Exhibit 10.5
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AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of August 8, 2003
among
RENAISSANCERE HOLDINGS LTD.
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
DEUTSCHE BANK AG NEW YORK BRANCH
as LC Issuer and Co-Documentation Agent
WACHOVIA BANK, NATIONAL ASSOCIATION
as Co-Documentation Agent,
CITIBANK, N.A.,
as Syndication Agent,
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
and
BANC OF AMERICA SECURITIES LLC,
As Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ............................................. 1
SECTION 1.1 Definitions ...................................... 1
SECTION 1.2 Other Interpretive Provisions .................... 19
SECTION 1.3 Accounting Principles ............................ 19
SECTION 1.4 Rounding ......................................... 20
ARTICLE II AMOUNT AND TERMS OF COMMITMENT .......................... 20
SECTION 2.1 Revolving Loan Commitment ........................ 20
SECTION 2.2 Termination or Reduction of Commitments .......... 20
SECTION 2.3 Loan Accounts .................................... 21
SECTION 2.4 Procedure for Borrowing .......................... 21
SECTION 2.5 Conversion and Continuation Elections ............ 22
SECTION 2.6 Repayments ....................................... 23
SECTION 2.7 Interest ......................................... 23
SECTION 2.8 Fees ............................................. 24
SECTION 2.9 Computation of Fees and Interest ................. 25
SECTION 2.10 Payments Generally ............................... 26
SECTION 2.11 Sharing of Payments .............................. 27
SECTION 2.12 Increase of Commitments .......................... 28
ARTICLE III LETTERS OF CREDIT ....................................... 29
SECTION 3.1 Letter of Credit Procedures ...................... 29
SECTION 3.2 Risk Participations in Letters of Credit ......... 29
SECTION 3.3 Reimbursement Obligations ........................ 29
SECTION 3.4 Limitation on the LC Issuer's Obligations ........ 30
SECTION 3.5 Funding by Lenders to the LC Issuer .............. 30
SECTION 3.6 Warranty ......................................... 31
SECTION 3.7 Obligations Absolute ............................. 31
SECTION 3.8 Letter of Credit Collateral Account .............. 32
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY .................. 33
SECTION 4.1 Taxes ............................................ 33
SECTION 4.2 Illegality ....................................... 34
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TABLE OF CONTENTS
(continued)
Page
SECTION 4.3 Increased Costs and Reduction of Return .......... 34
SECTION 4.4 Funding Losses ................................... 35
SECTION 4.5 Inability to Determine Rates ..................... 36
SECTION 4.6 Certificates of Lenders .......................... 36
SECTION 4.7 Substitution of Lenders; LC Issuer ............... 36
SECTION 4.8 Survival ......................................... 37
ARTICLE V REPRESENTATIONS AND WARRANTIES .......................... 37
SECTION 5.1 Due Organization, Authorization, etc ............. 37
SECTION 5.2 Statutory Financial Statements ................... 38
SECTION 5.3 GAAP Financial Statements ........................ 38
SECTION 5.4 Litigation and Contingent Liabilities ............ 39
SECTION 5.5 ERISA ............................................ 39
SECTION 5.6 Investment Company Act ........................... 40
SECTION 5.7 Regulations U and X .............................. 40
SECTION 5.8 Proceeds ......................................... 40
SECTION 5.9 Insurance ........................................ 40
SECTION 5.10 Ownership of Properties .......................... 40
SECTION 5.11 Business Locations ............................... 40
SECTION 5.12 Accuracy of Information .......................... 40
SECTION 5.13 Subsidiaries ..................................... 41
SECTION 5.14 Insurance Licenses ............................... 41
SECTION 5.15 Taxes ............................................ 41
SECTION 5.16 Securities Laws .................................. 41
SECTION 5.17 Compliance with Laws ............................. 42
SECTION 5.18 Tax Shelter Regulations .......................... 42
ARTICLE VI AFFIRMATIVE COVENANTS ................................... 42
SECTION 6.1 Reports, Certificates and Other Information ...... 42
SECTION 6.2 Corporate Existence; Foreign Qualification ....... 47
SECTION 6.3 Books, Records and Inspections ................... 47
SECTION 6.4 Insurance ........................................ 48
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TABLE OF CONTENTS
(continued)
Page
SECTION 6.5 Taxes and Liabilities ........................................ 48
SECTION 6.6 Employee Benefit Plans ....................................... 48
SECTION 6.7 Compliance with Laws ......................................... 48
SECTION 6.8 Maintenance of Permits ....................................... 48
SECTION 6.9 Conduct of Business .......................................... 48
ARTICLE VII NEGATIVE COVENANTS ................................................ 48
SECTION 7.1 Debt to Capital Ratio ........................................ 48
SECTION 7.2 Net Worth .................................................... 49
SECTION 7.3 Mergers, Consolidations and Sales ............................ 49
SECTION 7.4 Regulations U and X .......................................... 49
SECTION 7.5 Other Agreements ............................................. 50
SECTION 7.6 Transactions with Affiliates ................................. 50
SECTION 7.7 Liens ........................................................ 50
SECTION 7.8 Restrictions On Negative Pledge Agreements ................... 51
SECTION 7.9 No Amendment of Certain Documents ............................ 51
SECTION 7.10 Dividends, Etc. .............................................. 51
SECTION 7.11 Contingent Liabilities ....................................... 52
SECTION 7.12 Investments in DaVinci Entities .............................. 52
ARTICLE VIII EVENTS OF DEFAULT AND THEIR EFFECT ................................ 52
SECTION 8.1 Events of Default ............................................ 52
SECTION 8.2 Effect of Event of Default ................................... 54
SECTION 8.3 LC Collateral Account ........................................ 55
ARTICLE IX CONDITIONS ........................................................ 55
SECTION 9.1 Conditions to Occurrence of the Amendment Effective Date ..... 55
SECTION 9.2 Conditions to All Borrowings ................................. 56
ARTICLE X THE ADMINISTRATIVE AGENT .......................................... 57
ECTION 10.1 Appointment and Authorization ................................ 57
ECTION 10.2 Delegation of Duties ......................................... 58
ECTION 10.3 Liability of Administrative Agent ............................ 58
ECTION 10.4 Reliance by Administrative Agent ............................. 58
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TABLE OF CONTENTS
(continued)
Page
SECTION 10.5 Notice of Default ..................................... 59
SECTION 10.6 Credit Decision ....................................... 59
