EXECUTION COPY
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 25, 2005
Among
DAVINCIRE HOLDINGS LTD.
as Borrower
-----------
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
------------------
and
CITIGROUP GLOBAL MARKETS INC.
as Sole Lead Arranger, Book Manager and Syndication Agent
---------------------------------------------------------
and
CITIBANK, N.A.
as Administrative Agent
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TABLE OF CONTENTS
<TABLE>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................................................1
SECTION 1.01. Certain Defined Terms..............................................................1
SECTION 1.02. Computation of Time Periods.......................................................12
SECTION 1.03. Accounting Terms..................................................................12
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES.....................................................................13
SECTION 2.01. The Advances......................................................................13
SECTION 2.02. Making the Advances...............................................................13
SECTION 2.03. Fees .............................................................................14
SECTION 2.04. Termination or Reduction of the Commitments.......................................14
SECTION 2.05. Repayment of Advances.............................................................14
SECTION 2.06. Interest on Advances..............................................................14
SECTION 2.07. Interest Rate Determination.......................................................15
SECTION 2.08. Optional Conversion of Advances...................................................15
SECTION 2.09. Prepayments of Advances...........................................................16
SECTION 2.10. Increased Costs...................................................................16
SECTION 2.11. Illegality........................................................................16
SECTION 2.12. Payments and Computations.........................................................17
SECTION 2.13. Taxes.............................................................................17
SECTION 2.14. Sharing of Payments, Etc..........................................................19
SECTION 2.15. Evidence of Debt..................................................................19
SECTION 2.16. Use of Proceeds...................................................................19
SECTION 2.17. Increase in the Aggregate Commitments.............................................19
SECTION 2.18. Extension of Termination Date.....................................................21
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING..............................................................22
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.............................22
SECTION 3.02. Conditions Precedent to Each Borrowing, Commitment Increase and
Extension Date....................................................................24
SECTION 3.03. Determinations Under Section 3.01.................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................24
SECTION 4.01. Representations and Warranties of the Borrower....................................24
ARTICLE V COVENANTS OF THE BORROWER..............................................................................27
SECTION 5.01. Affirmative Covenants.............................................................27
SECTION 5.02. Negative Covenants................................................................31
ARTICLE VI EVENTS OF DEFAULT.....................................................................................33
SECTION 6.01. Events of Default.................................................................33
ARTICLE VII THE AGENT............................................................................................36
SECTION 7.01. Authorization and Action..........................................................36
SECTION 7.02. Agent's Reliance, Etc.............................................................36
SECTION 7.03. Citibank and Affiliates...........................................................36
SECTION 7.04. Lender Credit Decision............................................................36
SECTION 7.05. Indemnification...................................................................37
SECTION 7.06. Successor Agent...................................................................37
ARTICLE VIII MISCELLANEOUS.......................................................................................37
SECTION 8.01. Amendments, Etc...................................................................37
SECTION 8.02. Notices, Etc......................................................................37
SECTION 8.03. No Waiver; Remedies...............................................................38
SECTION 8.04. Costs and Expenses................................................................38
SECTION 8.05. Right of Set-off..................................................................39
SECTION 8.06. Binding Effect....................................................................39
SECTION 8.07. Assignments and Participations....................................................40
SECTION 8.08. Confidentiality...................................................................41
SECTION 8.09. Governing Law.....................................................................42
SECTION 8.10. Execution in Counterparts.........................................................42
SECTION 8.11. Jurisdiction, Etc.................................................................42
SECTION 8.12. Judgment..........................................................................42
SECTION 8.13. Waiver of Jury Trial..............................................................44
</TABLE>
Schedules
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Schedule I - List of Applicable Lending Offices
Schedule 4.01(a) Jurisdictions
Schedule 4.01(c)(ii) Adverse Changes
Schedule 4.01(d) Litigation and Contingent Liabilities
Schedule 4.01(l) Subsidiaries
Schedule 4.01(m) Insurance Licenses
Schedule 4.01(n) Taxes
Schedule 5.02(g) Liens
Exhibits
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Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Pledge Agreement
Exhibit E - Form of Opinion of Counsel for the Borrower
Exhibit F - Form of Compliance Certificate
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 25, 2005
DAVINCIRE HOLDINGS LTD., a company organized under the laws of
Bermuda (the "Borrower"), the banks, financial institutions and other
institutional lenders (the "Initial Lenders") listed on the signature pages
hereof, CITIGROUP GLOBAL MARKETS INC., as sole lead arranger, book manager and
syndication agent, and CITIBANK, N.A. ("Citibank"), as administrative agent (the
"Agent") for the Lenders (as hereinafter defined), agree as follows:
PRELIMINARY STATEMENT. The Borrower, the lenders party thereto
and Citibank, as agent, are parties to a Credit Agreement dated as of April 19,
2002, as amended and restated as of May 25, 2004 (the "Existing Credit
Agreement"). Subject to the satisfaction of the conditions set forth in Section
3.01, the Borrower, the Lenders party hereto and Citibank, as Agent, desire to
amend and restate the Existing Credit Agreement as herein set forth.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means an advance by a Lender to the Borrower as part of
a Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance (each of which shall be a "Type" of Advance).
"Affiliate" of any Person means any other Person which, directly
or indirectly, controls or is controlled by or is under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall be deemed
to be:
(a) "controlled by" any other Person if such other
Person possesses, directly or indirectly, power: (i) to vote 20%
or more of the securities having at the time of any determination
hereunder voting power for the election of directors of such
Person; or (ii) to direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise; or
(b) "controlled by" or "under common control with" such
other Person if such other Person is the executor, administrator,
or other personal representative of such Person.
"Agent's Account" means the account of the Agent maintained by
the Agent at Citibank at its office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Account No. 00000000, Attention: Bank Loan
Syndications.
"Annual Statement" means the annual financial statement of an
Insurance Subsidiary as required to be filed with the Authority (or
similar Governmental Authority) of such Insurance Subsidiary's
domicile, together with all exhibits or schedules filed therewith,
prepared in conformity with SAP.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate
Advance and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means (a) for Base Rate Advances, 0% per
annum and (b) for Eurodollar Rate Advances, as of any date, a
percentage per annum determined by reference to the Public Debt Rating
in effect on such date as set forth below:
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Public Debt Rating Applicable Margin for
S&P/Xxxxx'x Eurodollar Rate Advances
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Level 1
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A/A2 or above 0.500%
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Level 2
-------
A-/A3 0.625%
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Level 3
-------
BBB+/Baa1 0.700%
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Level 4
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BBB/Baa2 0.850%
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Level 5
-------
BBB-/Baa3 or below 1.000%
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"Applicable Percentage" means, as of any date a percentage per
annum determined by reference to the Public Debt Rating in effect on
such date as set forth below:
-------------------------------- -----------------------------
Public Debt Rating Applicable
S&P/Xxxxx'x Percentage
-------------------------------- -----------------------------
Level 1
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A/A2 or above 0.085%
-------------------------------- -----------------------------
Level 2
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A-/A3 0.100%
-------------------------------- -----------------------------
Level 3
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BBB+/Baa1 0.125%
-------------------------------- -----------------------------
Level 4
-------
BBB/Baa2 0.175%
-------------------------------- -----------------------------
Level 5
-------
BBB-/Baa3 or below 0.250%
-------------------------------- -----------------------------
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Assuming Lender" has the meaning specified in Section 2.17(d).
"Assumption Agreement" has the meaning specified in Section
2.17(d)(ii).
"Authority" means the Bermuda Monetary Authority or similar
Governmental Authority in the applicable jurisdiction.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
the highest of:
(a) the rate of interest announced publicly by Citibank
in New York, New York, from time to time, as Citibank's base
rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of
(i) 1/2 of 1% per annum, plus (ii) the rate obtained by dividing
(A) the latest three-week moving average of secondary market
morning offering rates in the United States for three-month
certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a
year of 360 days) being determined weekly on each Monday (or, if
such day is not a Business Day, on the next succeeding Business
Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of
New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates
2
received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a
percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities consisting
of or including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment
rates estimated by Citibank for determining the then current
annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrowing" means a borrowing consisting of simultaneous Advances
of the same Type made by each of the Lenders pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City or Xxxxxxxx,
Bermuda and, if the applicable Business Day relates to any Eurodollar
Rate Advances, on which dealings are carried on in the London interbank
market, provided that for purposes of determining the Eurodollar Rate
for any Interest Period, such rate may be determined without regard
whether banks are required or authorized to close in Xxxxxxxx, Bermuda.
"Capitalized Lease" means, as to any Person, any lease which is
or should be capitalized on the balance sheet of such Person in
accordance with GAAP, together with any other lease which is in
substance a financing lease, including, without limitation, any lease
under which (a) such Person has or will have an option to purchase the
property subject thereto at a nominal amount or an amount less than a
reasonable estimate of the fair market value of such property as of the
date the lease is entered into or (b) the term of the lease
approximates or exceeds the expected useful life of the property leased
thereunder.
"Catastrophe Bond" means (a) any note, bond or other Debt
instrument or any swap or other similar agreement which has a
catastrophe, weather or other risk feature linked to payments
thereunder and (b) any equity interest in a Person that is not a
Subsidiary controlled, directly or indirectly, by the Borrower for the
sole purpose of investing in Debt of the type described in clause (a),
which, in the case of Catastrophe Bonds purchased by the Borrower or
any of its Subsidiaries, are purchased in accordance with its customary
reinsurance underwriting procedures.
"Change in Control" shall be deemed to have occurred if (a) any
sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of
the Borrower occurs; (b) any "person" as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") other than RenaissanceRe Holdings Ltd., is or becomes,
directly or indirectly, the "beneficial owner," as defined in Rule
13d-3 under the Exchange Act, of securities of the Borrower that
represent 51% or more of the combined voting power of the Borrower's
then outstanding securities; (c) during any period of two consecutive
years, individuals who at the beginning of such period constituted the
Board of Directors of the Borrower (together with any new directors
whose nomination by the Board of Directors or whose election by the
stockholders of the Borrower was approved by a vote of the directors of
the Borrower then still in office who are 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 Borrower's Board of Directors then in office; or (d)
Renaissance Re Holdings Ltd. shall cease for any reason to own,
directly or indirectly, the power to exercise voting control of the
Borrower.
"Commitment" means as to any Lender (a) the amount set forth
opposite such Lender's name on the signature pages hereof, (b) if such
Lender has become a Lender hereunder pursuant to an Assumption
Agreement, the amount set forth in such Assumption Agreement or (c) if
such Lender has entered into any
3
Assignment and Acceptance, the amount set forth for such Lender
in the Register maintained by the Agent pursuant to Section
8.07(d), as such amount may be reduced pursuant to Section 2.04
or increased pursuant to Section 2.17.
"Commitment Date" has the meaning specified in Section 2.17(b).
"Commitment Increase" has the meaning specified in Section
2.17(a).
"Compliance Certificate" means a certificate substantially in the
form of Exhibit F but with such changes as the Agent may from time to
time request for purposes of monitoring the Borrower's compliance
herewith.
"Consenting Lender" has the meaning specified in Section 2.18(b).
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Debt" means the consolidated Debt of the Borrower
and its Subsidiaries, including without limitation the principal amount
of the Advances.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person (outside the ordinary course of
business) guarantees, endorses, acts as surety for or otherwise becomes
or is contingently liable for (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment by, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the Debt, obligation or other liability of any
other Person (other than by endorsements of instruments in the course
of collection), or for the payment of dividends or other distributions
upon the shares of any other Person or undertakes or agrees
(contingently or otherwise) to purchase, repurchase, or otherwise
acquire or become responsible for any Debt, obligation or liability or
any security therefor, or to provide funds for the payment or discharge
thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition of any other Person, or
to make payment or transfer property to any other Person other than for
fair value received; provided, however, that obligations of the
Borrower or any of its Subsidiaries under Primary Policies or
Reinsurance Agreements which are entered into in the ordinary course of
business (including security posted to secure obligations thereunder)
shall not be deemed to be Contingent Liabilities of such Person for the
purposes of this Agreement. The amount of any Person's obligation under
any Contingent Liability shall (subject to any limitation set forth
therein) be deemed to be the lesser of (i) the outstanding principal
amount (or maximum permitted principal amount, if larger) of the Debt,
obligation or other liability guaranteed or supported thereby or (ii)
the maximum stated amount so guaranteed or supported.
"Contractual Obligation" means, relative to any Person, any
obligation, commitment or undertaking under any agreement or other
instrument to which such Person is a party or by which it or any of its
property is bound or subject.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.07 or 2.08.
