Section 9.01. Appointment. Each of the Lenders hereby irrevocably
appoints the Administrative Agent as its agent 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, together with such
actions and powers as are reasonably incidental thereto. As used in this Article
IX, the term "Administrative Agent" shall include XX Xxxxxx Xxxxx Bank in its
capacity as Collateral Agent under the Security Documents.
Section 9.02. Administrative Agent in its Individual Capacity. The bank
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 such bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with the Company or any Subsidiary or other Affiliate thereof as if it
were not the Administrative Agent hereunder.
Section 9.03. Exculpatory Provisions. The Administrative Agent shall
not have any duties or obligations except those expressly set forth herein.
Without limiting the generality of the foregoing, (a) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Administrative Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Administrative Agent is required to exercise in
writing as directed by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 11.02), and (c) except as expressly set forth herein, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any of its
Subsidiaries that is
72
communicated to or obtained by the bank serving as 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 with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 11.02) or 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
written notice thereof is given to the Administrative Agent by the Company or
the applicable Borrower or a Lender, and 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, (ii)
the contents of any certificate, report or other document delivered hereunder or
in connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article V or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
Section 9.04. Reliance. 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
believed by it to be genuine and to have been signed or sent 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 be made by the proper Person, and
shall not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Company), 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 9.05. Delegation of Duties. The Administrative Agent may
perform any and all its duties and exercise its rights and powers 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 its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs 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 9.06. Resignation. Subject to the appointment and acceptance of
a successor Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the Lenders and the
Company. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor administrative agent with the consent of the Company (not to
be unreasonably withheld or delayed), provided that no such consent shall be
required at any time when a Default or Event of Default exists. If no 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, appoint a successor Administrative Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
73
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 11.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
Section 9.07. Non-Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender 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 also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender 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 related agreement or any document furnished hereunder or thereunder.
Section 9.08. Co-Documentation Agents. Notwithstanding any other
provision of this Agreement or any provision of any other Credit Document, the
Co-Documentation Agents are named as such for recognition purposes only, and in
its capacity as such shall have no powers, duties, responsibilities or
liabilities with respect to this Agreement or the other Credit Documents or the
transactions contemplated hereby and thereby. Without limitation of the
foregoing, the Co-Documentation Agents shall not, solely by reason of this
Agreement or any other Credit Documents, have any fiduciary relationship with
any Lender or any other Person.
ARTICLE X
Company Guaranty
Section 10.01. The Company Guaranty. In order to induce the Lenders to
enter into this Agreement and to extend credit hereunder and in recognition of
the direct benefits to be received by the Company from the proceeds of the Loans
and the issuance of the Letters of Credit, the Company hereby agrees with the
Lenders as follows: the Company hereby unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of each Designated Subsidiary Borrower to the
Guaranteed Creditors. If any or all of the Guaranteed Obligations of any
Designated Subsidiary Borrower to the Guaranteed Creditors becomes due and
payable hereunder, the Company unconditionally promises to pay such indebtedness
to the Guaranteed Creditors, or order, on demand, together with any and all
expenses which may be incurred by the Guaranteed Creditors in collecting any of
the Guaranteed Obligations. This Company Guaranty is a guaranty of payment and
not of collection. If a claim is ever made upon any Guaranteed Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by such
payee with
74
any such claimant, then and in such event the Company agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon the
Company, notwithstanding any revocation of this Company Guaranty or any other
instrument evidencing any liability of each Designated Subsidiary Borrower, and
the Company shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
Section 10.02. Bankruptcy. Additionally, the Company unconditionally
and irrevocably guarantees the payment of any and all of the Guaranteed
Obligations of each Designated Subsidiary Borrower hereunder to the Guaranteed
Creditors whether or not due or payable by each Designated Subsidiary Borrower
upon the occurrence of any of the events specified in Section 8.05 with respect
to such Designated Subsidiary Borrower, and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money
of the United States.