SECTION 10.7 Indemnification of Administrative Agent ............... 60
SECTION 10.8 Administrative Agent in Individual Capacity ........... 60
SECTION 10.9 Successor Administrative Agent ........................ 61
SECTION 10.10 Administrative Agent May File Proofs of Claim ......... 61
SECTION 10.11 Syndication Agent and Documentation Agent ............. 62
ARTICLE XI MISCELLANEOUS ................................................ 62
SECTION 11.1 Amendments and Waivers ................................ 62
SECTION 11.2 General ............................................... 63
SECTION 11.3 No Waiver; Cumulative Remedies ........................ 65
SECTION 11.4 Costs and Expenses .................................... 65
SECTION 11.5 Indemnification by the Borrower ....................... 65
SECTION 11.6 Payments Set Aside .................................... 66
SECTION 11.7 Successors and Assigns ................................ 66
SECTION 11.8 Confidentiality ....................................... 69
SECTION 11.9 Set-off ............................................... 70
SECTION 11.10 Notification of Addresses, Lending Offices, Etc ....... 70
SECTION 11.11 Counterparts .......................................... 70
SECTION 11.12 Tax Forms ............................................. 71
SECTION 11.13 Severability .......................................... 72
SECTION 11.14 Governing Law and Jurisdiction ........................ 72
SECTION 11.15 Waiver of Jury Trial .................................. 73
SECTION 11.16 Currency Indemnity .................................... 73
SECTION 11.17 Entire Agreement ...................................... 74
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SCHEDULES AND EXHIBITS
SCHEDULE 1.2 Pricing Grid
SCHEDULE 2.1 Commitments
SCHEDULE 5.1 Jurisdictions
SCHEDULE 5.2 SAP Exceptions
SCHEDULE 5.3 Adverse Changes
SCHEDULE 5.4 Litigation and Contingent Liabilities
SCHEDULE 5.11 Locations
SCHEDULE 5.13 Subsidiaries
SCHEDULE 5.14 Insurance Licenses
SCHEDULE 5.15 Taxes
SCHEDULE 7.7 Liens
SCHEDULE 11.2 Addresses
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Notice of Conversion/Continuation
EXHIBIT C Form of Compliance Certificate
EXHIBIT D Form of Assignment and Assumption
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 8, 2003,
is entered into by and among RenaissanceRe Holdings Ltd., a Bermuda company (the
"Borrower"), various financial institutions which are parties hereto (the
"Lenders"), Deutsche Bank AG New York Branch as letter of credit issuer (in such
capacity, the "LC Issuer") and co-documentation agent, Wachovia Bank, National
Association, as co-documentation agent, Citibank, N.A., as syndication agent,
and Bank of America, N.A., as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, Bank of America, N.A., as administrative agent,
Deutsche Bank AG New York Branch as letter of credit issuer, and various
financial institutions party thereto (the "Original Lenders") entered into that
certain Credit Agreement dated as of October 5, 1999 (as amended or modified and
in effect immediately prior to the Amendment Effective Date, the "Existing
Credit Agreement") whereby the Original Lenders agreed to make loans to the
Borrower and the LC Issuer agreed to issue (and the Original Lenders agreed to
participate in) certain letters of credit;
WHEREAS, the Borrower has requested the Lenders and the LC Issuer to
amend and restate the Existing Credit Agreement on the terms and conditions set
forth in this Agreement to establish, among other things, the terms and
conditions under which the Lenders will make loans to the Borrower for general
corporate purposes and the LC Issuer will issue (and the Lenders will
participate in) letters of credit to secure obligations of Insurance
Subsidiaries and to cover synthetic catastrophe risks;
WHEREAS, it is the intention of the Borrower, the Lenders, the
Administrative Agent and the LC Issuer that this Agreement and the Loan
Documents executed in connection herewith shall not effect the novation of the
obligations of the Borrower under the Existing Credit Agreement but be merely a
restatement and, where applicable, an amendment of and substitution for the
terms governing such obligations hereinafter; and
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. When used herein the following terms shall
have the following meanings:
Administrative Agent means (a) Bank of America, N.A., in its
capacity as administrative agent for the Lenders, and (b) each other Person as
shall have subsequently been appointed as the successor Administrative Agent
pursuant to Section 10.9.
Affiliate of any Person means any other Person which, directly
or indirectly, controls or is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be:
(a) "controlled by" any other Person if such other Person
possesses, directly or indirectly, power:
(i) to vote 20% or more of the securities having at the
time of any determination hereunder voting power for the
election of directors of such Person; or
(ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise; or
(b) "controlled by" or "under common control with" such other
Person if such other Person is the executor, administrator, or other
personal representative of such Person.
Agent-Related Persons means the Administrative Agent, together
with its Affiliates (including, in the case of Bank of America in its capacity
as the Administrative Agent, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
Administrative Agent's Office means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 11.2, or such
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
Administrative Questionnaire means any Administrative
Questionnaire in a form supplied by the Administrative Agent.
Agreement means this Amended and Restated Credit Agreement.
Alternate Debt to Capital Ratio means, during the existence of
an Excess Loss Period, the ratio of (a) Consolidated Debt to (b) the sum of
Borrower Net Worth plus the applicable Excess Catastrophe Losses plus
Consolidated Debt. In the event that at any time two or more Excess Loss Periods
exist, the Excess Catastrophe Losses to be included on such date of calculation
shall be the Excess Catastrophe Losses for all Excess Loss Periods then in
effect.
Amendment Effective Date means the date on which the conditions
precedent for the effectiveness of this Agreement specified in Section 9.1 shall
be met.
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Annual Statement means the annual financial statement of an
Insurance Subsidiary as required to be filed with the applicable Governmental
Authority of such Insurance Subsidiary's domicile, together with all exhibits or
schedules filed therewith, prepared in conformity with SAP.
Applicable LC Fee Rate means the rate set forth opposite "LC Fee
Rate" on the Pricing Grid for the applicable Pricing Level.
Applicable Margin means (a) in the case of Eurodollar Rate
Loans, the rate set forth opposite "Eurodollar Rate" on the Pricing Grid for the
applicable Pricing Level and (b) in the case of Base Rate Loans, 0%.
Applicable Non-Use Fee Rate means the rate set forth opposite
the "Non-Use Fee Rate" on the Pricing Grid for the applicable Pricing Level.