"DaVinciRe Catastrophe-Linked Security" means any Catastrophe
Bond (of the type described in clause (a) of the definition of
Catastrophe Bond) issued or otherwise entered into by the Borrower or
any of its Insurance Subsidiaries to cede risk which (a) has a
scheduled maturity date after the Termination Date and (b) upon the
occurrence of catastrophe claims under the terms thereof in excess of a
predefined level that is no more remote than a one in 100 (or 1.00%)
year or event, is subject to either (i) mandatory forgiveness of
repayment at least to the extent of such excess or (ii) mandatory
conversion into equity of the Borrower or such Subsidiary at least to
the extent of such excess. The occurrence of forgiveness or conversion
prior to the Termination Date shall not be deemed to violate clause (a)
of the preceding sentence.
4
"Debt" means, with respect to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money or
in respect of loans or advances (including, without limitation, any
such obligation issued by such Person that qualify as Catastrophe Bonds
described in clause (a) of the definition thereof net of any escrow
established (whether directly or to secure any letter of credit issued
to back such Catastrophe Bonds) in connection with such Catastrophe
Bonds); (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in
respect of letters of credit which have been drawn but not reimbursed
by the Person for whose account such letter of credit was issued, and
bankers' acceptances issued for the account of such Person; (d) all
obligations in respect of Capitalized Leases of such Person; (e) all
net Hedging Obligations of such Person; (f) whether or not so included
as liabilities in accordance with GAAP, all obligations of such Person
to pay the deferred purchase price of property or services; (g) Debt of
such Person secured by a Lien on property owned or being purchased by
such Person (including Debt arising under conditional sales or other
title retention agreements) whether or not such Debt is limited in
recourse (it being understood, however, that if recourse is limited to
such property, the amount of such Debt shall be limited to the lesser
of the face amount of such Debt and the fair market value of all
property of such Person securing such Debt); (h) any Debt of another
Person secured by a Lien on any assets of such first Person, whether or
not such Debt is assumed by such first Person (it being understood that
if such Person has not assumed or otherwise become personally liable
for any such Debt, the amount of the Debt of such person in connection
therewith shall be limited to the lesser of the face amount of such
Debt and the fair market value of all property of such Person securing
such Debt); and (i) any Debt of a partnership in which such Person is a
general partner unless such Debt is nonrecourse to such Person;
provided that, notwithstanding anything to contrary contained herein,
Debt shall not include (w) Contingent Liabilities, (x) issued, but
undrawn, letters of credit which have been issued to reinsurance
cedents in the ordinary course of business, (y) unsecured current
liabilities incurred in the ordinary course of business and paid within
90 days after the due date (unless contested diligently in good faith
by appropriate proceedings and, if requested by the Agent, reserved
against in conformity with GAAP) other than liabilities that are for
money borrowed or are evidenced by bonds, debentures, notes or other
similar instruments (except as described in clauses (w) or (x) above)
or (z) any obligations of such Person under any Reinsurance Agreement
or any Primary Policy.
"Debt to Capital Ratio" means the ratio of (a) Consolidated Debt
to (b) the sum of Net Worth plus Consolidated Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement
or the Assignment and Acceptance pursuant to which it became a Lender,
or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$500,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof,
and having total assets in excess of $500,000,000; (v) a commercial
bank organized under the laws of any other country that is a member of
the Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International Monetary
Fund associated with its General Arrangements to Borrow, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency
located in the country in which it is organized or another country that
is described in this clause (v); (vi) the central bank of any country
that is a member of the Organization for Economic Cooperation and
Development; (vii) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $500,000,000; and (viii)
any other Person approved by the Agent and, unless an Event of Default
5
has occurred and is continuing at the time any assignment is effected
in accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither the
Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute, and all
rules and regulations from time to time promulgated thereunder.
"ERISA Affiliate" means any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under
"common control" with, or a member of the same "controlled group" as,
the Borrower or any of its Subsidiaries, within the meaning of Sections
414(b), (c), (m) or (o) of the Internal Revenue Code or Section 4001 of
ERISA.
"ERISA Event" means any of the following with respect to a Plan
or Multiemployer Plan, as applicable: (a) a Reportable Event with
respect to a Plan or a Multiemployer Plan, (b) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan that results in liability under Section 4201 or 4204 of ERISA, or
the receipt by the Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, (c) the distribution by the
Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of
a notice of intent to terminate any Plan or the taking of any action to
terminate any Plan, (d) the commencement of proceedings by the PBGC
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the Borrower or
any ERISA Affiliate of a notice from any Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan, (e) the institution of a proceeding by any fiduciary of any
Multiemployer Plan against the Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which is not dismissed within thirty (30)
days, or (f) the imposition upon the Borrower or any ERISA Affiliate of
any liability under Title IV of ERISA, other than for PBGC premiums due
but not delinquent under Section 4007 of ERISA, or the imposition or
threatened imposition of any Lien upon any assets of the Borrower or
any ERISA Affiliate as a result of any alleged failure to comply with
the Internal Revenue Code or ERISA in respect of any Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement
or the Assignment and Acceptance pursuant to which it became a Lender
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum) appearing on Moneyline Telerate
Markets Page 3750 (or any successor page) as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period or, if for any
reason such rate is not available, the rate per annum at which deposits
in U.S. dollars are offered by the principal office of Citibank in
London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to Citibank's
Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage for such Interest Period. If the Moneyline
Telerate Markets Page 3750 (or any successor page) is unavailable, the
Eurodollar Rate for any Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing shall be determined by
the Agent on the basis of the applicable rate furnished to and received
by the Agent from Citibank two Business Days before the first day of
such Interest Period, subject, however, to the provisions of Section
2.07.
6
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Executive Officer" means, as to any Person, the president, the
chief financial officer, the chief executive officer, the general
counsel, the treasurer or the secretary.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statement.
"Extension Date" has the meaning specified in Section 2.18(b).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar
months ending on the last day of December.
"Foreign Plan" has the meaning specified in Section 4.01(e)(ii).
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" means generally accepted accounting principles in the
United States set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances
as of the date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative powers
or functions of or pertaining to government.
"Hedging Obligations" means, with respect to any Person, the net
liability of such Person under any futures contract or options contract
(including property catastrophe futures and options), interest rate
swap agreements and interest rate collar agreements and all other
agreements or arrangements (other than Retrocession Agreements and
Catastrophe Bonds) designed to protect such Person against catastrophic
events, fluctuations in interest rates or currency exchange rates.
7
"Increase Date" has the meaning specified in Section 2.17(a).
"Increasing Lender" has the meaning specified in Section 2.17(b).
"Insurance Code" means, with respect to any Insurance Subsidiary,
the Insurance Code or law of such Insurance Subsidiary's domicile and
any successor statute of similar import, together with the regulations
thereunder, as amended or otherwise modified and in effect from time to
time. References to sections of the Insurance Code shall be construed
to also refer to successor sections.
"Insurance Policies" means policies purchased from insurance
companies by the Borrower or any of its Subsidiaries, for its own
account to insure against its own liability and property loss
(including, without limitation, casualty, liability and workers'
compensation insurance), other than Retrocession Agreements.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, with respect to Eurodollar Rate
Advances, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Agent not
later than 11:00 A.M. (New York City time) on the third Business Day
prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance that ends after any
principal repayment installment date unless, after giving effect
to such selection, the aggregate principal amount of Base Rate
Advances and of Eurodollar Rate Advances having Interest Periods
that end on or prior to such principal repayment installment date
shall be at least equal to the aggregate principal amount of
Advances due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day;
and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there is
no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Insurance Subsidiary" means any Subsidiary of the Borrower which
is licensed by any Governmental Authority to engage in the insurance
business by issuing Primary Policies or entering into Reinsurance
Agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
8
"Invested Assets" means cash, cash equivalents, short term
investments, investments held for sale and any other assets which are
treated as investments under GAAP, provided that Catastrophe Bonds
shall not be deemed to be Invested Assets.
"Lenders" means the Initial Lenders, each Assuming Lender that
shall become a party hereto pursuant to Section 2.17 and each Person
that shall become a party hereto pursuant to Section 8.07.
"Lien" means, when used with respect to any Person, any interest
in any real or personal property, asset or other right held, owned or
being purchased or acquired by such Person for its own use, consumption
or enjoyment which secures payment or performance of any obligation and
shall include any mortgage, lien, pledge, encumbrance, charge, retained
title of a conditional vendor or lessor, or other security agreement,
mortgage, deed of trust, chattel mortgage, assignment, pledge,
retention of title, financing or similar statement or notice, or other
encumbrance arising as a matter of law, judicial process or otherwise.
"Loan Documents" means this Agreement, each Note, the Pledge
Agreement and all other agreements, instruments, certificates,
documents, schedules or other written indicia delivered by the Borrower
or any of its Subsidiaries in connection with any of the foregoing.
"Material Adverse Effect" means the occurrence of an event
(including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding) which has or could reasonably
be expected to have a materially adverse effect on (a) the assets,
business, financial condition or operations of the Borrower and its
Subsidiaries taken as a whole; or (b) the ability of the Borrower to
perform any of its payment or other material obligations under any of
the Loan Documents; or (c) the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document that by its
terms purports to bind the Borrower.
"Material Insurance Subsidiary" means an Insurance Subsidiary
that is also a Material Subsidiary.
"Material Subsidiary" means (a) DaVinci Reinsurance Ltd. and (b)
each other Subsidiary of the Borrower that either (i) as of the end of
the most recently completed Fiscal Year of the Borrower for which
audited financial statements are available, has assets that exceed 10%
of the total consolidated assets of the Borrower and all its
Subsidiaries as of the last day of such period or (ii) for the most
recently completed Fiscal Year of the Borrower for which audited
financial statements are available, has revenues that exceed 10% of the
consolidated revenue of the Borrower and all of its Subsidiaries for
such period.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make, contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make, contributions.
"Net Worth" means, as to any Person, the sum (without
duplication) of (a) the shareholders equity, calculated in accordance
with GAAP, plus (b) any preferred shares of the such Person and its
consolidated Subsidiaries which shall not be redeemable before the
Termination Date.
"Non-Consenting Lender" has the meaning specified in Section
2.18(b).
"Note" means a promissory note of the Borrower payable to the
order of any Lender, delivered pursuant to a request made under Section
2.15 in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from
the Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Ordinary Course Litigation" is defined in Section 4.01(d).
9
"Organization Documents" means, (a) with respect to any company
or corporation, the certificate or articles of incorporation, and the
bylaws (or equivalent of comparable constitutive documents with respect
to any non-U.S. jurisdiction), any certificate of determination or
instrument relating to the rights of preferred shareholders of such
company or corporation, and any shareholder rights agreement; (b) with
respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with
respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable
agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable,
any certificate or articles of formation or organization of such
entity.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Investment" means, at any time:
(a) any evidence of Debt issued or guaranteed by the
United States Government;
(b) commercial paper, maturing not more than one year
from the date of issue, which is issued by (i) a corporation
(except an Affiliate of the Borrower) rated at least A-2 by S&P,
P-2 by Moody's or D-2 by Duff & Xxxxxx Credit Rating Company, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers' acceptance
or eurodollar time deposit, maturing not more than one year after
the date of issue, which is issued by either (i) a financial
institution which is rated at least BBB- by S&P or Duff & Xxxxxx
Credit Rating Company or Baa3 by Moody's or 2 or above by the
National Association of Insurance Commissioners, or (ii) any
Lender;
(d) any repurchase agreement with a term of one year or
less which (i) is entered into with (A) any Lender, or (B) any
other commercial banking institution of the stature referred to
in clause (c)(i), and (ii) is secured by a fully perfected Lien
in any obligation of the type described in any of clauses (a)
through (c) that has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase
obligation of such Lender (or other commercial banking
institution) thereunder;
(e) investments in money market funds that invest
solely in Permitted Investments described in clauses (a) through
(d);
(f) investments in short-term asset management accounts
offered by any Lender for the purpose of investing in loans to
any corporation (other than an Affiliate of the Borrower)
organized under the laws of any state of the United States or of
the District of Columbia and rated at least A-1 by S&P or P-1 by
Moody's;
(g) investments in non-equity securities which are
rated at least BBB- by S&P or Duff & Xxxxxx Credit Rating Company
or Baa3 by Moody's or 2 or above by the National Association of
Insurance Commissioners;
(h) investments in non-equity securities which are not
rated but are determined by the Borrower's investment managers to
be of comparable quality to investments permitted under clause
(g); provided, however, that as promptly as practicable upon
receipt of a written notice from the Agent or the Required
Lenders stating that an investment is not permitted under this
clause (h), the Borrower shall sell such investment; and
10
(i) investments in preferred equity interests issued by
Renaissance Investment Holdings Ltd., provided that the assets
thereof are invested solely in Permitted Investments described in
clauses (a) through (h).
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity,
or a government or any political subdivision or agency thereof.
"Plan" means any "employee pension benefit plan", within the
meaning of Section 3(2) of ERISA that is subject to the provisions of
Title IV of ERISA (other than a Multiemployer Plan) and to which the
Borrower or any ERISA Affiliate may have any liability.