Section 10.03. Nature of Liability. The liability of the Company
hereunder is exclusive and independent of any security for or other guaranty of
the Guaranteed Obligations of each Designated Subsidiary Borrower whether
executed by the Company, any other guarantor or by any other party, and the
liability of the Company hereunder is not affected or impaired by (a) any
direction as to application of payment by each Designated Subsidiary Borrower or
by any other party (other than a direction by the Guaranteed Creditor receiving
such payment), or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations of each Designated Subsidiary Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by each Designated
Subsidiary Borrower, or (e) any payment made to the Guaranteed Creditors on the
Guaranteed Obligations which any such Guaranteed Creditor repays to each
Designated Subsidiary Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
the Company waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding or (f) any action or inaction of the
type described in Section 10.05.
Section 10.04. Independent Obligation. The obligations of the Company
under this Article X are independent of the obligations of any other guarantor,
any other party or each Designated Subsidiary Borrower, and a separate action or
actions may be brought and prosecuted against the Company whether or not action
is brought against any other guarantor, any other party or each Designated
Subsidiary Borrower and whether or not any other guarantor, any other party or
each Designated Subsidiary Borrower be joined in any such action or actions. The
Company waives, to the full extent permitted by law, the benefit of any statute
of limitations affecting its liability under this Article X or the enforcement
thereof. Any payment by a Designated Subsidiary Borrower or other circumstance
which operates to toll any statute of limitations as to a Designated Subsidiary
Borrower shall operate to toll the statute of limitations as to the Company.
Section 10.05. Authorization. The obligations of the Company under this
Article X shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall
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not be released, discharged or otherwise affected by any action taken by any
Guaranteed Creditor to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any
Designated Subsidiary Borrower or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, guarantors, any
Designated Subsidiary Borrower or other obligor;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of any Designated Subsidiary Borrower to its
creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Designated Subsidiary Borrower to the
Guaranteed Creditors regardless of what liability or liabilities of any
Designated Subsidiary Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document or
any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
the Company from its liabilities under this Company Guaranty.
Section 10.06. Reliance. It is not necessary for the Guaranteed
Creditors to inquire into the capacity or powers of any Designated Subsidiary
Borrower or the officers, directors, partners or agents acting or purporting to
act on their behalf, and any Guaranteed Obligations made or created in reliance
upon the professed exercise of such powers shall be guaranteed hereunder.
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Section 10.07. Subordination. Any indebtedness of any Designated
Subsidiary Borrower now or hereafter owing to the Company is hereby subordinated
to the Guaranteed Obligations of each Designated Subsidiary Borrower owing to
the Guaranteed Creditors; and if the Administrative Agent so requests at a time
when an Event of Default exists, no Designated Subsidiary Borrower shall make,
or be permitted to make, any payment to the Company in respect of such
indebtedness owed to the Company, but without affecting or impairing in any
manner the liability of the Company under the other provisions of this Company
Guaranty. Prior to the transfer by the Company of any note or negotiable
instrument evidencing any of the indebtedness of any Designated Subsidiary
Borrower to the Company, the Company shall xxxx such note or negotiable
instrument with a legend that the same is subject to this subordination. Without
limiting the generality of the foregoing, the Company hereby agrees with the
Guaranteed Creditors that it will not exercise any right of subrogation which it
may at any time otherwise have as a result of this Company Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
Section 10.08. Waiver. (a) The Company waives any right (except as
shall be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against any Designated Subsidiary Borrower,
any other guarantor or any other party, (ii) proceed against or exhaust any
security held from any Designated Subsidiary Borrower, any other guarantor or
any other party or (iii) pursue any other remedy in any Guaranteed Creditor's
power whatsoever. The Company waives any defense based on or arising out of any
defense of any Designated Subsidiary Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of any Designated Subsidiary Borrower, any other
guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Designated Subsidiary Borrower other than payment in
full of the Guaranteed Obligations. The Guaranteed Creditors may, at their
election, foreclose on any security held by the Administrative Agent or any
other Guaranteed Creditor by one or more judicial or non-judicial sales, whether
or not every aspect of any such sale is commercially reasonable (to the extent
such sale is permitted by applicable law), or exercise any other right or remedy
the Guaranteed Creditors may have against any Designated Subsidiary Borrower or
any other party, or any security, without affecting or impairing in any way the
liability of the Company hereunder except to the extent the Guaranteed
Obligations have been paid. The Company waives any defense arising out of any
such election by the Guaranteed Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the Company against any Designated Subsidiary Borrower or any other
party or any security.