Applicable Utilization Fee Rate means the rate set forth
opposite "Utilization Fee Rate" on the Pricing Grid for the applicable Pricing
Level.
Approved Fund is defined in Section 11.7(g).
Arranger means Banc of America Securities LLC, in its capacity
as sole lead arranger and sole book manager.
Assignment and Assumption means an Assignment and Assumption
substantially in the form of Exhibit D.
Attorney Costs means and includes all fees, expenses and
disbursements of any law firm or other external counsel, and, without
duplication, the allocated cost of internal legal services and all other
expenses and disbursements of internal counsel.
Authorized Officers means those officers of the Borrower whose
signatures and incumbency shall have been certified to the Administrative Agent
pursuant to Section 9.1(c).
Bank of America means Bank of America, N.A., a national banking
association.
Base Rate means for any day a fluctuating rate per annum equal
to the higher of: (a) the Federal Funds Rate plus 1/2 of 1%; and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America, as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
Base Rate Loan means a Loan that bears interest based on the
Base Rate.
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Borrower is defined in the Preamble.
Borrower Net Worth means the sum of (a) the shareholders equity,
calculated in accordance with GAAP, plus (b) the outstanding 8.54% Mandatorily
Redeemable Capital Securities issued by RenaissanceRe Capital Trust I in March,
1997, plus (c) any other preferred shares of the Borrower issued to Persons
other than a Subsidiary which are not mandatorily redeemable before the
Commitment Termination Date.
Borrowing means a borrowing hereunder consisting of Loans of the
same Type made to the Borrower on the same day by the Lenders under Article II,
and, other than in the case of Base Rate Loans, having the same Interest Period.
Borrowing Date means any date on which a Borrowing occurs under
Section 2.4.
Business Day means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized to close under the laws of,
or are in fact closed in, the state where the Administrative Agent's Office is
located or (except in determining applicable rates hereunder) Xxxxxxxx, Bermuda
, New York, New York and, if the applicable Business Day relates to any
Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits
are carried on in the London interbank market. Each Lender located in Bermuda
shall provide the Administrative Agent with a list of Bermuda banking holidays
thirty (30) days prior to each January 1.
Capital Adequacy Regulation means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any Lender or the LC Issuer or of any corporation
controlling any Lender or the LC Issuer.
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.
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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"),
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; or (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 election by the Board of
Directors or whose nomination 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.
Code means the Internal Revenue Code of 1986.
Commitment means as to any Lender the commitment of such Lender
to make Loans and to participate in or, in the case of the LC Issuer, to issue,
Letters of Credit for the account of the Borrower pursuant to Section 2.1 in an
amount not to exceed the amount set forth on Schedule 2.1 (as such amount may be
adjusted under Section 2.2, Section 2.12 or as a result of one or more
assignments under Section 11.7).
Commitment Termination Date means the earliest to occur of (a)
August 8, 2006 or (b) the date on which any Commitment Termination Event occurs.
Commitment Termination Event means (a) the occurrence of a
Default described in Section 8.1(e) or (b) the occurrence and continuance of any
other Event of Default and either (i) the Obligations are declared to be due and
payable pursuant to Section 8.2, or (ii) in the absence of such declaration, the
Administrative Agent, acting at the direction of the Required Lenders, gives
notice to the Borrower that the Commitments have been terminated.
Compliance Certificate means a certificate substantially in the
form of Exhibit C but with such changes as the Administrative Agent may from
time to time request for purposes of monitoring the Borrower's compliance
herewith.
Consolidated Debt means the consolidated Debt of the Borrower
and its Subsidiaries, including, without limitation, the principal amount of the
Loans and the LC Obligations.
Contingent Catastrophe Debt Agreement means any agreement for
Debt described in clause (a) or (b) of the definition of "Debt" which (a) has a
scheduled maturity date after the Commitment Termination Date and (b) has no
scheduled principal payments on or prior to the Commitment Termination Date.
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Contingent Liability means any agreement, undertaking or
arrangement by which any Person (outside the ordinary course of business)
guarantees, endorses, acts as surety for or otherwise becomes or is contingently
liable for (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment by, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the Debt, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or for the payment of dividends or other distributions
upon the shares of any other Person or undertakes or agrees (contingently or
otherwise) to purchase, repurchase, or otherwise acquire or become responsible
for any Debt, obligation or liability or any security therefor, or to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition of any other
Person, or to make payment or transfer property to any other Person other than
for fair value received including, without limitation, the $37,500,000 Letter of
Credit Facility dated December 30, 1998 between Renaissance Reinsurance Ltd. and
Deutsche Bank AG New York Branch in connection with the investment in the Joint
Venture; 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.
Conversion/Continuation Date means any date on which a
continuation or conversion of a Loan occurs pursuant to Section 2.5.
Credit Extension means making, continuing or converting any Loan
at the request of the Borrower, issuing any Letter of Credit or extending the
stated expiry date of any Letter of Credit, as the case may be.
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 and Contingent Catastrophe Debt Agreements); (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
6
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; and
provided that, notwithstanding anything to contrary contained herein, Debt shall
not include (v) Contingent Liabilities, (w) issued, but undrawn, letters of
credit which have been issued to reinsurance cedents in the ordinary course of
business, (x) unsecured current liabilities incurred in the ordinary course of
business and paid within 90 days after the due date (unless contested diligently
in good faith by appropriate proceedings and, if requested by the Administrative
Agent, reserved against in conformity with GAAP) other than liabilities that are
for money borrowed or are evidenced by bonds, debentures, notes or other similar
instruments (except as described in clauses (v) or (w) above), (y) any
obligations of such Person under any Reinsurance Agreement or any Primary
Policy, or (z) any Debt of the Borrower which is subordinated in right of
payment to the Credit Extensions which Debt was issued to support the preferred
stock referred to in clause (b) of the definition of "Borrower Net Worth".
Debt to Capital Ratio means the ratio of (a) Consolidated Debt
to (b) the sum of Borrower Net Worth plus Consolidated Debt.
Default means any condition or event, which, after notice or
lapse of time or both, would constitute an Event of Default.
Department is defined in Section 5.2.
Dollar(s) and the sign "$" means lawful money of the United
States of America.
Eligible Assignee is defined in Section 11.7(g).
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
7
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 a 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.