"Pledge Agreement" has the meaning specified in Section 3.01.
"Primary Policies" means any insurance policies issued by an
Insurance Subsidiary.
"Public Debt Rating" means, as of any date, the lowest rating
that has been most recently announced by either S&P or Moody's, as the
case may be, for any class of non-credit enhanced long-term senior
unsecured debt issued by the Borrower. For purposes of the foregoing,
(a) if only one of S&P and Moody's shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Percentage shall be
determined by reference to the available rating; (b) if neither S&P nor
Moody's shall have in effect a Public Debt Rating, the Applicable
Margin and the Applicable Percentage will be set two levels below the
Financial Strength Rating for DaVinci Reinsurance Ltd. issued by either
S&P or Moody's (e.g., a Financial Strength Rating of "A" issued by S&P
would equate to an implied senior unsecured debt rating of BBB+ ); (c)
if the ratings established by S&P and Moody's shall fall within
different levels, the Applicable Margin and the Applicable Percentage
shall be based upon the higher rating, unless the difference between
such ratings is two or more levels, in which case the Applicable Margin
and the Applicable Percentage shall be based upon the rating that is
one level below the higher of such ratings; (d) if any rating
established by S&P or Moody's shall be changed, such change shall be
effective as of the date on which such change is first announced
publicly by the rating agency making such change; and (e) if S&P or
Moody's shall change the basis on which ratings are established, each
reference to the Public Debt Rating announced by S&P or Moody's, as the
case may be, shall refer to the then equivalent rating by S&P or
Moody's, as the case may be.
"Register" has the meaning specified in Section 8.07(d).
"Regulator" means (a) with respect to Bermuda, the Bermuda
Monetary Authority and (b) with respect to any other jurisdiction, the
similar Governmental Authority in the applicable jurisdiction.
"Reinsurance Agreements" means any agreement, contract, treaty,
certificate or other arrangement whereby the Borrower or any Subsidiary
agrees to assume from or reinsure an insurer or reinsurer all or part
of the liability of such insurer or reinsurer under a policy or
policies of insurance issued by such insurer or reinsurer, including
(for purposes of this Agreement) Catastrophe Bonds.
"Reportable Event" means (a) any "reportable event" within the
meaning of Section 4043(c) of ERISA for which the 30-day notice under
Section 4043(a) of ERISA has not been waived by the PBGC (including any
failure to meet the minimum funding standard of, or timely make any
required installment under, Section 412 of the Code or Section 302 of
ERISA, regardless of the issuance of any waivers in accordance with
Section 412(d) of the Internal Revenue Code), (b) any such "reportable
event" subject to advance notice to the PBGC under Section 4043(b)(3)
of ERISA, (c) any application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code, and (d) a
cessation of operations described in Section 4062(e) of ERISA.
11
"Required Lenders" means at any time Lenders owed at least a
majority in interest of the then aggregate unpaid principal amount of
the Advances owing to Lenders, or, if no such principal amount is then
outstanding, Lenders having at least a majority in interest of the
Commitments.
"Requirement of Law" for any Person means the Organization
Documents of such Person, and any law, treaty, rule, ordinance or
regulation or determination of an arbitrator or a court or other
governmental authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Retrocession Agreement" means any agreement, treaty, certificate
or other arrangement whereby any Insurance Subsidiary cedes to another
insurer all or part of such Insurance Subsidiary's liability under a
policy or policies of insurance reinsured by such Insurance Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SAP" means, as to each Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the Authority (or other
similar authority) in such Insurance Subsidiary's domicile for the
preparation of Annual Statements and other financial reports by
insurance corporations of the same type as such Insurance Subsidiary.
"Shareholders Agreement" means the Amended and Restated
Shareholders Agreement dated as of December 20, 2001 among the
Borrower, DaVinci Reinsurance Ltd. and the shareholders listed form
time to time to Schedule I thereto.
"Statutory Financial Statements" is defined in Section 4.01(b).
"Subsidiary" means a Person of which the indicated Person and/or
its other Subsidiaries, individually or in the aggregate, own, directly
or indirectly, such number of outstanding shares or other equity
interests as have at the time of any determination hereunder more than
50% of the ordinary voting power. Unless otherwise specified,
"Subsidiary" means a Subsidiary of the Borrower.
"Termination Date" means the earlier of May 25, 2010, as such
date may be extended pursuant to Section 2.18 and the date of
termination in whole of the Commitments pursuant to Section 2.04 or
6.01; provided, however, that the Termination Date of any Lender that
is a Non-Consenting Lender to any requested extension pursuant to
Section 2.18 shall be the Termination Date in effect immediately prior
to the applicable Extension Date for all purposes of this Agreement.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. Unless otherwise defined or the context
otherwise requires, all financial and accounting terms used herein or in any of
the Loan Documents or any certificate or other document made or delivered
pursuant hereto shall be defined in accordance with GAAP or SAP, as the context
may require. When used in this Agreement, the term "financial statements" shall
include the notes and schedules thereto. In addition, when used herein, the
terms "best knowledge of" or "to the best knowledge of" any Person shall mean
matters within the actual knowledge of such Person (or an Executive Officer or
general partner of such Person) or which should have been known by such Person
after reasonable inquiry.
12
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make Advances to the Borrower from time
to time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Commitment. Each Borrowing shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Within the limits of each Lender's
Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to
Section 2.09 and reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made on
notice, given not later than (x) 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York
City time) on the first Business Day prior to the date of the proposed Borrowing
in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to
the Agent, which shall give to each Lender prompt notice thereof by telecopier
or telex. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by
telephone, confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii)
aggregate amount of such Borrowing, and (iv) in the case of a Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Lender shall, before 11:00 A.M. (New York City time) on the date
of such Borrowing make available for the account of its Applicable Lending
Office to the Agent at the Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent's address
referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000
or if the obligation of the Lenders to make Eurodollar Rate Advances shall then
be suspended pursuant to Section 2.07 or 2.11 and (ii) the Eurodollar Rate
Advances may not be outstanding as part of more than six separate Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on
the Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Agent such Lender's ratable portion of such Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such Borrowing in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Advances comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
13
(e) The failure of any Lender to make the Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Fees. (a) Commitment Fee. The Borrower agrees to pay to
the Agent for the account of each Lender a commitment fee on the aggregate
amount of such Lender's unused Commitment from the date hereof in the case of
each Initial Lender and from the effective date specified in the Assumption
Agreement or in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date at a rate per
annum equal to the Applicable Percentage in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing June 30, 2005, and on the Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.04. Termination or Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least three Business Days'
notice to the Agent, to terminate in whole or permanently reduce ratably in part
the unused portions of the respective Commitments of the Lenders, provided that
each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b) Mandatory. On the fourth anniversary of the Effective Date,
if the Required Lenders have made the amortization election in
accordance with Section 2.05 prior to such date, and on each date that
is three months or a multiple of three months after such fourth
anniversary, the Commitments of the Lenders shall be automatically and
permanently reduced on a pro rata basis by $5,000,000 on each such
date.
SECTION 2.05. Repayment of Advances. The Borrower shall repay to the
Agent for the ratable account of the Lenders on the Termination Date the
aggregate principal amount of the Advances then outstanding. In addition, if the
Agent, at the direction of the Required Lenders, gives the Borrower notice not
later than 60 days prior to the fourth anniversary of the Effective Date that
the Commitments of the Lenders will amortize as set forth in Section 2.04(b),
the Borrower shall, on each such Business Day, repay to the Agent for the
ratable account of the Lenders the amount by which the aggregate principal
amount of the Advances exceeds the aggregate Commitments after giving effect to
such reduction on such day, together with accrued interest to the date of such
payment on the principal amount so repaid.
SECTION 2.06. Interest on Advances. (a) Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Advance owing
to each Lender from the date of such Advance until such principal amount shall
be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(x) the Base Rate in effect from time to time plus (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on
the last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or
paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x)
the Eurodollar Rate for such Interest Period for such Advance plus (y)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of
such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Agent may, and upon the request of the
Required Lenders shall, require the Borrower to pay interest ("Default
Interest") on (i) the unpaid principal amount of each Advance owing to each
Lender, payable in arrears on the dates
14
referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (a)(i) above, provided, however, that following
acceleration of the Advances pursuant to Section 6.01, Default Interest shall
accrue and be payable hereunder whether or not previously required by the Agent.
SECTION 2.07. Interest Rate Determination. (a) Citibank agrees to
furnish to the Agent timely information for the purpose of determining each
Eurodollar Rate. The Agent shall give prompt notice to the Borrower and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.06(a)(i) or (ii), and the rate, if any, furnished by Citibank for the
purpose of determining the interest rate under Section 2.06(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Agent that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event
of Default, (i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance
and (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
(f) If Moneyline Telerate Markets Page 3750 (or any successor
page) is unavailable and Citibank shall fail to furnish timely information to
the Agent for determining the Eurodollar Rate for any Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and the
Lenders that the interest rate cannot be determined for such
Eurodollar Rate Advances,
(ii) each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance (or if any Advance is then a Base Rate
Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate
Advances or to Convert Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist.
SECTION 2.08. Optional Conversion of Advances. The Borrower may on any
Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and 2.11, Convert all
Advances of one Type comprising the same
15
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b) and no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b). Each such notice of a Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted, and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for each such
Advance. Each notice of Conversion shall be irrevocable and binding on the
Borrower.
SECTION 2.09. Prepayments of Advances. The Borrower may, upon notice at
least two Business Days' prior to the date of such prepayment, in the case of
Eurodollar Rate Advances, and not later than 11:00 A.M. (New York City time) on
the date of such prepayment, in the case of Base Rate Advances, to the Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, prepay the outstanding principal
amount of the Advances comprising part of the same Borrowing in whole or ratably
in part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(c).
SECTION 2.10. Increased Costs. (a) If, after the Effective Date, due to
either (i) the introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Advances (excluding for
purposes of this Section 2.10 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (ii) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower and the Agent by such Lender, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) introduced after
the Effective Date affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend hereunder and other commitments of
this type, then, upon demand by such Lender (with a copy of such demand to the
Agent), the Borrower shall pay to the Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such circumstances,
to the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower and the Agent by such
Lender shall be conclusive and binding for all purposes, absent manifest error.
(c) 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 Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs incurred more than 90 days prior to the date that such Lender notifies the
Borrower and the Agent of any event described in paragraph (a) or (b) of this
Section (a "Change in Law") which gives rise to such increased costs and of such
Lender's intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs is retroactive, then the
90-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.11. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for any Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate
16
Advances hereunder, (a) each Eurodollar Rate Advance of such Lender will
automatically, upon such demand, Convert into a Base Rate Advance and (b) the
obligation of such Lender to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and such Lender that the circumstances causing such
suspension no longer exist.
SECTION 2.12. Payments and Computations. (a) The Borrower shall make
each payment hereunder, irrespective of any right of counterclaim or set-off,
not later than 1:00 P.M. (New York City time) on the day when due in U.S.
dollars to the Agent at the Agent's Account in same day funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest or fees ratably (other than amounts payable pursuant to
Section 2.10, 2.11, 2.13 or 8.04(c)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon any Assuming Lender becoming a Lender hereunder as
a result of a Commitment Increase pursuant to Section 2.17 or an extension of
the Termination Date pursuant to Section 2.18, and upon the Agent's receipt of
such Lender's Assumption Agreement and recording of the information contained
therein in the Register, from and after the applicable Increase Date or
Extension Date, as the case may be, the Agent shall make all payments hereunder
and under any Notes issued in connection therewith in respect of the interest
assumed thereby to the Assuming Lender. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.07(c), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
and all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate and of fees shall be made by the Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fee, as the case
may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes. (a) Any and all payments by the Borrower to or for
the account of any Lender or the Agent hereunder or under the Notes or any other
documents to be delivered hereunder shall be made, in accordance with Section
2.12 or the applicable provisions of such other documents, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed on its
overall net income, and taxes imposed on it in lieu of net income taxes, by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its overall net
17
income, and taxes imposed on it in lieu of net income taxes, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or any other documents to be delivered hereunder to any Lender or the
Agent, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.13) such Lender or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
any other documents to be delivered hereunder or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes or any other documents to be delivered hereunder (hereinafter
referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for
and hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.13) imposed on or paid by such Lender or
the Agent (as the case may be) and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or the Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment to the
extent such a receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Agent.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender and on the date of the
Assumption Agreement or the Assignment and Acceptance pursuant to which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter as reasonably requested in writing by the Borrower (but only so long
as such Lender remains lawfully able to do so), shall provide each of the Agent
and the Borrower with two original Internal Revenue Service forms W-8BEN or
W-8ECI, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes. If the form provided by a Lender at the time such Lender
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the Assignment
and Acceptance pursuant to which a Lender assignee becomes a party to this
Agreement, the Lender assignor was entitled to payments under subsection (a) in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date. If any form or document referred to
in this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service form W-8BEN or W-8ECI, that the Lender
reasonably considers to be confidential, the Lender shall give notice thereof to
the Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form, certificate or other document
described in Section 2.13(e) (other than if such failure is due to a change in
law, or in the interpretation or application thereof, occurring subsequent to
the date on which a form, certificate or other document originally was required
to be provided, or if such form, certificate or other document otherwise is not
required under subsection (e) above), such Lender shall not be entitled to
indemnification under
18
Section 2.13(a) or (c) with respect to Taxes imposed by the United States by
reason of such failure; provided, however, that should a Lender become subject
to Taxes because of its failure to deliver a form, certificate or other document
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.13 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.10, 2.11, 2.13 or 8.04(c)) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.15. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower
(with a copy of such notice to the Agent) to the effect that a Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Commitment
of such Lender.