(b) The Company waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of non-performance,
notices of protest, notices of dishonor, notices of acceptance of this Company
Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. The Company assumes all responsibility for
being and keeping itself informed of each Designated Subsidiary Borrower's
financial condition and assets, and of all other circumstances bearing upon the
risk of non-payment of the Guaranteed Obligations and the nature, scope and
extent of the risks which the Company assumes and incurs hereunder, and agrees
that the Guaranteed Creditors shall have no
77
duty to advise the Company of information known to them regarding such
circumstances or risks.
(c) The Company warrants and agrees that each of the waivers set forth
above in this Section 10.08 is made with full knowledge of its significance and
consequences, and such waivers shall be effective to the maximum extent
permitted by law.
ARTICLE XI
Miscellaneous
Section 11.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (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 facsimile, as follows:
(i) if to the Company, (x) to it at Quanta Capital Holdings Ltd.,
Cumberland House, 0 Xxxxxxxx Xxxxxx, Xxxxxxxx XX 00, Xxxxxxx, Xxxxxxxxx:
Controller (Facsimile: (000) 000-0000) and (y) with a copy to it at Quanta
Capital Holdings Ltd., Cumberland House, 0 Xxxxxxxx Xxxxxx, Xxxxxxxx XX 00,
Xxxxxxx, Xxxxxxxxx: General Counsel (Facsimile: (000) 000-0000;
(ii) if to a Designated Subsidiary Borrower, at the address specified
opposite its signature below;
(iii) if to the Administrative Agent, to JPMorgan Chase Bank, Loan and
Agency Services Group, 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention
of Xxxxxxx Xxxxx (Facsimile No. (000) 000-0000), with a copy to JPMorgan
Chase Bank, 000 Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxx 00000, Attention of
Xxxxxxx Xxxxxxxxx (Facsimile No. (000) 000-0000); and
(iv) if to any other Lender, to it at its address (or facsimile number)
set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to (x) Articles II and III unless otherwise agreed by
the Administrative Agent and the applicable Lender or (y) Section 6.01(d)(x).
The Administrative Agent or the Company 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.
(c) Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
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Section 11.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 11.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the issuance of any Letter of
Credit or the making of any Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time. In the case of any waiver,
each Borrower, the Administrative Agent and the Lenders shall be restored to
their former positions and rights hereunder and any Default or Event of Default
so waived shall be deemed to be cured and not continuing. No such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
(b) Neither this Agreement, any other Credit Document nor any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by each Borrower and the
Required Lenders or by each Borrower and the Administrative Agent with the
consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment or the Revolving Credit Exposure of any Lender without
the written consent of such Lender, (ii) reduce the amount of any amount due
under any Loan or pursuant to any Letter of Credit or reduce any interest or
fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date for payment of any Loan or
reimbursement of any Unpaid Drawing, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of the Commitments, without the
written consent of each Lender affected thereby, (iv) change Section 2.15(b) or
(c) in a manner that would alter the pro rata sharing of payments required
thereby or change any of the provisions of this Section 11.02 or the definition
of "Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender, (v) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the Security
Documents or release the Company from the Company Guaranty, without the written
consent of each Lender or (vi) change any provision of Article III without the
written consent of each LC Issuer affected thereby; and provided, further, that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent or any LC Issuer hereunder without the prior written
consent of the Administrative Agent or such LC Issuer, as the case may be.
Section 11.03. Expenses; Indemnity; Damage Waiver. (a) Each Specified
Obligor jointly and severally agrees to pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of one counsel for the Administrative
Agent, in connection with the syndication of the credit facility provided for
herein, the preparation and administration of this Agreement or any
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amendments, modifications or waivers of the provisions hereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), and (ii)
all out-of-pocket expenses incurred by the Administrative Agent, or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement or the other Credit
Documents, including its rights under this Section, or in connection with the
Loans made hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.
(b) Each Specified Obligor jointly and severally agrees to indemnify
the Administrative Agent, and each Lender, 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 or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or any other transactions contemplated hereby, (ii) any
Loan or Letter of Credit or the use of the proceeds therefrom, (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by any Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to any 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 and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee or any Related
Party of such Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or any Related Party
of such Indemnitee.
(c) To the extent that any Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent 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, in its capacity as such.