Eurodollar Rate means for any Interest Period with respect to
any Eurodollar Rate Loan, a rate per annum determined by the Administrative
Agent pursuant to the following formula:
Eurodollar Rate = Eurodollar Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
Eurodollar Base Rate means, for such Interest Period:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the
page of the Telerate screen (or any successor thereto) that
displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the
first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period, or
(b) if the rate referenced in the preceding clause (a) does
not appear on such page or service or such page or service shall
not be available, the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate on
such other page or other service that displays an average
British Bankers
8
Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and
(b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits
in Dollars for delivery on the first day of such Interest Period
in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by the
Administrative Agent and with a term equivalent to such Interest
Period would be offered by the Administrative Agent's London
Branch to major banks in the London interbank eurodollar market
at their request at approximately 4:00 p.m. (London time) two
Business Days prior to the first day of such Interest Period.
Eurodollar Reserve Percentage means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
carried out to five decimal places) in effect on such day,
whether or not applicable to any Lender, under regulations
issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities").
The Eurodollar Rate for each outstanding Eurodollar Rate Loan
shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
Eurodollar Rate Loan means a Loan that bears interest based on
the Eurodollar Rate.
Event of Default means any of the events described in Section
8.1.
Excess Catastrophe Losses means that part of any losses
recognized by the Borrower or any of its Subsidiaries under the terms of any
Catastrophe Bonds, Reinsurance Agreements or other similar arrangements during a
Fiscal Quarter that are in excess of $150,000,000.
Excess Loss Period means, with respect to any Excess Catastrophe
Losses, the period commencing on the date of the incurrence of such Excess
Catastrophe Losses through the earlier of (i) 365 days after the date of the
incurrence of such Excess Catastrophe Losses and (ii) one Business Day after
delivery of a Net Worth Increase Certificate showing compliance with the Debt to
Capital Ratios set forth in Sections 7.1(a) and 7.1(b).
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.
9
Federal Funds Rate means, for any day, the rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
Fee Letter is defined in Section 2.8.
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 Lender is defined in Section 11.3.
Foreign Plan is defined in Section 5.5(b).
FRB means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.
Fund is defined in Section 11.7(g).
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.
10
Indemnified Liabilities is defined in Section 11.5.
Indemnitee is defined in Section 11.5.
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.
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.
Interest Payment Date means, as to any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan and if an Interest
Period exceeds three months, the day three months after the commencement of the
Interest Period and, as to any Base Rate Loan, the last Business Day of each
calendar quarter and the Commitment Termination Date.
Interest Period means as to any Eurodollar Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a Eurodollar Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of a Eurodollar Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall
end on the preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
and
(iii) no Interest Period for any Loan shall extend beyond the
scheduled Commitment Termination Date.
11
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.
IRS means the U.S. Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
Joint Venture means Top Layer Reinsurance Ltd.
LC Collateral Account is defined in Section 3.8.
LC Issuer means Deutsche Bank AG New York Branch in its capacity
of issuer of Letters of Credit hereunder and any other Person that may become
the issuer of Letters of Credit hereunder pursuant to Section 4.7(b).
LC Obligations means, at any time, the sum, without duplication,
of (a) the aggregate undrawn stated amount of all outstanding Letters of Credit
plus (b) the aggregate unpaid amount of all Reimbursement Obligations.
Lenders is defined in the Preamble.
Lending Office means, as to any Lender, the office or offices of
such Lender specified as its "Lending Office" or "Domestic Lending Office" or
"Eurodollar Lending Office", as the case may be, on such Lender's Administrative
Questionnaire, or such other office or offices as such Lender may from time to
time notify the Borrower and the Administrative Agent.
Letter of Credit means a standby letter of credit having terms
and provisions which are permitted by this Agreement and which otherwise are
reasonably satisfactory to the LC Issuer issued pursuant to Section 3.1.
Letter of Credit Application means a Letter of Credit Application
in the form then used by the LC Issuer for standby letters of credit (with
appropriate adjustments to indicate that any letter of credit issued thereunder
is to be issued pursuant to, and subject to the terms and conditions of, this
Agreement).
License(s) is defined in Section 5.14.
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.
12
Loan means a revolving loan by a Lender to the Borrower under
Article II, and may be a Base Rate Loan or a Eurodollar Rate Loan (each, a
"Type" of Loan).
Loan Documents means this Agreement, the Fee Letter, each Letter
of Credit Application and all other agreements, instruments, certificates,
documents, schedules or other written indicia delivered by the Borrower or any
of its Subsidiaries in connection with any of the foregoing.
Margin Stock means "margin stock" as such term is defined in
Regulation U or X of the FRB.
Material Adverse Effect means, the occurrence of an event
(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 which
is also a Material Subsidiary.
Material Subsidiary means (a) Renaissance 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 Investor Service, Inc.
Monthly Reporting Certificate means a certificate, substantially
in the form of the Compliance Certificate provided that the financial
information included therein and on which the financial covenants are calculated
shall be based on the most recent month-end interim financial statements.
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
13
make contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
Net Worth Increase Certificate is defined in Section 6.1(f)(iv).
Notice of Borrowing means a notice in substantially the form of
Exhibit A.
Notice of Conversion/Continuation means a notice in substantially
the form of Exhibit B.
Obligations means all obligations and liabilities of the Borrower
and its Subsidiaries to the Administrative Agent, the LC Issuer or any of the
Lenders, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, primary or secondary, joint or several, recourse or
nonrecourse or now or hereafter existing or due or to become due, whether for
principal, Reimbursement Obligations, interest, fees, expenses, claims,
indemnities or otherwise, under or in connection with this Agreement or any
other Loan Document.
Ordinary Course Litigation is defined in Section 5.4.
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.
Other Taxes means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
Participants is defined in Section 11.7(d).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
Permitted Investment means, at any time:
14
(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; or
(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
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;
15
(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 Administrative Agent or the Required Lenders stating
that an investment is not permitted under this clause (h), the Borrower
shall sell such investment; and
(i) investments in equity interests issued by a Person whose
assets are invested solely in Permitted Investments described in
clauses (a) through (h); provided 100% of the common and voting stock
of such Person is owned directly by the Borrower and 100% of the
non-voting preferred equity interests are owned by Affiliates of the
Borrower.
Person means any natural person, corporation, company,
partnership, firm, trust, limited liability company, association, government,
governmental agency or other entity, whether acting in an individual, fiduciary
or other capacity.
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.
Pricing Grid means the Pricing Grid set forth on Schedule 1.2.
Pricing Level means the Pricing Level on the Pricing Grid which
is applicable from time to time and in accordance with Section 2.7(c).