(b) The Register maintained by the Agent pursuant to
Section 8.07(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii)
the terms of each Assumption Agreement and each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iv) the amount of any sum received by the Agent from the Borrower
hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register
pursuant to subsection (b) above, and by each Lender in its account or accounts
pursuant to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement.
SECTION 2.16. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
general corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.17. Increase in the Aggregate Commitments. (a) The Borrower
may, at any time but in any event not more than once, by notice to the Agent,
request that the aggregate amount of the Commitment be increased by an
19
amount of not less than $10,000,000 (a "Commitment Increase") to be effective as
of a date (the "Increase Date") that is at least 90 days prior to the scheduled
Termination Date then in effect, as specified in the related notice to the
Agent; provided, however that (i) in no event shall the aggregate amount of the
Commitments at any time exceed $125,000,000 and (ii) on the date of any request
by the Borrower for a Commitment Increase and on the related Increase Date, (A)
the Borrower's Public Debt Rating shall be not lower than A from S&P and A2 from
Xxxxx'x and (B) the conditions set forth in Section 3.02 shall be satisfied.
(b) The Agent shall promptly notify the Lenders of a request
by the Borrower for a Commitment Increase, which notice shall include (i) the
proposed amount of such requested Commitment Increase, (ii) the proposed
Increase Date and (iii) the date (the "Commitment Date") by which Lenders
wishing to participate in the Commitment Increase must commit to an increase in
the amount of their respective Commitments. Each Lender that is willing to
participate in such requested Commitment Increase (each an "Increasing Lender")
shall, in its sole discretion, give written notice to the Agent on or prior to
the Commitment Date of the amount by which it is willing to increase its
Commitment. If the Lenders notify the Agent that they are willing to increase
the amount of their respective Commitments by an aggregate amount that exceeds
the amount of the requested Commitment Increase, the requested Commitment
Increase shall be allocated among the Lenders willing to participate therein in
such amounts as are agreed between the Borrower and the Agent; provided,
however, that in no event shall the commitment of any Lender be increased by an
amount greater than the amount of increase such Lender has notified the Agent is
acceptable to such Lender.
(c) Promptly following the Commitment Date, the Agent shall
notify the Borrower as to the amount, if any, by which the Lenders are willing
to participate in the requested Commitment Increase. If the aggregate amount by
which the Lenders are willing to participate in any requested Commitment
Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Lenders as of the Commitment Date; provided, however,
that the Commitment of each such Eligible Assignee shall be in an amount of
$5,000,000 or more.
(d) On the Increase Date, each Eligible Assignee that accepts
an offer to participate in a requested Commitment Increase in accordance with
Section 2.17(c) (each such Eligible Assignee and each Eligible Assignee that
agrees to an extension of the Termination Date in accordance with Section
2.18(c), an "Assuming Lender") shall become a Lender party to this Agreement as
of such Increase Date and the Commitment of each Increasing Lender for such
requested Commitment Increase shall be so increased by such amount (or by the
amount allocated to such Lender pursuant to the last sentence of Section
2.17(b)) as of such Increase Date; provided, however, that the Agent shall have
received on or before such Increase Date the following, each dated such date:
(i) (A) certified copies of resolutions of the Board of
Directors of the Borrower or the Executive Committee of such Board
approving the Commitment Increase and the corresponding modifications
to this Agreement and (B) an opinion of counsel for the Borrower
(which may be in-house counsel), in substantially the form of Exhibit
E hereto;
(ii) an assumption agreement from each Assuming Lender, if any,
in form and substance satisfactory to the Borrower and the Agent (each
an "Assumption Agreement"), duly executed by such Eligible Assignee,
the Agent and the Borrower; and
(iii) confirmation from each Increasing Lender of the increase
in the amount of its Commitment in a writing satisfactory to the
Borrower and the Agent.
On each Increase Date, upon fulfillment of the conditions set
forth in the immediately preceding sentence of this Section 2.17(d), the Agent
shall notify the Lenders (including, without limitation, each Assuming Lender)
and the Borrower, on or before 1:00 P.M. (New York City time), by telecopier or
telex, of the occurrence of the Commitment Increase to be effected on such
Increase Date and shall record in the Register the relevant information with
respect to each Increasing Lender and each Assuming Lender on such date.
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SECTION 2.18. Extension of Termination Date. (a) At least 35 days but
not more than 50 days prior to each anniversary of the Effective Date, the
Borrower, by written notice to the Agent, may request an extension of the
Termination Date in effect at such time by one year from its then scheduled
expiration. The Agent shall promptly notify each Lender of such request, and
each Lender shall in turn, in its sole discretion, not later than 20 days prior
to such anniversary date, notify the Borrower and the Agent in writing as to
whether such Lender will consent to such extension. If any Lender shall fail to
notify the Agent and the Borrower in writing of its consent to any such request
for extension of the Termination Date at least 20 days prior to the applicable
anniversary date, such Lender shall be deemed to be a Non-Consenting Lender with
respect to such request. The Agent shall notify the Borrower not later than 15
days prior to the applicable anniversary date of the decision of the Lenders
regarding the Borrower's request for an extension of the Termination Date.
(b) If all the Lenders consent in writing to any such request
in accordance with subsection (a) of this Section 2.18, the Termination Date in
effect at such time shall, effective as at the applicable anniversary of the
Effective Date (the "Extension Date"), be extended for one year; provided that
on each Extension Date the applicable conditions set forth in Section 3.02 shall
be satisfied. If less than all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.18, the Termination
Date in effect at such time shall, effective as at the applicable Extension Date
and subject to subsection (d) of this Section 2.18, be extended as to those
Lenders that so consented (each a "Consenting Lender") but shall not be extended
as to any other Lender (each a "Non-Consenting Lender"). To the extent that the
Termination Date is not extended as to any Lender pursuant to this Section 2.18
and the Commitment of such Lender is not assumed in accordance with subsection
(c) of this Section 2.18 on or prior to the applicable Extension Date, the
Commitment of such Non-Consenting Lender shall automatically terminate in whole
on such unextended Termination Date without any further notice or other action
by the Borrower, such Lender or any other Person; provided that such
Non-Consenting Lender's rights under Sections 2.11, 2.14 and 8.04, and its
obligations under Section 7.05, shall survive the Termination Date for such
Lender as to matters occurring prior to such date. It is understood and agreed
that no Lender shall have any obligation whatsoever to agree to any request made
by the Borrower for any requested extension of the Termination Date.
(c) If less than all of the Lenders consent to any such
request pursuant to subsection (a) of this Section 2.18, the Agent shall
promptly so notify the Consenting Lenders, and each Consenting Lender may, in
its sole discretion, give written notice to the Agent not later than 10 days
prior to the applicable anniversary of the Effective Date of the amount of the
Non-Consenting Lenders' Commitments for which it is willing to accept an
assignment. If the Consenting Lenders notify the Agent that they are willing to
accept assignments of Commitments in an aggregate amount that exceeds the amount
of the Commitments of the Non-Consenting Lenders, such Commitments shall be
allocated among the Consenting Lenders willing to accept such assignments in
such amounts as are agreed between the Borrower and the Agent. If after giving
effect to the assignments of Commitments described above there remains any
Commitments of Non-Consenting Lenders, the Borrower may arrange for one or more
Consenting Lenders or other Eligible Assignees as Assuming Lenders to assume,
effective as of the Extension Date, any Non-Consenting Lender's Commitment and
all of the obligations of such Non-Consenting Lender under this Agreement
thereafter arising, without recourse to or warranty by, or expense to, such
Non-Consenting Lender; provided, however, that the amount of the Commitment of
any such Assuming Lender as a result of such substitution shall in no event be
less than $5,000,000 unless the amount of the Commitment of such Non-Consenting
Lender is less than $5,000,000, in which case such Assuming Lender shall assume
all of such lesser amount; and provided further that:
(i) any such Consenting Lender or Assuming Lender shall have
paid to such Non-Consenting Lender (A) the aggregate principal amount
of, and any interest accrued and unpaid to the effective date of the
assignment on, the outstanding Advances, if any, of such
Non-Consenting Lender plus (B) any accrued but unpaid facility fees
owing to such Non-Consenting Lender as of the effective date of such
assignment;
(ii) all additional costs reimbursements, expense
reimbursements and indemnities payable to such Non-Consenting Lender,
and all other accrued and unpaid amounts owing to such Non-Consenting
Lender hereunder, as of the effective date of such assignment shall
have been paid to such Non-Consenting Lender; and
21
(iii) with respect to any such Assuming Lender, the applicable
processing and recordation fee required under Section 8.07(a) for such
assignment shall have been paid;
provided further that such Non-Consenting Lender's rights under Sections 2.11,
2.14 and 8.04, and its obligations under Section 7.05, shall survive such
substitution as to matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such Assuming Lender,
if any, shall have delivered to the Borrower and the Agent an Assumption
Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender,
the Borrower and the Agent, (B) any such Consenting Lender shall have delivered
confirmation in writing satisfactory to the Borrower and the Agent as to the
increase in the amount of its Commitment and (C) each Non-Consenting Lender
being replaced pursuant to this Section 2.18 shall have delivered to the Agent
any Note or Notes held by such Non-Consenting Lender. Upon the payment or
prepayment of all amounts referred to in clauses (i), (ii) and (iii) of the
immediately preceding sentence, each such Consenting Lender or Assuming Lender,
as of the Extension Date, will be substituted for such Non-Consenting Lender
under this Agreement and shall be a Lender for all purposes of this Agreement,
without any further acknowledgment by or the consent of the other Lenders, and
the obligations of each such Non-Consenting Lender hereunder shall, by the
provisions hereof, be released and discharged.
(d) If (after giving effect to any assignments or assumptions
pursuant to subsection (c) of this Section 2.18) Lenders having Commitments
equal to at least 50% of the Commitments in effect immediately prior to the
Extension Date consent in writing to a requested extension (whether by execution
or delivery of an Assumption Agreement or otherwise) not later than one Business
Day prior to such Extension Date, the Agent shall so notify the Borrower, and,
subject to the satisfaction of the conditions in Section 3.02, the Termination
Date then in effect shall be extended for the additional one year period as
described in subsection (a) of this Section 2.18, and all references in this
Agreement, and in the Notes, if any, to the "Termination Date" shall, with
respect to each Consenting Lender and each Assuming Lender for such Extension
Date, refer to the Termination Date as so extended. Promptly following each
Extension Date, the Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) of the extension of the scheduled Termination
Date in effect immediately prior thereto and shall thereupon record in the
Register the relevant information with respect to each such Consenting Lender
and each such Assuming Lender.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied:
(a) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of any Loan Document or the consummation of
the transactions contemplated hereby.
(b) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, and no law
or regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(c) The Borrower shall have notified each Lender and the Agent
in writing as to the proposed Effective Date.
(d) The Borrower shall have paid all accrued fees and expenses
of the Agent and the Lenders (including the accrued fees and expenses
of counsel to the Agent).
22
(e) On the Effective Date, the following statements shall be true
and the Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated
the Effective Date, stating that:
(i) The representations and warranties contained in each
Loan Document are correct on and as of the Effective Date (except
any representation that speaks as of a specified prior date),
(ii) No event has occurred and is continuing that
constitutes a Default, and
(iii) To the best of such officer's knowledge, since
December 31, 2004, there shall not have occurred a material
adverse change in the assets, business, financial condition,
operations or prospects of the Borrower and its Subsidiaries
taken as a whole.
(f) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:
(i) The Notes to the order of the Lenders to the extent
requested by any Lender pursuant to Section 2.15.
(ii) A pledge agreement in substantially the form of
Exhibit D hereto (as amended, the "Pledge Agreement"), duly
executed by the Borrower, together with:
(A) A duly executed Control Agreement executed by
the Borrower and Mellon Bank, N.A., and
(B) evidence that all other action that the Agent
may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Pledge Agreement has been taken.
(iii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving the Loan Documents, and of
all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Loan
Documents.
(iv) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign the
Loan Documents and the other documents to be delivered hereunder.