(d) To the extent permitted by applicable law, no Borrower shall
assert, and each Borrower 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 or any agreement or instrument
contemplated hereby, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
Section 11.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors
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and assigns permitted hereby except that (i) no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by such
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. 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 paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more banks, investment funds or other
institutions that make or hold commercial loans in the ordinary course of their
businesses all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it) with the prior written consent (such consent not to be unreasonably
withheld) of:
(A) the Company, provided that no consent of the Company shall
be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee; and
(B) the Administrative Agent and each LC Issuer.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment or Loans, the amount of the
Commitment or 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) shall not be less than $5,000,000 unless each of the Company and
the Administrative Agent otherwise consent, provided that no such
consent of the Company shall be required if an Event of Default has
occurred and is continuing;
(B) 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;
(C) 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;
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire;
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(E) the assignee shall be an NAIC Approved Bank that is not
either (x) a foreign branch office of a bank or trust company organized
and existing in the United States or (y) a parent, subsidiary or
affiliate of any Borrower or any beneficiary under any Letter of
Credit; and
(F) if any Several Letters of Credit are then outstanding, no
such assignment shall be effective until all such outstanding Several
Letters of Credit are either amended or returned and reissued, in each
case to give effect to such assignment.
For the purposes of this Section 11.04(b), the term "Approved Fund" has
the following meaning:
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and
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.
(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in
each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this
Agreement (provided that any liability of any Borrower to -------- such
assignee under Section 2.12, 2.13 or 2.14 shall be limited to the amount,
if any, that would have been payable thereunder by such Borrower in the
absence of such assignment, except to the extent any such amounts are
attributable to a Change in Law), 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 Sections 2.12, 2.13, 2.14 and 11.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that
does not comply with this Section 11.04 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 paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices 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 Commitment
of, and principal amount of the Loans and 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 Borrowers, 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 the Borrowers, and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
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(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in
the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(c) (i) Any Lender may, without the consent of any Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
and Unpaid Drawings owing to it); provided that (A) such Lender's obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. 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,
modification or waiver described in the first proviso to Section 11.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, each
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.15(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater payment
under Section 2.12 or 2.14 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 Company's
prior written consent and the entitlement to greater payment results solely from
a Change in Law. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.14 unless the Company
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrowers, to comply with Section 2.14(e) as
though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(e) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an,
"SPC") of such Granting
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Lender, identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Company, the option to provide to the
applicable Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to such Borrower pursuant to Section 2.01,
provided that (i) nothing herein shall constitute a commitment to make any Loan
by any SPC and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by the Granting Lender. Each party
hereto hereby agrees that (x) no SPC shall be liable for any payment under this
Agreement for which a Lender would otherwise be liable and (y) the Granting
Lender for any SPC shall be (and hereby agrees that it is) liable for any
payment under this Agreement for which the SPC would be liable in the absence of
preceding clause (x). In furtherance of the foregoing, each party hereto hereby
agrees that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceedings under the laws of the United States or any State thereof.
In addition, notwithstanding anything to the contrary contained in this Section
11.04 any SPC may (i) with notice to, but without the prior written consent of,
the Company or the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to its Granting
Lender or to any financial institutions (if consented to by the Company and the
Administrative Agent) providing liquidity and/or credit facilities to or for the
account of such SPC to fund the Loans made by such SPC or to support the
securities (if any) issued by such SPC to fund such Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of a surety, guarantee or
credit or liquidity enhancement to such SPC.
Section 11.05. Survival. All covenants, agreements, representations and
warranties made by any Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as any
Letter of Credit is outstanding, the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Total Commitment (and the Commitment of each
Lender) has not expired or terminated. The provisions of Sections 2.12, 2.13,
2.14 and 11.03 and Article IX shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Total Commitment
(and the Commitment of each Lender) or the termination of this Agreement or any
provision hereof.
Section 11.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the
84
Administrative Agent 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 5.01, 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 which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 11.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 11.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
Section 11.09. Governing Law; Jurisdiction; Consent to Service of
Process. This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the non-exclusive jurisdiction of the Supreme
Court 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 for recognition or enforcement of any judgment, and each
of the parties hereto hereby 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 or, to the extent permitted by 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 shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Borrower or its properties in the courts of any
jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this
85
Agreement 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
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in connection with disputes arising out of this Agreement or any other
Credit Document in the manner provided for notices in Section 11.01. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(e) Each Borrower hereby irrevocably designates, appoints and empowers
the Service of Process Agent, with offices on the date hereof at 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and in respect
of its property, service of any and all legal process, summons, notices and
documents which may be served in any such action or proceeding. If for any
reason such designee, appointee and agent shall cease to be available to act as
such, each Borrower agrees to designate a new designee, appointee and agent in
New York City on the terms and for the purposes of this provision reasonably
satisfactory to the Administrative Agent under this Agreement.