Primary Policies means any insurance policies issued by an
Insurance Subsidiary.
Pro Rata Share means as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Lender's Commitment divided by the combined Commitments of all
Lenders; provided that if the Commitments are terminated, each Lender's Pro Rata
Share will be based on the percentage which such Lender's then outstanding
principal amount of Loans and LC Obligations is of the then aggregate
outstanding principal amount of Loans and LC Obligations of all Lenders.
Register is defined in Section 11.7(c).
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.
Reimbursement Obligation means the obligation of the Borrower
under Section 3.3 to reimburse the LC Issuer and/or the Lenders for amounts paid
by the LC Issuer in respect of each drawing under any of the Letters of Credit.
16
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 and the Catastrophic Aggregate of Loss Reinsurance Contract
effective July 22, 1998, as endorsed from time to time, among Renaissance
Reinsurance Ltd., Glencoe Insurance Ltd. and Pascal Reinsurance Ltd. (which
Contract for purposes of this Agreement shall be deemed to have been issued in
the ordinary course of business of such Insurance Subsidiaries).
Reinsurance Net Worth means the shareholders equity of
Renaissance Reinsurance Ltd., calculated in accordance with GAAP, minus any
investment in any Person (other than a wholly-owned Subsidiary) made by
Renaissance Reinsurance Ltd. after the Amendment Effective Date.
RenRe 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 Subsidiaries to cede
risk which (a) has a scheduled maturity date after the Commitment 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 Commitment
Termination Date shall not be deemed to violate clause (a) of the preceding
sentence.
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.
Required Lenders means, at any time, Lenders then having more
than 50% of the aggregate amount of the Commitments or, if the Commitments have
been terminated, Lenders then holding more than 50% of the then aggregate unpaid
principal amount of the Credit Extensions.
Requirements 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.
17
Restricted Period means, with respect to any Excess Loss Period,
the period commencing on the earliest of (a) the first day of such Excess Loss
Period if on such date there are Credit Extensions outstanding, (b) the first
day during such Excess Loss Period that the Borrower requests a Credit
Extension, and (c) the first day during such Excess Loss Period the Borrower
must use the Alternate Debt to Capital Ratio in order to be in compliance with
Section 7.1(a) or (b) and ending when such Excess Loss Period ends.
Retrocession Agreements means any agreement, treaty, certificate
or other arrangement whereby any Insurance Subsidiary cedes to another insurer
all or part of such Insurance Subsidiary's liability under a policy or policies
of insurance reinsured by such Insurance Subsidiary.
RIHL means Renaissance Investment Holdings Ltd.
Risk Participation is defined in Section 3.2.
SAP means, as to each Insurance Subsidiary, the statutory
accounting practices prescribed or permitted by the Regulator 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.
S&P means Standard & Poor's Ratings Services.
S&P/Xxxxx'x Rating means the senior unsecured long term debt
rating of the Borrower as determined from time to time by S&P and/or Moody's. In
the event of a single split rating, the higher rating will apply and in the
event of a double (or more) split rating, one Pricing Level below the higher
rating will apply If at any time no senior unsecured long term debt rating shall
be assigned, Pricing Level I shall apply.
Statutory Financial Statements is defined in Section 5.2(a).
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" shall mean a Subsidiary of the
Borrower; provided, however, that neither DaVinciRe Holdings Ltd. nor DaVinci
Reinsurance Ltd. shall be deemed to be a Subsidiary of the Borrower.
Taxes means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Lender's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Administrative Agent, as the
case may be, is organized or maintains a lending office.
18
Total Outstandings means, as of any date, the aggregate principal
amount of all Loans and all L/C Obligations as of such date.
SECTION 1.2 Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent's or Lenders'
involvement in their preparation.
SECTION 1.3 Accounting Principles. Unless otherwise defined or the context
otherwise requires, all financial and accounting terms used herein or in any of
the Loan Documents or any certificate or other document made or delivered
pursuant hereto shall be defined in accordance
19
with GAAP or SAP, as the context may require; provided, however, that for
purposes of calculating the financial covenants, the financial statements
required under Section 6.1 shall be adjusted so that DaVinciRe Holdings Ltd. and
DaVinci Reinsurance Ltd. shall be accounted for under the equity method rather
than consolidated as Subsidiaries. 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.
SECTION 1.4 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT
SECTION 2.1 Revolving Loan Commitment. Upon and subject to the terms and
conditions hereof, (a) each of the Lenders severally and for itself agrees to
make revolving loans to the Borrower (collectively called the Loans and
individually called a "Loan") from time to time on any Business Day during the
period from the Amendment Effective Date to the Commitment Termination Date, in
such Lender's Pro Rata Share of such aggregate amounts as the Borrower may from
time to time request from all Lenders, provided that the aggregate principal
amount of all Loans which all Lenders shall be committed to have outstanding at
any one time shall not exceed an amount equal to (i) the aggregate amount of the
Commitments minus (ii) the LC Obligations; and (b) the LC Issuer agrees to issue
letters of credit in accordance with Article III (the "Letters of Credit"), from
time to time on any Business Day during the period from the Amendment Effective
Date to the Commitment Termination Date and, as more fully set forth in Section
3.2, each Lender agrees to purchase a Risk Participation in such Letter of
Credit, provided that the aggregate LC Obligations shall not at any time exceed
the lesser of (i) $150,000,000 or (ii) an amount equal to (A) the aggregate
amount of the Commitments minus (B) the aggregate amount of all outstanding
Loans. In no event shall any Lender be required or permitted to make any Credit
Extension if, immediately after giving effect to such Credit Extension and the
application of the proceeds thereof to the extent applied to the repayment of
any outstanding Obligations, the Lender's Credit Extensions would exceed such
Lender's Commitment. Within the limits of each Lender's Commitment, and subject
to the other terms and conditions hereof, the Borrower may borrow under this
Section 2.1, prepay under Section 2.6 and reborrow under this Section 2.1.
SECTION 2.2 Termination or Reduction of Commitments. The Borrower may, upon
not less than five Business Days' prior notice to the Administrative Agent,
terminate the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of
20
$5,000,000 or any multiple of $500,000 in excess thereof; unless, after giving
effect thereto and to any prepayments of Loans and the cash collateralization of
any LC Obligations to be made on the effective date thereof, the
then-outstanding principal amount of the Credit Extensions would exceed the
amount of the combined Commitments then in effect. Once reduced in accordance
with this Section, the Commitments may not be increased. Any reduction of the
Commitments shall be applied to each Lender according to its Pro Rata Share.