(v) A favorable opinion of Xxxxxxx Xxxx & Xxxxxxxxx LLP,
New York counsel for the Borrower and a favorable opinion of
Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel for the Borrower,
substantially in the form of Exhibit E-1 and E-2, respectively,
hereto and as to such other matters as any Lender through the
Agent may reasonably request.
(vi) A favorable opinion of Shearman & Sterling LLP,
counsel for the Agent, in form and substance satisfactory to the
Agent.
(vii) A copy of the unaudited consolidated balance sheets
of the Borrower and its Subsidiaries, as of March 31, 2005 and
the related consolidated statements of income and cash flows for
the Fiscal Quarter then ended, all prepared in accordance with
GAAP (subject to normal year-end adjustments and except that
footnote and schedule disclosure may be abbreviated) and the
related unaudited consolidating balance sheets and income
statements for such period, accompanied by the certification of
the chief executive officer, chief financial officer, treasurer
or controller of the Borrower that all such financial statements
are complete and correct and present fairly in accordance with
GAAP (subject to normal year-end adjustments and except that
footnote
23
and schedule disclosure may be abbreviated) the consolidated
results of operations and cash flows of the Borrower as at the
end of such Fiscal Quarter and for the period then ended.
(g) The Borrower shall have terminated the commitments, and
arranged, contemporaneously with the initial Borrowing under this
Agreement, to have paid in full all Debt, interest, fees and other
amounts outstanding, under the Existing Credit Agreement and each of
the Lenders that is party to such credit facility hereby waives, upon
execution of this Agreement, the three Business Days' notice required
by Section 2.04 of said Credit Agreement relating to the termination
of commitments thereunder.
SECTION 3.02. Conditions Precedent to Each Borrowing, Commitment
Increase and Extension Date. The obligation of each Lender to make an Advance on
the occasion of each Borrowing, each Commitment Increase and each extension of
Commitments pursuant to Section 2.18 shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Borrowing, the applicable Increase Date or the applicable Extension Date (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing and the acceptance by the Borrower of the proceeds of such
Borrowing, the request for Commitment Increase or the request for Commitment
extension shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing, Increase Date or Extension Date such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date
(except any representation that speaks as of a specified prior date),
before and after giving effect to such Borrowing and to the application
of proceeds therefrom or from such Commitment Increase or Extension
Date, as though made on and as of such date, and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom
or from such Commitment Increase or Extension Date, that constitutes a
Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Due Organization, Authorization, etc. Each of the
Borrower and each Material Subsidiary (i) is duly organized,
validly existing and (to the extent applicable) in good standing
under the laws of its jurisdiction of formation, (ii) is duly
qualified to do business and (to the extent applicable) in good
standing in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required except
where the failure to qualify would not have a Material Adverse
Effect, (iii) has the requisite corporate power and authority and
the right to own and operate its properties, to lease the
property it operates under lease, and to conduct its business as
now and proposed to be conducted, and (iv) has obtained all
material licenses, permits, consents or approvals from or by, and
has made all filings with, and given all notices to, all
Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct (including,
without limitation, the consummation of the transactions
contemplated by
24
this Agreement) as to each of the foregoing, except where the
failure to do so would not have a Material Adverse Effect. The
execution, delivery and performance by the Borrower of this
Agreement and the consummation of the transactions contemplated
hereby and thereby are within its corporate powers and have been
duly authorized by all necessary corporate action (including,
without limitation, shareholder approval, if required). Each of
the Borrower and its Material Subsidiaries has received all other
material consents and approvals (if any shall be required)
necessary for such execution, delivery and performance, and such
execution, delivery and performance do not and will not
contravene or conflict with, or create a Lien or right of
termination or acceleration under, any Requirement of Law or
Contractual Obligation binding upon the Borrower or such Material
Subsidiaries. This Agreement and each of the Loan Documents is
(or when executed and delivered will be) the legal, valid, and
binding obligation of the Borrower enforceable against the
Borrower in accordance with its respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights against the Borrower generally or by general
equitable principles; provided that the Borrower assumes for
purposes of this Section 4.01(a) that this Agreement and
the other Loan Documents have been validly executed and delivered
by each of the parties thereto other than the Borrower. Schedule
4.01(a) sets forth all the jurisdictions in which the Borrower
and each Material Subsidiary are qualified to do business as of
the Effective Date.
(b) Statutory Financial Statements. All books of account of each
Insurance Subsidiary fully and fairly disclose all of the
transactions, properties, assets, investments, liabilities and
obligations of such Insurance Subsidiary and all of such books of
account are in the possession of each Insurance Subsidiary and are
true, correct and complete in all material respects.
(c) GAAP Financial Statements. (i) With respect to any
representation and warranty which is deemed to be made after the date
hereof by the Borrower, the balance sheet and statements of
operations, of shareholders' equity and of cash flow, which as of such
date shall most recently have been furnished by or on behalf of the
Borrower to each Lender for the purposes of or in connection with this
Agreement or any transaction contemplated hereby, shall have been
prepared in accordance with GAAP consistently applied (except as
disclosed therein and, in the case of interim financial statements,
for the absence of, or abbreviated, footnote and schedule
disclosures), and shall present fairly the consolidated financial
condition of the corporations covered thereby as at the dates thereof
for the periods then ended, subject, in the case of quarterly
financial statements, to normal year-end audit adjustments.
(ii) Except as set forth on Schedule 4.01(c)(ii), there has
been no change in the business, assets, operations or financial
condition of the Borrower or any Subsidiary which has had or could
reasonably be expected to have a Material Adverse Effect since
December 31, 2004.
(d) Litigation and Contingent Liabilities. (a) Except as set
forth (including estimates of the dollar amounts involved) in Schedule
4.01(d) hereto and (b) except for claims which are covered by
Insurance Policies, coverage for which has not been denied in writing,
or which relate to Primary Policies or Reinsurance Agreements issued
by the Borrower or its Subsidiaries or to which it is a party entered
into by the Borrower or its Subsidiaries in the ordinary course of
business (referred to herein as "Ordinary Course Litigation"), no
claim, litigation (including, without limitation, derivative actions),
arbitration, governmental investigation or proceeding or inquiry is
pending or, to the knowledge of the Borrower or its Subsidiaries,
threatened against the Borrower or any of its Subsidiaries (i) which
would, if adversely determined, have a Material Adverse Effect or (ii)
which relates to any of the transactions contemplated hereby, and
there is no basis known to the Borrower for any of the foregoing.
Other than any liability incident to such claims, litigation or
proceedings and as set forth on Schedule 4.01(d), the Borrower has no
material Contingent Liabilities not provided for or referred to in the
financial statements delivered pursuant to Section 5.01(a)(i).
(e) ERISA. (i) The Borrower and each Subsidiary is in compliance
in all material respects with the applicable provisions of ERISA, and
each Plan is being administered in compliance in all material respects
with all applicable Requirements of Law, including without limitation
the applicable provisions of
25
ERISA and the Code, except where the failure to do so, individually or
in the aggregate, could not reasonably be expected to have in a
Material Adverse Effect. No ERISA Event (A) has occurred and is
continuing, or (B) to the knowledge of the Borrower, is reasonably
expected to occur with respect to any Plan or Multiemployer Plan.
(ii) With respect to each scheme or arrangement mandated by a
government other than the United States (a "Foreign Government Scheme
or Arrangement") and with respect to each employee benefit plan that
is not subject to United States law maintained or contributed to by
the Borrower or any Subsidiary or with respect to which any Subsidiary
may have liability under applicable local law (a "Foreign Plan"), (A)
the Borrower and each Subsidiary is in compliance in all material
respects with any Requirements of Law applicable to such Foreign
Government Scheme or Arrangement or Foreign Plan and (B) each such
Foreign Government Scheme or Arrangement or Foreign Plan is being
administered by the applicable Person in compliance in all material
respects with all applicable Requirements of Law, except where the
failure to do so, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. No event
that could reasonably be considered the substantive equivalent of an
ERISA Event with respect to any Foreign Government Scheme or
Arrangement or Foreign Plan (A) has occurred and is continuing, or (B)
to the knowledge of the Borrower, is reasonably expected to occur.
(f) Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled by an
investment company," within the meaning of the Investment Company Act
of 1940, as amended.
(g) Regulations U and X. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock. None of the Borrower, any of its
Subsidiaries, any Affiliate of any of them or any Person acting on
their behalf has taken or will take action to cause the execution,
delivery or performance of this Agreement, the making or existence of
the Advances or the use of proceeds of Advances to violate Regulations
U or X of the FRB.
(h) Proceeds. The proceeds of the Advances will be used for the
repayment of advances under the Existing Credit Agreement and for
other general corporate purposes (including capital contributions to
Subsidiaries and acquisitions permitted under Section 5.02(c)). None
of such proceeds will be used in violation of applicable law, and none
of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying any margin stock as defined in Regulation U of the FRB.
(i) Insurance. The Borrower and its Material Subsidiaries are in
substantial compliance with all material conditions contained in their
Insurance Policies.
(j) Ownership of Properties. On the date of any Advance, the
Borrower and its Material Subsidiaries will have good title to all of
their respective material properties and assets, real and personal, of
any nature whatsoever.
(k) Accuracy of Information. All factual written information
furnished heretofore or contemporaneously herewith by or on behalf of
the Borrower or any of its Subsidiaries to the Agent or the Lenders
for purposes of or in connection with this Agreement or any of the
transactions contemplated hereby, as supplemented to the date hereof,
is and all other such factual written information hereafter furnished
by or on behalf of the Borrower or any of its Subsidiaries to the
Agent or the Lenders will be, true and accurate in every material
respect on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to
make such information not misleading in light of the circumstances
under which such information was provided. Any projections and pro
forma financial information contained in such factual written
information are based upon good faith estimates and assumptions
believed by the Borrower and its Subsidiaries to be reasonable 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 that actual results
during the period or periods covered by any such projections may
differ from the projected results.
26
(l) Subsidiaries. Schedule 4.01(l) as updated from time to time
pursuant to Section 5.01(a)(xii) contains a complete list of the
Borrower's Subsidiaries indicating which Subsidiaries are Material
Subsidiaries.
(m) Insurance Licenses. Schedule 4.01(m) lists all of the
jurisdictions in which any of the Insurance Subsidiaries hold licenses
(including, without limitation, licenses or certificates of authority
from applicable insurance departments), permits or authorizations to
transact insurance and reinsurance business (collectively, the
"Licenses") and indicates the line or lines of insurance which each
such Insurance Subsidiary is permitted to be engaged in with respect
to each License therein listed as of the Effective Date. Each Material
Insurance Subsidiary has all necessary Licenses to transact insurance
business or reinsurance business, directly or indirectly, in each
jurisdiction, where such business requires any such Material Insurance
Subsidiary to obtain a License. Except as set forth on Schedule
4.01(m), to the best of the Borrower's knowledge, no such License is
the subject of a proceeding for suspension or revocation or any
similar proceedings, there is no sustainable basis for such a
suspension or revocation, and no such suspension or revocation is
threatened by the applicable insurance department where such
suspension or revocation would have a Material Adverse Effect.
(n) Taxes. The Borrower and each of its Subsidiaries has filed
all tax returns that are required to be filed by it, and has paid or
provided adequate reserves for the payment of all material taxes,
including, without limitation, all payroll taxes and federal and state
withholding taxes, and all assessments payable by it that have become
due, other than (a) those that are not yet delinquent or that are
disclosed on Schedule 4.01(n) and are being contested in good faith by
appropriate proceedings and with respect to which reserves have been
established, and are being maintained, in accordance with GAAP or (b)
those which the failure to file or pay would not have a Material
Adverse Effect. Except as set forth in Schedule 4.01(n), on the
Effective Date there is no ongoing audit or, to the Borrower's
knowledge, other governmental investigation of the tax liability of
the Borrower or any of its Subsidiaries and there is no unresolved
claim by a taxing authority concerning the Borrower's or any such
Subsidiary's tax liability, for any period for which returns have been
filed or were due. As used in this Section 4.01(n), the term "taxes"
includes all taxes of any nature whatsoever and however denominated,
including, without limitation, excise, import, governmental fees,
duties and all other charges, as well as additions to tax, penalties
and interest thereon, imposed by any Governmental Authority.
(o) Securities Laws. Neither the Borrower nor any Affiliate, nor
anyone acting on behalf of any such Person, has directly or indirectly
offered any interest in the Advances for sale to, or solicited any
offer to acquire any such interest from, or has sold any such interest
to any Person that would subject the issuance or sale of the Advances
or any other liability to registration under the Securities Act of
1933, as amended.