Section 11.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY 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 THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 11.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 11.12. Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that (i) the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential in accordance
with the terms of this Agreement and (ii) that the Administrative Agent and each
Lender shall be responsible for any breach of this Section 11.12 by any of its
and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors), (b) to the extent requested by
any regulatory authority or self-regulatory body, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or
86
proceeding relating to this Agreement or the enforcement of rights hereunder,
(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 any Borrower and its
obligations, (g) with the consent of the Company or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a non-confidential basis from a source other than the Company. For the
purposes of this Section, "Information" means all information now or hereafter
received from any Borrower relating to the Company, any Subsidiary of the
Company or their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a non-confidential basis
prior to disclosure by any Borrower. 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 or, in the case of any
Lender, such Lender has treated such Information in a manner consistent with
banking industry standards for the treatment of confidential information.
Notwithstanding anything herein to the contrary, each party to this Agreement
(and any employee, representative or other agent of each such party) may
disclose to any and all persons, without limitation of any kind, the U.S.
federal income tax treatment and the U.S. federal income tax structure of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However, no disclosure of any information relating
to such tax treatment or tax structure may be made to the extent non-disclosure
is reasonably necessary in order to comply with applicable securities laws. The
provisions of this Section 11.12 shall survive the termination of the Total
Commitment (and the Commitment of each Lender) and repayment of the Loans and
other obligations arising hereunder.
Section 11.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
Section 11.14. USA Patriot Act. Each Lender hereby notifies the Company
and each other Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot
Act"), it is required to obtain, verify and record information that identifies
each Borrower, which information includes the name and
87
address of each Borrower and other information that will allow such Lender to
identify each Borrower in accordance with the Patriot Act.
*****
88
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
Address:
--------
Cumberland House QUANTA CAPITAL HOLDINGS LTD.
0 Xxxxxxxx Xxxxxx
Xxxxxxxx XX 00
Xxxxxxx By: /s/ Xxxxxxxx X.X. Xxxx
Attention: Controller -------------------------------
Telephone: (000) 000-0000 Name: Xxxxxxxx X.X Xxxx
Facsimile: (000) 000-0000 Title: Principal Accounting
Officer
Address:
--------
Cumberland House QUANTA REINSURANCE LTD.
0 Xxxxxxxx Xxxxxx
Xxxxxxxx XX 00
Xxxxxxx By: /s/ Xxxxxxxx X.X. Xxxx
Attention: Xxxx X. Xxxxxxxx, Xx. -------------------------------
Facsimile: (000) 000-0000 Name: Xxxxxxxx X.X Xxxx
Title: Principal Accounting
Officer
Address:
--------
00 Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxx XXXXXX X.X. HOLDINGS INC.
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Attention: Xxxx X. Xxxxxxxx, Xx. By: /s/ Xxxx X. Xxxxxxxx Xx.
Facsimile: (000) 000-0000 -------------------------------
Name: Xxxx X. Xxxxxxxx Xx.
Title: Chief Financial Officer
Address:
--------
c/o Quanta U.S. Holdings, Inc. QUANTA SPECIALTY LINES INSURANCE
00 Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxx COMPANY
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America By: /s/ Xxxxxxx Xxxx
Attention: Xxxx X. Xxxxxxxx, Xx. -------------------------------
Facsimile: (000) 000-0000 Name: Xxxxxxx Xxxx
Title: Treasurer
Address:
--------
Cumberland House QUANTA REINSURANCE U.S. LTD.