SECTION 2.3 Loan Accounts. The Loans made and the Risk Participations
purchased by each Lender shall be evidenced by one or more loan accounts or
records maintained by such Lender in the ordinary course of business. The loan
accounts or records maintained by each Lender shall be conclusive, absent
manifest error, of the amount of Loans made and the Risk Participations
purchased by such Lender to the Borrower and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to any Obligations.
SECTION 2.4 Procedure for Borrowing. (a) Each Borrowing shall be made upon
the Borrower's irrevocable written notice delivered to the Administrative Agent
in the form of a Notice of Borrowing (which notice must be received by the
Administrative Agent prior to 9:00 a.m. (San Francisco time) (x) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Rate
Loans; and (y) one Business Day prior to the requested Borrowing Date, in the
case of Base Rate Loans, specifying:
(i) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $5,000,000 or any multiple of $500,000 in excess thereof;
(ii) the requested Borrowing Date, which shall be a Business Day;
(iii) the Type of Loans comprising the Borrowing; and
(iv) the duration of the Interest Period applicable to any
Eurodollar Loans included in such notice. If the Notice of Borrowing fails
to specify the duration of the Interest Period for any Borrowing comprised
of Eurodollar Rate Loans, such Interest Period shall be three months.
(b) The Administrative Agent will promptly notify each Lender of
its receipt of any Notice of Borrowing and of the amount of such Lender's Pro
Rata Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of each
Borrowing available to the Administrative Agent for the account of the Borrower
at the Administrative Agent's Office by 10:00 a.m. (San Francisco time) on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. The proceeds of all such Loans will then be made available
to the Borrower by the Administrative Agent by wire transfer in accordance with
written instructions provided to the Administrative Agent by the Borrower of
like funds as received by the Administrative Agent.
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(d) After giving effect to any Borrowing, there may not be more
than five (5) different Interest Periods in effect.
SECTION 2.5 Conversion and Continuation Elections. (a) The Borrower may,
upon irrevocable written notice to the Administrative Agent in accordance with
Section 2.5(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans,
or as of the last day of the applicable Interest Period, in the case of any
other Type of Loans, to convert any such Loans (or any part thereof in an
amount not less than $5,000,000, or that is in an integral multiple of
$500,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $500,000 in excess thereof).
(b) The Borrower shall deliver a Notice of Conversion/ Continuation
to be received by the Administrative Agent not later than 9:00 a.m. (San
Francisco time) at least (x) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Eurodollar Rate Loans; and (y) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the Type of Loans resulting from the proposed conversion or
continuation; and
(iv) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Eurodollar Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to such Eurodollar Rate Loans, as the case may be, or if
any Default or Event of Default then exists, such Eurodollar Rate Loans shall
convert automatically into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Administrative Agent will promptly notify each Lender of
its receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the Borrower, the Administrative Agent will promptly notify each
Lender of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
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(e) After giving effect to any conversion or continuation of Loans,
there may not be more than five (5) different Interest Periods in effect.
SECTION 2.6 Repayments. (a) Subject to Section 4.4, the Borrower may, at
any time or from time to time and without premium or penalty, upon not less than
three (3) Business Days' irrevocable notice to the Administrative Agent, ratably
prepay Loans in whole or in part, in minimum amounts of $1,000,000 or any
multiple of $500,000 in excess thereof. Such notice of prepayment shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of any
such notice, and of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with, in the case of prepayment of Eurodollar Rate
Loans, accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 4.4.
(b) If at any time the aggregate outstanding principal amount of
the Credit Extensions shall exceed the Commitments in effect at such time, the
Borrower shall make a principal repayment of Loans and/or cash collateralize the
LC Obligations in an amount equal to such excess.
(c) The Borrower shall repay to the Lenders on the Commitment
Termination Date the aggregate principal amount of Loans and repay or fully cash
collateralize the LC Obligations outstanding on such date.
(d) The Borrower shall, immediately upon any acceleration of the
maturity date of the Obligations pursuant to Section 8.2, repay the aggregate
principal amount of Loans and repay or fully cash collateralize (in accordance
with Section 3.8) the LC Obligations outstanding on such date.
SECTION 2.7 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Eurodollar Rate or the Base Rate, as the case may be (and subject
to the Borrower's right to convert to other Types of Loans under Section 2.5),
plus the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Eurodollar Rate Loans under Section 2.6 for the portion of the Loans so prepaid
and upon payment (including prepayment) in full thereof and, during the
existence of any Event of Default, interest shall be paid on demand of the
Administrative Agent at the request or with the consent of the Required Lenders.
(c) Any change in the Applicable Margin, Applicable Non-Use Fee
Rate, Applicable LC Fee Rate or Applicable Utilization Fee Rate resulting from a
change in the S&P/Xxxxx'x Rating shall be effective as of the effective date of
the change in the S&P/Xxxxx'x Rating. The Borrower agrees promptly upon any
change in the S&P/Xxxxx'x Rating to inform the Administrative Agent thereof.
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(d) Notwithstanding clause (a) of this Section, after acceleration
or, at the election of the Required Lenders while any Event of Default exists,
the Borrower shall pay interest (after as well as before entry of judgment
thereon to the extent permitted by law) on the principal amount of all
outstanding Obligations, at a rate per annum which is determined by adding 2%
per annum to the Applicable Margin then in effect for such Loans and, in the
case of Obligations not subject to an interest rate, at a rate per annum equal
to the Base Rate plus 2%; provided, however, that, on and after the expiration
of any Interest Period applicable to any Eurodollar Rate Loan outstanding on the
date of occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the continuation of such Event of Default or
after acceleration, bear interest at a rate per annum equal to the Base Rate
plus 2%.
(e) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Lender hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest rate
of interest that may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrower shall pay such Lender interest at the
highest rate permitted by applicable law.
SECTION 2.8 Fees. (a) Agency Fees. The Borrower shall pay fees to the
Administrative Agent for the Administrative Agent's own account, as required by
the letter agreement ("Fee Letter") between the Borrower and the Administrative
Agent dated June 19, 2003 and as the Borrower and the Administrative Agent may
agree from time to time.