(p) Compliance with Laws. Neither the Borrower nor any of its
Subsidiaries is in violation of any Requirements of Law of any
Governmental Authority, if the effect of such violation could
reasonably be expected to have a Material Adverse Effect and, to the
best of the Borrower's knowledge, no such violation has been alleged
and each of the Borrower and its Subsidiaries (i) has filed in a
timely manner all reports, documents and other materials required to
be filed by it with any Governmental Authority, if such failure to so
file could reasonably be expected to have a Material Adverse Effect;
and the information contained in each of such filings is true, correct
and complete in all material respects and (ii) has retained all
records and documents required to be retained by it pursuant to any
law, ordinance, rule, regulation, order, policy, guideline or other
requirement of any Governmental Authority, if the failure to so retain
such records and documents could reasonably be expected to have a
Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
27
(a) Reports, Certificates and Other Information. Furnish
or cause to be furnished to the Agent and the Lenders:
(i) GAAP Financial Statements:
(A) Within 50 days after the close of each of
the first three Fiscal Quarters of each Fiscal Year of the
Borrower, a copy of the unaudited consolidated balance
sheets of the Borrower and its Subsidiaries, as of the
close of such quarter and the related consolidated
statements of income, for that portion of the Fiscal Year
ending as of the close of such Fiscal Quarter, all
prepared in accordance with GAAP (subject to normal
year-end adjustments and except that footnote and schedule
disclosure may be abbreviated) and the related unaudited
consolidating balance sheets and income statements for
such period and accompanied by the certification of the
chief executive officer, chief financial officer,
treasurer or controller of the Borrower that all such
financial statements are complete and correct in all
material respects and present fairly in accordance with
GAAP (subject to normal year-end adjustments and except
that footnote and schedule disclosure may be abbreviated)
the consolidated financial position and results of
operations of the Borrower as at the end of such Fiscal
Quarter and for the period then ended.
(B) Within 95 days after the close of each Fiscal
Year, a copy of the annual financial statements of the
Borrower and its Subsidiaries commencing December 31,
2005, consisting of audited consolidated and unaudited
consolidating balance sheets and statements of income and
audited consolidated changes in shareholders' equity and
cash flows, setting forth in comparative form the
consolidated figures for the previous Fiscal Year, which
financial statements shall be prepared in accordance with
GAAP, certified without material qualification by the
independent certified public accountants regularly
retained by the Borrower, or any other firm of independent
certified public accountants of recognized national
standing selected by the Borrower and reasonably
acceptable to the Required Lenders that all such audited
financial statements are complete and correct in all
material respects and present fairly in accordance with
GAAP the consolidated financial position and the
consolidated results of operations and cash flows of the
Borrower and its Subsidiaries as at the end of such Fiscal
Year and for the period then ended.
(C) On each date that financial statements are
delivered pursuant to Section 5.01(a)(i)(A) or (B), a
schedule in form and substance satisfactory to the Agent
setting forth claims schedule detail with respect to
claims of $5,000,000 or more under any single policy and
claims aggregating $20,000,000 or more with respect to any
single event.
(ii) Tax Returns. If requested by the Agent, copies of
all federal, state, local and foreign tax returns and reports in
respect of income, franchise or other taxes on or measured by
income (excluding sales, use or like taxes) filed by the Borrower
or any of its Subsidiaries.
(iii) SAP Financial Statements. Within 5 days after the
date filed with the Authority for each of its Fiscal Years, but
in any event within 125 days after the end of each Fiscal Year of
each Material Insurance Subsidiary, a copy of the Annual
Statement of such Material Insurance Subsidiary, commencing
December 31, 2005, for such Fiscal Year, if any, required by the
Authority to be filed, each of which statements delivered to be
prepared in accordance with SAP and accompanied by the
certification of the chief financial officer or chief executive
officer of such Material Insurance Subsidiary that such financial
statement is complete and correct in all material respects and
presents fairly in accordance with SAP the financial position of
such Material Insurance Subsidiary for the period then ended.
28
(iv) Notice of Default, Etc. Immediately after an
Executive Officer of the Borrower knows or has reason to know of
the existence of any Default, or any development or other
information which would have a Material Adverse Effect,
telephonic or telegraphic notice specifying the nature of such
Default or development or information, including the anticipated
effect thereof, which notice shall be promptly confirmed in
writing within two (2) Business Days.
(v) Other Information. The following certificates and
other information related to the Borrower:
(A) Within five (5) Business Days of receipt, a copy
of any financial examination reports by a Governmental
Authority with respect to its Material Insurance
Subsidiaries relating to the insurance business of its
Material Insurance Subsidiaries (when, and if, prepared);
provided, the Borrower shall only be required to deliver
any interim report hereunder at such time as Borrower has
knowledge that a final report will not be issued and
delivered to the Agent within 90 days of any such interim
report.
(B) Copies of all filings (other than ordinary
course requalifications, nonmaterial tax and insurance
rate and other ministerial regulatory filings) with
Governmental Authorities by the Borrower or any Material
Insurance Subsidiary not later than five (5) Business Days
after such filings are made, including, without
limitation, filings which seek approval of Governmental
Authorities with respect to transactions between the
Borrower or such Material Insurance Subsidiary and its
Affiliates.
(C) Within five (5) Business Days of such notice,
notice of proposed or actual suspension, termination or
revocation of any material License of any Material
Insurance Subsidiary by any Governmental Authority or of
receipt of notice from any Governmental Authority
notifying the Borrower or any Material Insurance
Subsidiary of a hearing relating to such a suspension,
termination or revocation, including any request by a
Governmental Authority which commits the Borrower or any
Material Insurance Subsidiary to take, or refrain from
taking, any action or which otherwise materially and
adversely affects the authority of the Borrower or any
Material Insurance Subsidiary to conduct its business.
(D) Within five (5) Business Days of such notice,
notice of any pending or threatened investigation or
regulatory proceeding (other than routine periodic
investigations or reviews) by any Governmental Authority
concerning the business, practices or operations of the
Borrower or any Material Insurance Subsidiary.
(E) Simultaneously with delivery of the financial
statements provided pursuant to Section 5.01(a)(i)(B), a
list of all investments (including, without limitation,
Permitted Investments) of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter.
(F) Promptly, notice of any actual or, to the best
of the Borrower's knowledge, proposed material changes in
the Insurance Code governing the investment or dividend
practices of any Material Insurance Subsidiary.
(G) Promptly, such additional financial and other
information as the Agent may from time to time reasonably
request.
(vi) Compliance Certificates. Concurrently with the
delivery to the Agent of the GAAP financial statements under
Sections 5.01(a)(i)(A) and 5.01(a)(i)(B), for each Fiscal Quarter
and Fiscal Year of the Borrower, and at any other time no later
than thirty (30) Business Days following a written request of the
Agent, a duly completed Compliance Certificate, signed by the
chief executive officer, chief financial officer, treasurer or
controller of the Borrower, containing, among other things, a
computation of, and showing compliance with, each of the
applicable
29
financial ratios and restrictions contained in Sections 5.02(a),
5.02(b) and 5.02(j), and to the effect that, to the best of such
officer's knowledge, as of such date no Default has occurred and
is continuing.
(vii) Reports to SEC and to Shareholders. Promptly upon
the filing or making thereof copies of (A) each filing and report
made by the Borrower or any of its Material Subsidiaries with or
to any securities exchange or the Securities and Exchange
Commission and (B) each communication from the Borrower to
shareholders generally.
(viii) Notice of Litigation and ERISA. Promptly upon
learning of the occurrence of any of the following, written
notice thereof, describing the same and the steps being taken by
the Borrower with respect thereto: (A) the institution of, or any
adverse determination in, any litigation, arbitration proceeding
or governmental proceeding (including any Internal Revenue
Service or Department of Labor proceeding with respect to any
Plan) which could, if adversely determined, be reasonably
expected to have a Material Adverse Effect and which is not
Ordinary Course Litigation, (B) an ERISA Event, and an event with
respect to any Plan which could result in the incurrence by the
Borrower or any of its Material Subsidiaries of any material
liability (other than a liability for contributions or premiums),
fine or penalty, (C) the commencement of any dispute which might
lead to the modification, transfer, revocation, suspension or
termination of this Agreement or any Loan Document or (D) any
event which could be reasonably expected to have a Material
Adverse Effect.
(ix) Insurance Reports. Within five (5) Business Days of
receipt of such notice by the Borrower or its Material
Subsidiaries, written notice of any cancellation or material
adverse change in any material Insurance Policy carried by the
Borrower or any of its Material Subsidiaries.
(x) List of Directors and Officers and Amendments.
Concurrently with the delivery of the financial statements
required pursuant to Section 5.01(a)(i)(A) and (B), (x) a list of
the Executive Officers and Directors of the Borrower and (y)
copies of any amendments to the Organization Documents or
Shareholders Agreement to the extent such information is not
included in the information provided pursuant to Section
5.01(a)(vii) and to the extent such information has changed since
the last delivery pursuant to this Section.
(xi) New Subsidiaries. Promptly (i) upon formation or
acquisition of any Subsidiary with a capitalization of $1,000,000
or more and (ii) after the capital of a previously unreported
Subsidiary is increased above $1,000,000, written notice of the
name, purpose and capitalization of such Subsidiary and whether
such Subsidiary is a Material Subsidiary.
(xii) Updated Schedules. From time to time, and in any
event concurrently with delivery of the financial statements
under Section 5.01(a)(i)(A) and (B), revised Schedules 4.01(l),
if applicable, showing changes from the Schedule previously
delivered.
(xiii) Other Information. From time to time such other
information concerning the Borrower or any Subsidiary as the
Agent or any Lender may reasonably request.
Delivery of the materials required to be delivered pursuant to
Section 5.01(a)(i), (ii), (iii), (vi), (vii), (x), (xi) and (xii) to the Agent
and the Lenders in an electronic medium in accordance with the manner set forth
in Section 8.02(b) shall be deemed to satisfy the Borrower's obligation with
respect to such materials under this Section 5.01(a).
(b) Corporate Existence; Foreign Qualification. Do and cause to
be done at all times all things necessary to (i) maintain and preserve
the corporate existence of the Borrower and each Material Subsidiary
of the Borrower (except that inactive Subsidiaries of the Borrower may
be merged out of existence or dissolved) and (ii) be, and ensure that
each Material Subsidiary of the Borrower is, duly
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qualified to do business and (to the extent applicable) be in good
standing as a foreign corporation in each jurisdiction where the
nature of its business makes such qualification necessary unless the
failure to be so qualified would not have a Material Adverse Effect.
(c) Books, Records and Inspections. (i) Maintain, and cause each
of its Subsidiaries to maintain materially complete and accurate books
and records in accordance with GAAP and in addition, with respect to
each Insurance Subsidiary, SAP, (ii) permit, and cause each of its
Subsidiaries to permit, access at reasonable times and, except during
the continuance of an Event of Default, upon reasonable notice by the
Agent to its books and records, (iii) permit, and cause each of its
Subsidiaries to permit, the Agent or its designated representative to
inspect at reasonable times and, except during the continuance of an
Event of Default, upon reasonable notice its properties and
operations, and (iv) permit, and cause each of its Subsidiaries to
permit, the Agent to discuss its business, operations and financial
condition with its officers and its independent accountants.
(d) Insurance. Maintain, and cause each of its Material
Subsidiaries to maintain, Insurance Policies to such extent and
against such hazards and liabilities as is required by law or
customarily maintained by prudent companies similarly situated.
(e) Taxes and Liabilities. Pay, and cause each of its
Subsidiaries to pay, when due all material taxes, assessments and
other material liabilities except as contested in good faith and by
appropriate proceedings with respect to which reserves have been
established, and are being maintained, in accordance with GAAP except
where failure to pay would not have a Material Adverse Effect.
(f) Employee Benefit Plans. Maintain, and cause each of its
Subsidiaries to maintain, each Plan and Foreign Plan in compliance in
all material respects with all applicable Requirements of Law except
where failure to so comply would not have a Material Adverse Effect.
(g) Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, (i) with all Requirements of Law related to
its businesses (including, without limitation, the establishment of
all insurance reserves required to be established under SAP and
applicable laws restricting the investments of the Borrower and its
Subsidiaries), and (ii) with all Contractual Obligations binding upon
such entity, except in each of clauses (i) and (ii) where failure to
so comply would not in the aggregate have a Material Adverse Effect.
(h) Maintenance of Permits. Maintain, and cause each of its
Subsidiaries to maintain, all permits, licenses and consents as may be
required for the conduct of its business by any Governmental Authority
except (x) for such permits, licenses and consents related to assets
which are sold in accordance with Section 5.02(c) or (y) where failure
to maintain the same would not have a Material Adverse Effect.
(i) Conduct of Business. Engage, and cause each Material
Subsidiary to engage, primarily in insurance and reinsurance business
and related activities.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Debt to Capital Ratio. Not permit the Borrower's Debt to
Capital Ratio (excluding DaVinciRe Catastrophe-Linked Securities) to
exceed .30:1.
(b) Net Worth; Minimum Capital. Not permit Net Worth of the
Borrower to be less than $250,000,000, nor permit Net Worth (as shown
on its GAAP financial statements) of DaVinci Reinsurance Ltd. to be
less than $350,000,000.