0 Xxxxxxxx Xxxxxx
Xxxxxxxx XX 00
Xxxxxxx By: /s/ Xxxxxxxx X.X. Xxxx
Attention: Xxxx X. Xxxxxxxx, Xx. -------------------------------
Facsimile: (000) 000-0000 Name: Xxxxxxxx X.X. Xxxx
Title: Principal Accounting
Officer
Address:
--------
c/o Quanta U.S. Holdings, Inc. QUANTA INDEMNITY COMPANY
00 Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 10020
United States of America By: /s/ Xxxxxxx Xxxx
Attention: Xxxx X. Xxxxxxxx, Xx. -------------------------------
Facsimile: (000) 000-0000 Name: Xxxxxxx Xxxx
Title: Treasurer
JPMORGAN CHASE BANK, N.A.,
Individually and as Administrative
Agent
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
SIGNATURE PAGE TO THE CREDIT
AGREEMENT, DATED AS OF JULY 13,
2004 AND AMENDED AND RESTATED AS OF
JULY 11, 2005, AMONG QUANTA CAPITAL
HOLDINGS LTD., THE DESIGNATED
SUBSIDIARY BORROWERS, THE LENDERS
PARTY HERETO FROM TIME TO TIME AND
JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT
NAME OF INSTITUTION:
BNP PARIBAS
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
By: /s/ Laurent Vanderzyppe
--------------------------
Name: Laurent Vanderzyppe
Title: Director
SIGNATURE PAGE TO THE CREDIT
AGREEMENT, DATED AS OF JULY 13,
2004 AND AMENDED AND RESTATED AS OF
JULY 11, 2005, AMONG QUANTA CAPITAL
HOLDINGS LTD., THE DESIGNATED
SUBSIDIARY BORROWERS, THE LENDERS
PARTY HERETO FROM TIME TO TIME AND
JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT
NAME OF INSTITUTION:
CALYON NEW YORK BRANCH
By: /s/ Xxxxxxxxx Xxxxx
--------------------------
Name: Xxxxxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
SIGNATURE PAGE TO THE CREDIT
AGREEMENT, DATED AS OF JULY 13,
2004 AND AMENDED AND RESTATED AS OF
JULY 11, 2005, AMONG QUANTA CAPITAL
HOLDINGS LTD., THE DESIGNATED
SUBSIDIARY BORROWERS, THE LENDERS
PARTY HERETO FROM TIME TO TIME AND
JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT
NAME OF INSTITUTION:
COMERICA BANK
By: /s/ Chatphet Saipetch
--------------------------
Name: Chatphet Saipetch
Title: Assistant Vice
President
SIGNATURE PAGE TO THE CREDIT
AGREEMENT, DATED AS OF JULY 13,
2004 AND AMENDED AND RESTATED AS OF
JULY 11, 2005, AMONG QUANTA CAPITAL
HOLDINGS LTD., THE DESIGNATED
SUBSIDIARY BORROWERS, THE LENDERS
PARTY HERETO FROM TIME TO TIME AND
JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT
NAME OF INSTITUTION:
DEUTSCHE BANK AG NEW YORK
BRANCH
By: /s/ Xxxx Xxxxx
--------------------------
Name: Xxxx Xxxxx
Title: Director
By: /s/ Xxxx X. XxXxxx
--------------------------
Name: Xxxx X. XxXxxx
Title: Director
SIGNATURE PAGE TO THE CREDIT
AGREEMENT, DATED AS OF JULY 13,
2004 AND AMENDED AND RESTATED AS OF
JULY 11, 2005, AMONG QUANTA CAPITAL
HOLDINGS LTD., THE DESIGNATED
SUBSIDIARY BORROWERS, THE LENDERS
PARTY HERETO FROM TIME TO TIME AND
JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT
NAME OF INSTITUTION:
BARCLAYS BANK PLC
By: /s/ Xxxxxxx Xxxx
--------------------------
Name: Xxxxxxx Xxxx
Title: Manager
SIGNATURE PAGE TO THE CREDIT
AGREEMENT, DATED AS OF JULY 13,
2004 AND AMENDED AND RESTATED AS OF
JULY 11, 2005, AMONG QUANTA CAPITAL
HOLDINGS LTD., THE DESIGNATED
SUBSIDIARY BORROWERS, THE LENDERS
PARTY HERETO FROM TIME TO TIME AND
JPMORGAN CHASE BANK, N.A., AS
ADMINISTRATIVE AGENT
NAME OF INSTITUTION:
ING BANK N.V. - London Branch
By: /s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxx Xxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxx
Title: Director