(b) Non-Use Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender a non-use fee on the actual daily unused
portion of such Lender's Commitment, computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter, applying the Applicable Non-Use
Fee Rate based upon the daily Pricing Level for that quarter as calculated by
the Administrative Agent. Such non-use fee shall accrue from the Amendment
Effective Date to the Commitment Termination Date and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December commencing on September 30, 2003 through the Commitment Termination
Date, with the final payment to be made on the Commitment Termination Date. The
non-use fees provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article IX are not met.
(c) Utilization Fee. In addition to the non-use fee required under
Section 2.8(b), the Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share a utilization fee
equal to the Applicable Utilization Fee Rate times the Total Outstandings on
each day that the Total Outstandings are equal to or exceed 50% of the actual
daily amount of the Commitments. Such utilization fee shall accrue from the
Amendment Effective Date to the Commitment Termination Date and shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December commencing on September 30, 2003 with the final payment
to be made on the Commitment
24
Termination Date. The Applicable Utilization Fee Rate shall be calculated
quarterly in arrears and if there is any change in the Applicable Utilization
Fee Rate during any quarter, the daily amount shall be computed and multiplied
by the Applicable Utilization Fee Rate for each period during which such
Applicable Utilization Fee Rate was in effect. The utilization fee provided in
this subsection shall accrue at all times, including at any time during which
one or more of the conditions in Article IX are not met.
(d) Letter of Credit Fees.
(i) The Borrower shall pay to the Administrative Agent for the
account of each Lender a letter of credit fee for each Letter of Credit
requested by the Borrower in an amount per annum equal to the product of
the actual daily aggregate undrawn stated amount of such Letter of Credit
(excluding any Reimbursement Obligation thereunder) and to the Applicable
LC Fee Rate. Such letter of credit fee shall be computed on a quarterly
basis in arrears on the last Business Day of each calendar quarter, and
shall be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December commencing on September 30, 2003
through the Commitment Termination Date with the final payment to be made
on the Commitment Termination Date.
(ii) The Borrower agrees to pay to the LC Issuer a fronting fee in
an amount per annum on the actual daily aggregate undrawn stated amount of
each Letter of Credit requested by the Borrower (excluding any
Reimbursement Obligation thereunder) as may be agreed upon from time to
time by the Borrower and the LC Issuer.
(iii) In addition, with respect to each Letter of Credit requested by
the Borrower or any amendment or extension thereof, the Borrower agrees to
pay to the LC Issuer such fees and expenses as the LC Issuer customarily
requires in connection with the issuance, amendment, transfer, negotiation,
processing and/or administration of letters of credit.
(e) Upfront Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender an upfront fee as agreed to by the Borrower
and such Lender on the Amendment Effective Date and once paid such upfront fees
shall be nonrefundable.
SECTION 2.9 Computation of Fees and Interest. (a) Interest on Base Rate
Loans and Reimbursement Obligations shall be computed on the basis of a
365/366-day year and actual days elapsed. All computations of fees and other
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error.
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SECTION 2.10 Payments Generally. (a) All payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at the Administrative Agent's Office in Dollars and in immediately available
funds not later than 10:00 a.m. (San Francisco time) on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its Pro
Rata Share (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender's Lending Office. All
payments received by the Administrative Agent after 10:00 a.m. (San Francisco
time) shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on
a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower or such Lender, as the
case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof
in immediately available funds, together with interest thereon for the
period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "Compensation Period") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable
26
Borrowing. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment or to prejudice any rights
which the Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent
funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable
Credit Extension set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, the Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without
interest.
(e) The obligations of the Lenders hereunder to make Loans and
to fund Risk Participations in Letters of Credit are several and not joint. The
failure of any Lender to make any Loan or to fund any such Risk Participation on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its Risk Participation.
SECTION 2.11 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in LC Obligations held by it, any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such fact,
and (b) purchase from the other Lenders such participations in the Loans made by
them and/or such subparticipations in the Risk Participations held by them, as
the case may be, as shall be necessary to cause such purchasing Lender to share
the excess payment in respect of such Loans or such Risk Participations, as the
case may be, pro rata with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in Section 11.6 (including
pursuant to any settlement entered into by the purchasing Lender in its
discretion), such purchase shall to that extent be rescinded and each other
Lender shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender's ratable share (according
to the proportion of (i) the amount of such paying Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered, without further interest thereon. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.9) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and
27
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
SECTION 2.12 Increase of Commitments.
(a) The Borrower may, by notice to the Administrative Agent
given not less than 45 days prior to the requested effective date, request that
the Commitments be increased in increments of $10,000,000 (but in no event may
the total Commitments after giving effect to all increases pursuant to this
Section 2.12 exceed $450,000,000). The Administrative Agent shall notify the
Lenders of its receipt of any notice given pursuant to this Section 2.12(a)
within two Business Days after the Administrative Agent's receipt thereof. Each
Lender (a "Consenting Lender") may, by irrevocable notice to the Borrower and
the Administrative Agent delivered to the Administrative Agent not later than 30
days after the receipt of notice from the Administrative Agent, inform the
Administrative Agent that it wishes to participate in the requested increase and
the amount of such participation. Such consent may be given or withheld by each
Lender in its absolute and sole discretion.
(b) The Borrower shall have the right, by notice to the
Administrative Agent given not less than 45 days prior to the requested
effective date, to increase the Commitments in increments of $10,000,000 (but in
no event may the total Commitments after giving effect to all increases pursuant
to this Section 2.12 exceed $450,000,000) provided that one or more Persons
acceptable to the Borrower, the Administrative Agent and the LC Issuer has
agreed to make a Commitment on and subject to the terms of this Agreement and
has executed such documents as the Administrative Agent deems reasonably
necessary or advisable to add such Person or Persons as a Lender hereunder. The
Administrative Agent shall notify the Lenders of its receipt of any notice given
pursuant to this Section 2.12(b) within two Business Days after the
Administrative Agent's receipt thereof.
(c) The Borrower shall not be entitled to request an increase in
the Commitments nor shall any approved Commitment increase be effective if any
Default or Event of Default shall have occurred and be continuing at such time.
(d) Effective Date of Increase. The effective date of any
increase in the Commitments pursuant to Section 2.12(a) or (b) shall be
effective on such date as may be selected by Borrower and the Administrative
Agent taking into account any outstanding Interest Periods to minimize breakage
costs in the event of any reallocations of Pro Rata Shares. The Administrative
Agent shall notify the Lenders of the effective date of the increase and shall
provide a revised Schedule 2.1 reflecting such increase in the Commitments and
each Lender's Pro Rata Share after giving effect to such increase. From and
after the date of an increase in the Commitments, all references herein and in
any Loan Document to the Commitments shall refer to the Commitments as so
increased.