(c) Amalgamations, Mergers, Consolidations and Sales. Not, and
not permit any of its Subsidiaries to, (i) amalgamate, merge or
consolidate, or purchase or otherwise acquire all or substantially all
of the assets or stock of any class of, or any partnership or joint
venture interest in, any other Person
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(other than a newly formed Subsidiary or the acquisition of a
Subsidiary which complies with clause (ii)(B) of this Section 5.02(c)
or the acquisition of shares of a Subsidiary held by minority
shareholders), or (ii) sell, transfer, convey or lease all or any
substantial part of its assets other than any sale, transfer,
conveyance or lease in the ordinary course of business or any sale or
assignment of receivables except for (A) any such amalgamation, merger
or consolidation, sale, transfer, conveyance, lease or assignment of
any wholly owned Subsidiary into, with or to any other wholly owned
Subsidiary, (B) purchases or acquisitions which comply with Section
5.01(i) provided (x) no Default has occurred and is continuing or
would result therefrom and (y) the purchase price for any single
purchase or acquisition does not exceed 50% of Net Worth as of the
date of such purchase or acquisition minus all amounts which in
accordance with GAAP would be characterized as intangible assets
(including goodwill) as of the date of such purchase or acquisition
(calculated on a pro forma basis giving effect to such acquisition or
purchase) and (z) the aggregate purchase price of all purchases and
acquisitions after the Effective Date does not exceed 100% of Net
Worth as of the date of such purchase or acquisition minus all amounts
which in accordance with GAAP would be characterized as intangible
assets (including goodwill) and (C) sales of assets and capital stock
and other ownership or profit interests (including, without
limitation, partnership, member or trust interest therein) of
Subsidiaries that are not Material Subsidiaries, provided that no
Default has occurred and is continuing.
(d) Regulations U and X. Not, and not permit any of its
Subsidiaries to, hold margin stock (as such term is defined in
Regulation U of the FRB) having a value in excess of 20% of the value
of the assets of the Borrower and its Subsidiaries taken as a whole
after taking into account the application of the proceeds of the
Advances.
(e) Other Agreements. Not, and not permit any of its Subsidiaries
to, enter into any agreement containing any provision which would be
violated or breached by the performance of obligations hereunder or
under any instrument or document delivered or to be delivered by it
hereunder or in connection herewith.
(f) Transactions with Affiliates. Not, and not permit any
Subsidiary to, enter into, or cause, suffer or permit to exist,
directly or indirectly, any arrangement, transaction or contract with
any of its Affiliates unless such arrangement, transaction or contract
is on an arm's length basis; provided that (i) transactions between
the Borrower and any wholly-owned Subsidiary of the Borrower or
between any wholly-owned Subsidiaries of the Borrower, (ii) any
transaction expressly contemplated by the Shareholders Agreement or a
management agreement with RenaissanceRe Holdings, Ltd or any
Subsidiary of RenaissanceRe Holdings Ltd., and (iii) investments
described in clause (i) of the definition of "Permitted Investments"
shall be excluded from the restrictions set forth in this Section
5.02(f).
(g) Liens. Not, and not permit any of its Subsidiaries to, create
or permit to exist any Lien with respect to any assets now or
hereafter existing or acquired, except the following: (A) Liens for
current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings and with respect to which
adequate reserves have been established, and are being maintained, in
accordance with GAAP, (B) easements, party wall agreements, rights of
way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the
ordinary course of the business of the Borrower and its Subsidiaries
taken as a whole; (C) Liens in connection with the acquisition of
fixed assets after the date hereof and attaching only to the property
being acquired, (D) Liens incurred in the ordinary course of business
in connection with workers' compensation, unemployment insurance or
other forms of governmental insurance or benefits and Liens pursuant
to letters of credit or other security arrangements in connection with
such insurance or benefits, (E) mechanics', workers', materialmen's,
landlord liens and other like Liens arising in the ordinary course of
business in respect of obligations which are not delinquent or which
are being contested in good faith and by appropriate proceedings and
with respect to which adequate reserves have been established, and are
being maintained, in accordance with GAAP, (F) liens on Invested
Assets pursuant to trust, letter of credit or other security
arrangements in connection with Reinsurance Agreements or Primary
Policies or other regulatory requirements (for insurance licensing
purposes), (G) Liens listed on Schedule 5.02(g) in effect on the date
hereof; (H) attachments, judgments and other similar Liens for sums
not exceeding $20,000,000 (excluding (x) any portion thereof which is
covered by insurance so long as the insurer is reasonably likely to be
able to pay and has accepted a tender of defense and indemnification
without reservation of rights and (y) all such
32
Liens on assets of Subsidiaries that are not Material Subsidiaries);
(I) attachments, judgments and other similar Liens for sums of
$20,000,000 or more (excluding any portion thereof which is covered by
insurance so long as the insurer is reasonably likely to be able to
pay and has accepted a tender of defense and indemnification without
reservation of rights) provided the execution or other enforcement of
such Liens is effectively stayed and claims secured thereby are being
actively contested in good faith and by appropriate proceedings and
have been bonded off; and (J) Liens pursuant to the Loan Documents.
(h) Restrictions On Negative Pledge Agreements. Not, and not
permit any of its Subsidiaries to enter into or assume any agreement
to which it is a party, other than this Agreement and any agreement
required by applicable insurance regulations which places any
restrictions upon the right of the Borrower or any of its Subsidiaries
to sell, pledge or otherwise dispose of any material portion of its
properties now owned or hereafter acquired other than as permitted
under Section 5.02(g) (with respect to the property subject to such
Lien), except for such restrictions imposed by any senior unsecured
issuance of Debt with an original principal amount in excess of
$50,000,000, provided such restrictions are no more restrictive than
those under this Agreement.
(i) No Amendment of Certain Documents. Not enter into or permit
to exist any amendment, modification or waiver of the Shareholders
Agreement or Organization Documents as in effect on the Effective Date
which would (i) create or amend redemption provisions applicable to
the Borrower's capital stock to provide for mandatory redemption or
redemption at the option of the holder prior to the Termination Date
as such date maybe extended or (ii) in any manner be materially
adverse to the interests of the Lenders.
(j) Dividends, Etc. Not, and not permit its Subsidiaries to, (i)
declare or pay any dividends on any of its capital stock (other than
pro rata payments of dividends by a Subsidiary to the Borrower and
such Subsidiary's other shareholders), (ii) purchase or redeem any
capital stock of the Borrower or any Subsidiary or any warrants,
options or other rights in respect of such stock (other than the pro
rata purchase or redemption by a Subsidiary of its capital stock,
warrants, options or other rights in respect of such stock) or (iii)
set aside funds for any of the foregoing (collectively "Restricted
Payments"); except that so long as, after giving effect to any such
Restricted Payment the Debt to Capital Ratio does not exceed .20:1,
(A) the Borrower may declare or pay dividends on any of its Common
Shares, provided no Default has occurred and is continuing on the date
the Borrower declares such dividend, (B) the Borrower may declare or
pay any Restricted Payment described in clause (i) or (ii) above,
provided (x) no Default has occurred and is continuing on the date of
such declaration or payment and (y) except in the case of the purchase
of shares of a Subsidiary from minority shareholders of such
Subsidiary, after giving effect to such Restricted Payment, the
Borrower's Net Worth exceeds $300,000,000 and (C) any Subsidiary may
pay any Restricted Payment described in clause (ii) above on a non
prorata basis provided no Default has occurred and is continuing on
the date of such payment.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Non-Payment of Advances. Default in the payment when due
of any principal on the Advances; or
(b) Non-Payment of Interest, Fees, Etc. Default, and
continuance thereof for three (3) Business Days, in the payment when
due of interest on the Advances, fees or of any other amount payable
hereunder or under the Loan Documents; or
(c) Non-Payment of Other Debt. (i) Default in the payment when
due and continuance of such default after any applicable grace period
(whether or not such Debt is accelerated) of any other Debt (or any
letter of credit facility) of, or guaranteed by, the Borrower or any
of its Material Subsidiaries if the
33
aggregate amount of Debt (or, in the case of any letter of credit
facility, the issued letters of credit) of the Borrower and/or any of
its Material Subsidiaries which is due and payable or which is or
maybe accelerated, by reason of such default or defaults is
$20,000,000 or more, or (ii) default in the performance or observance
of any obligation or condition and continuance of such default after
any applicable grace period with respect to any such other Debt (or
any letter of credit facility) of, or guaranteed by, the Borrower
and/or any of its Material Subsidiaries if the effect of such default
or defaults is to accelerate or permit the acceleration of the
maturity of any such Debt (or, in the case of any letter of credit
facility, the issued letters of credit) of $20,000,000 or more in the
aggregate prior to its expressed maturity; or
(d) Other Material Obligations. Except for obligations covered
under other provisions of this Article VI, default in the payment when
due, or in the performance or observance of, any material obligation
of, or material condition agreed to by, the Borrower or any of its
Material Subsidiaries with respect to any material purchase or lease
obligation of $20,000,000 or more (unless the existence of any such
default is being contested by the Borrower or such Material Subsidiary
in good faith and by appropriate proceedings and the Borrower or such
Material Subsidiary has established, and is maintaining, adequate
reserves therefor in accordance with GAAP) which default continues for
a period of 30 days; or
(e) Bankruptcy, Insolvency, Etc. (i) The Borrower or any Material
Subsidiary becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, debts as they become due; (ii) there
shall be commenced by or against any such Person any case, proceeding
or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
supervision, conservatorship, liquidation, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, rehabilitation, conservation, supervision,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts,
obligations or liabilities, or (B) seeking appointment of a receiver,
trustee, custodian, rehabilitator, conservator, supervisor, liquidator
or other similar official for it or for all or any substantial part of
its assets, in each case which (1) results in the entry of an order
for relief or any such adjudication or appointment or (2) if filed
against such Person, remains undismissed, undischarged or unstayed for
a period of 90 days; or (iii) there shall be commenced against any
such Person any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry
of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 90 days from the
entry thereof; or (iv) any of such Persons shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (ii) or (iii)
above; or (v) any Governmental Authority shall issue any order of
conservation, supervision or any other order of like effect relating
to any of such Persons; or
(f) Non-Compliance with Certain Financial Covenants. Failure by
the Borrower to comply with its covenants set forth in Section 5.02(a)
or 5.02(b) and continuance of such failure for two Fiscal Quarters
unless (x) with respect to Section 5.02(a), (a) during the first
Fiscal Quarter of such Default the Debt to Capital Ratio does not
exceed .40:1 and (b) during the second Fiscal Quarter of such Default
the Debt to Capital Ratio does not exceed .35:1 and (y) with respect
to Section 5.02(b), (a) such failure is cured by a capital
contribution or a permanent reduction of Debt made during such two
Fiscal Quarters, (b) during the first Fiscal Quarter of such Default
Net Worth of the Borrower is not less than $165,000,000 and capital
(as shown on its GAAP financial statements) of DaVinci Reinsurance
Ltd. is not less than $265,000,000, (c) during the second Fiscal
Quarter of such Default, Net Worth is not less than $210,000,000 and
Net Worth (as shown on its GAAP financial statements) of DaVinci
Reinsurance Ltd. is not less than $310,000,000 and (d) if the
Borrower's capital has fallen below that required under any
Requirement of Law (x) during such cure period no Governmental
Authority places restrictions on the Borrower or any Material
Insurance Subsidiary or requires the Borrower or any Material
Insurance Subsidiary to take any action beyond the normal reporting
requirements and (y) after such cure the Borrower and its Material
Insurance Subsidiaries are in compliance with all Requirements of Law;
or
(g) Non-compliance with Other Financial Conditions. Failure by the
Borrower to comply with its covenants set forth in Section 5.02(h),
5.02(i) or 5.02(j); or
34
(h) Non-compliance with Other Provisions. Failure by the Borrower
to comply with or to perform any provision of this Agreement or the
other Loan Documents (and not constituting an Event of Default under
any of the other provisions of this Article VI) and continuance of such
failure for 30 days after notice thereof from the Agent to the
Borrower; or
(i) Warranties and Representations. Any warranty or
representation made by or on behalf of the Borrower or any Subsidiary
herein is inaccurate or incorrect or is breached or false or misleading
in any material respect as of the date such warranty or representation
is made; or any schedule, certificate, financial statement, report,
notice, or other instrument furnished by or on behalf of Borrower or
any Subsidiary to the Agent or the Lenders is false or misleading in
any material respect on the date as of which the facts therein set
forth are stated or certified; or
(j) ERISA. Any ERISA Event shall occur or exist with respect to
any Plan or Multiemployer Plan of any ERISA Affiliate and, as a result
thereof, together with all other ERISA Events then existing, the
Borrower and its ERISA Affiliates have incurred or would be reasonably
likely to incur liability to any one or more Plans or Multiemployer
Plans or to the PBGC (or to any combination thereof) in excess of
$20,000,000; or
(k) Loan Documents. Any action shall be taken by or on behalf of
the Borrower or any Affiliate thereof to discontinue any of the Loan
Documents or to contest the validity, binding nature or enforceability
of any thereof; or
(l) Change in Control. A Change in Control occurs; or
(m) Judgments. A final judgment or judgments which exceed an
aggregate of $20,000,000 (excluding any portion thereof which is
covered by insurance so long as the insurer is reasonably likely to be
able to pay and has accepted a tender of defense and indemnification
without reservation of rights) shall be rendered against the Borrower
or any Material Subsidiary and shall not have been discharged or
vacated or had execution thereof stayed pending appeal within 90 days
after entry or filing of such judgment(s); or
(n) Change in Law. Any change is made in the Insurance Code which
affects the dividend practices of any Insurance Subsidiary and which is
reasonably likely to have a Material Adverse Effect on the ability of
the Borrower to perform its obligations under the Agreement and such
circumstances shall continue for 120 days; or
(o) Management Agreement. The Borrower shall cease for any reason
to have an effective management agreement with RenaissanceRe Holdings,
Ltd. or any Subsidiary of RenaissanceRe Holdings Ltd.;
then, and in any such event, the Agent (i) shall at the request, or
may with the consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the Advances, all interest
thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances, all such interest
and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided,
however, that upon an Event of Default with respect to the Borrower
under Section 6.01(e), (A) the obligation of each Lender to make
Advances shall automatically be terminated and (B) the Advances, all
such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.
35
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to the Loan Documents or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
Lender that made any Advance as the holder of the Debt resulting therefrom until
the Agent receives and accepts an Assumption Agreement entered into by an
Assuming Lender as provided in Section 2.17 or 2.18 or an Assignment and
Acceptance entered into by such Lender, as assignor, and an Eligible Assignee,
as assignee, as provided in Section 8.07; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance, observance or satisfaction of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or the existence at any
time of any Default or to inspect the property (including the books and records)
of the Borrower; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its Commitment,
the Advances made by it and the Note issued to it, Citibank shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
the same as though it were not the Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include Citibank in its individual
capacity. Citibank and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citibank were not the Agent and
without any duty to account therefor to the Lenders. The Agent shall have no
duty to disclose information obtained or received by it or any of its Affiliates
relating to the Borrower or its Subsidiaries to the extent such information was
obtained or received in any capacity other than as Agent.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
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 Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
36
SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Advances then owed to each of them (or if no
Advances are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement (collectively, the "Indemnified Costs"), provided that no Lender shall
be liable for any portion of the Indemnified Costs resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrower. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any Lender or a third party.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, which successor shall be approved by the Borrower unless a
Default has occurred and is continuing. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of any Loan Document, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders (other than as provided for in Section 2.17), (c) reduce the principal
of, or interest on, the Advances or any fees or other amounts payable hereunder,
(d) postpone any date fixed for any payment of principal of, or interest on, the
Advances or any fees or other amounts payable hereunder (other than as provided
for in Section 2.18), (e) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Advances, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder, (f) release any material portion of any collateral held to secure the
obligations of the Borrower under this Agreement and the Notes or (g) amend this
Section 8.01; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under any
Loan Document.
SECTION 8.02. Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or delivered or (y) as and to the extent set forth in Section 8.02(b) and in the
proviso to this Section 8.02(a), if to the Borrower, at its address x/x
Xxxxxxxxxxx Xxxxx, 0-00 Xxxx Xxxxxxxx, Xxxxxxxx, XX00, Xxxxxxx, Xxxxxxxxx:
Corporate Secretary; if to any Initial Lender, at its Domestic Lending Office
37
specified opposite its name on Schedule I hereto; if to any other Lender, at its
Domestic Lending Office specified in the Assumption Agreement or the Assignment
and Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at Xxx Xxxxx Xxx, Xxx Xxxxxx, Xxxxxxxx 00000, Attention: Bank Loan
Syndications Department; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent,
provided that materials required to be delivered pursuant to Section 5.01(a)(i),
(ii), (iii), (vi), (vii), (x), (xi) or (xii) shall be delivered to the Agent as
specified in Section 8.02(b) or as otherwise specified to the Borrower by the
Agent. All such notices and communications shall, when mailed, telecopied,
telegraphed or e-mailed, be effective when deposited in the mails, telecopied,
delivered to the telegraph company or confirmed by e-mail, respectively, except
that notices and communications to the Agent pursuant to Article II, III or VII
shall not be effective until received by the Agent. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
(b) So long as Citibank or any of its Affiliates is the Agent,
materials required to be delivered pursuant to Section 5.01(a)(i),
(ii), (iii), (vi), (vii), (x), (xi) or (xii) shall be delivered to the
Agent in an electronic medium in a format acceptable to the Agent and
the Lenders by e-mail at xxxxxxxxxxxxxxx@xxxxxxxxx.xxx. The Borrower
agrees that the Agent may make such materials, as well as any other
written information, documents, instruments and other material relating
to the Borrower, any of its Subsidiaries or any other materials or
matters relating to this Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the "Communications")
available to the Lenders by posting such notices on Intralinks,
"e-Disclosure", the Agent's internet delivery system that is part of
Fixed Income Direct, Global Fixed Income's primary web portal, or a
substantially similar electronic system (the "Platform"). The Borrower
acknowledges that (i) the distribution of material through an
electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii)
the Platform is provided "as is" and "as available" and (iii) neither
the Agent nor any of its Affiliates warrants the accuracy, adequacy or
completeness of the Communications or the Platform and each expressly
disclaims liability for errors or omissions in the Communications or
the Platform. No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness
for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by the Agent or any
of its Affiliates in connection with the Platform.
(c) Each Lender agrees that notice to it (as provided in the
next sentence) (a "Notice") specifying that any Communications have
been posted to the Platform shall constitute effective delivery of
such information, documents or other materials to such Lender for
purposes of this Agreement; provided that if requested by any Lender,
the Agent shall deliver a copy of the Communications to such Lender by
email or telecopier. Each Lender agrees (i) to notify the Agent in
writing of such Lender's e-mail address to which a Notice may be sent
by electronic transmission (including by electronic communication) on
or before the date such Lender becomes a party to this Agreement (and
from time to time thereafter to ensure that the Agent has on record an
effective e-mail address for such Lender) and (ii) that any Notice may
be sent to such e-mail address.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
or the Agent to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal
38
proceedings or otherwise) of this Agreement, the other Loan Documents and the
other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify and hold harmless the Agent
and each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) the Notes, this Agreement, any other Loan
Document, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Advances, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
equityholders or creditors or an Indemnified Party or any other Person, whether
or not any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower also agrees not
to assert any claim for special, indirect, consequential or punitive damages
against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, arising out of or otherwise relating to the Notes, this Agreement,
any other Loan Document, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.07(d), 2.09 or 2.11,
acceleration of the maturity of the Advances pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in Sections 2.10, 2.13 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
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 indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Section 2.01, which shall only become effective upon satisfaction of
the conditions precedent set forth in Section 3.01) when it shall have been
executed by the Borrower and the Agent and when the Agent shall have been
notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
39
SECTION 8.07. Assignments and Participations. (a) Each Lender may and,
if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.10, 2.11 or 2.13 or an assertion by such Lender under Section 2.11)
upon at least 5 Business Days' notice to such Lender and the Agent, will assign
to one or more Persons all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement, (ii) except in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof unless the Borrower and the Agent otherwise agree, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment made as a
result of a demand by the Borrower pursuant to this Section 8.07(a) shall be
arranged by the Borrower after consultation with the Agent and shall be either
an assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Borrower pursuant to this Section 8.07(a) unless and
until such Lender shall have received one or more payments from either the
Borrower or one or more Eligible Assignees in an aggregate amount at least equal
to the aggregate outstanding principal amount of the Advances owing to such
Lender, together with accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Lender under this
Agreement, and (vi) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note subject to such assignment and
a processing and recordation fee of $3,500; provided, however, that in the case
of each assignment made as a result of a demand by the Borrower, such
recordation fee shall be payable by the Borrower except that no such recordation
fee shall be payable in the case of an assignment made at the request of the
Borrower to an Eligible Assignee that is an existing Lender. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (other than
its rights under Sections 2.10, 2.13 and 8.04 to the extent any claim thereunder
relates to an event arising prior such assignment) and be released from its
obligations (other than its obligations under Section 7.05 to the extent any
claim thereunder relates to an event arising prior such assignment) under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to the Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and
40
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations that by the terms of this Agreement are required to be
performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
(d) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assumption Agreement and each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and principal
amount of the Advances owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Each Lender may sell participations to one or more banks or
other entities (other than the Borrower or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the 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 and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
the Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and any Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Confidentiality. Each of the Lenders agrees to take and
to cause its Affiliates to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Borrower and provided to it by the Borrower or
any Subsidiary, or by the Agent on the Borrower's or such Subsidiary's behalf,
under this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with the Borrower or
any Subsidiary; except to the extent such information (i) was or becomes
generally available to the public other than as a result of disclosure by such
Lender, or (ii) was or becomes available on a non-confidential basis from a
source other than the Borrower, provided that such source is not bound by a
confidentiality agreement with the Borrower known to such Lender; provided,
however, that any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which such Lender
is subject or in connection with an
41
examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent or
any Lender or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; (F) to such Lender's independent auditors and
other professional advisors; (G) to any assignee of a Lender, actual or
potential, provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Lenders hereunder; (H) to any
Lender or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower or any
Subsidiary is party or is deemed party with such Lender or such Affiliate; and
(I) to its Affiliates which are such Lender's parent or it or its parent's
wholly owned Subsidiary or, with the prior written consent of the Borrower which
shall not be unreasonably withheld, its other Affiliates.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted by
law, in such federal court. The Borrower hereby agrees that service of process
in any such action or proceeding brought in the any such New York State court or
in such federal court may be made upon CT Corporation System at its offices at
000 Xxxxxx Xxxxxx, 13th Floor, New York, N.Y. 10011 (the "Process Agent") and
the Borrower hereby irrevocably appoints the Process Agent its authorized agent
to accept such service of process, and agrees that the failure of the Process
Agent to give any notice of any such service shall not impair or affect the
validity of such service or of any judgment rendered in any action or proceeding
based thereon. The Borrower hereby further irrevocably consents to the service
of process in any action or proceeding in such courts by the mailing thereof by
any parties hereto by registered or certified mail, postage prepaid, to the
Borrower at its address specified pursuant to Section 8.02. 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 any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. 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.
SECTION 8.12. Judgment. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder in U.S. dollars into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase U.S. dollars
with such other currency at Citibank's principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.
(b) The obligation of the Borrower in respect of any sum due from
it in any currency (the "Primary Currency") to any Lender or the Agent hereunder
shall, notwithstanding any judgment in any other currency, be discharged only to
the extent that on the Business Day following receipt by such Lender or the
Agent (as the case may be), of any sum adjudged to be so due in such other
currency, such Lender or the Agent (as the case may be) may in accordance with
normal banking procedures purchase the applicable Primary Currency with such
42
other currency; if the amount of the applicable Primary Currency so purchased is
less than such sum due to such Lender or the Agent (as the case may be) in the
applicable Primary Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the Agent (as the
case may be) against such loss, and if the amount of the applicable Primary
Currency so purchased exceeds such sum due to any Lender or the Agent (as the
case may be) in the applicable Primary Currency, such Lender or the Agent (as
the case may be) agrees to remit to the Borrower such excess.
43
SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the Agent and
the Lenders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any Loan Document, the Advances or the actions of
the Agent or any Lender in the negotiation, administration, performance or
enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
DAVINCIRE HOLDINGS LTD.
By /s/ Xxxx X. Xxxxxx
-----------------------------------
Title: Vice President and Treasurer
CITIBANK, N.A.,
as Agent
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: Managing Director
Initial Lenders
---------------
Commitment
----------
$20,000,000 CITIBANK, N.A.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: Managing Director
$17,500,000 THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED
By /s/ Xxxx Xxx
----------------------------------
Title: Vice President
$12,500,000 BANK OF AMERICA
By /s/ Xxxxx Xxxxxx
----------------------------------
Title: Senior Vice President
$12,500,000 HSBC BANK USA, NATIONAL ASSOCIATION
By /s/ Xxxxxxxx Xxxx
----------------------------------
Title: Senior Vice President
44
$12,500,000 JPMORGAN CHASE BANK, N.A.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
$12,500,000 MELLON BANK, N.A.
By /s/ Xxxxx X. Xxxxxx
---------------------------------
Title: First Vice President
$12,500,000 WACHOVIA BANK, NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxx
---------------------------------
Title: Director
$100,000,000 Total of the Commitments