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ARTICLE III
LETTERS OF CREDIT
SECTION 3.1 Letter of Credit Procedures. The Borrower shall give notice
to the LC Issuer and the Administrative Agent of the proposed issuance of each
Letter of Credit on a Business Day which is at least three Business Days prior
to the proposed date of issuance of such Letter of Credit. Each such notice
shall be accompanied by a Letter of Credit Application, duly executed by the
Borrower and in all respects satisfactory to the LC Issuer, together with such
other documentation as the LC Issuer may reasonably request in support thereof,
it being understood that each Letter of Credit Application shall specify, among
other things, the name of the account party which shall be either the Borrower
(subject to Section 5.8) or an Insurance Subsidiary designated by the Borrower,
the date on which the proposed Letter of Credit is to be issued, the amount of
the Letter of Credit, the expiration date of such Letter of Credit (which shall
not be later than five Business Days prior to the Commitment Termination Date)
and whether such Letter of Credit is to be transferable in whole or in part.
Subject to the satisfaction of the conditions precedent set forth in Article IX,
the LC Issuer shall issue such Letter of Credit on the requested issuance date.
The Borrower shall only be entitled to request Letters of Credit denominated in
Dollars and issued solely for the purposes described in Section 5.8.
SECTION 3.2 Risk Participations in Letters of Credit. (a) Concurrently
with the issuance of each Letter of Credit and any amendment thereto, the LC
Issuer shall be deemed to have sold and transferred to each other Lender, and
each other Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the LC Issuer, without recourse or warranty, an
undivided interest and participation (a "Risk Participation"), to the extent of
such other Lender's Pro Rata Share, in such Letter of Credit and the Borrower's
Reimbursement Obligations with respect thereto. For the purposes of this
Agreement, the unparticipated portion of each Letter of Credit shall be deemed
to be the LC Issuer's "Risk Participation" therein.
(b) Immediately after the issuance or amendment of any Letter of
Credit, the LC Issuer shall provide notice of the same to the Administrative
Agent and shall, within five Business Days after the end of each calendar month,
provide the Administrative Agent with a report showing as of the last day of
such calendar month the outstanding Letters of Credit, expiration dates,
issuance dates and amount available to be drawn thereunder and such other
information as may be reasonably requested by the Administrative Agent.
SECTION 3.3 Reimbursement Obligations. (a) The Borrower hereby
unconditionally and irrevocably agrees to reimburse the LC Issuer for each
payment or disbursement made by the LC Issuer under any Letter of Credit issued
at its request honoring any demand for payment made by the beneficiary
thereunder, in each case on the date that such payment or disbursement is made.
Any amount not reimbursed on the date of such payment or distribution shall bear
interest from and including the date of such payment or disbursement to but not
including the date that the LC Issuer is reimbursed by the Borrower therefor,
payable on demand, at a rate per
29
annum equal to sum of the Base Rate plus 2.00%. The LC Issuer shall promptly
notify the Borrower and the Administrative Agent whenever any demand for payment
is made under any Letter of Credit by the beneficiary thereunder; provided,
however, that the failure of the LC Issuer to so notify the Borrower or the
Administrative Agent shall not affect the rights of the LC Issuer or the Lenders
in any manner whatsoever.
(b) In the event of a drawing under any Letter of Credit,
provided no Default or Event of Default has occurred and is continuing, the
Borrower shall be entitled to request Loans to repay advances made by the LC
Issuer under any Letter of Credit in accordance with Section 2.4.
SECTION 3.4 Limitation on the LC Issuer's Obligations. In determining
whether to pay under any Letter of Credit, the LC Issuer shall have no
obligation to the Borrower or any Lender other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the LC Issuer under
or in connection with any Letter of Credit, if taken or omitted in the absence
of gross negligence and willful misconduct, shall not impose upon the LC Issuer
any liability to the Borrower or any Lender and shall not reduce or impair the
Borrower's reimbursement obligations set forth in Section 3.3 or the obligations
of the Lenders pursuant to Section 3.5.
SECTION 3.5 Funding by Lenders to the LC Issuer. (a) If the LC Issuer
makes any payment or disbursement under any Letter of Credit and the Borrower
has not reimbursed the LC Issuer in full for such payment or disbursement by
10:00 a.m. (New York City time) on the date of such payment or disbursement or
if any reimbursement received by the LC Issuer from the Borrower is or must be
returned or rescinded upon or during any bankruptcy, insolvency or
reorganization of the Borrower or otherwise, each Lender shall be obligated to
pay to the LC Issuer, in full or partial payment of the purchase price of its
Risk Participation in such Letter of Credit, its Pro Rata Share of such payment
or disbursement (but no such payment shall diminish the obligations of the
Borrower under Section 3.3), and the Administrative Agent shall promptly notify
each Lender thereof. Each Lender irrevocably and unconditionally agrees,
severally and for itself alone, to so pay to the Administrative Agent in
immediately available funds for the LC Issuer's account the amount of such
Lender's Pro Rata Share of such payment or disbursement. If and to the extent
any Lender shall not have made such amount available to the Administrative Agent
by 2:00 p.m. (New York City time) on the Business Day on which such Lender
receives notice from the Administrative Agent of such payment or disbursement
(it being understood that any such notice received after noon (New York City
time) on any Business Day shall be deemed to have been received on the next
following Business Day), such Lender agrees to pay interest on such amount to
the Administrative Agent for the LC Issuer's account forthwith on demand for
each day from and including the date such amount was to have been delivered to
the Administrative Agent to but excluding the date such amount is paid, at a
rate per annum equal to (a) for the first three days after demand, the Federal
Funds Rate from time to time in effect and (b) thereafter, the Base Rate from
time to time in effect. Any Lender's failure to make available to the
Administrative Agent its Pro Rata Share of any such payment or disbursement
shall not
30
relieve any other Lender of its obligation hereunder to make available to the
Administrative Agent such other Lender's Pro Rata Share of such payment, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent such other Lender's Pro Rata Share of any
such payment or disbursement.
(b) If any amount received by the LC Issuer on account of any
payment with respect to any Risk Participation, any Reimbursement Obligation or
any other Obligation shall be avoided, rescinded or otherwise returned or paid
over by the LC Issuer for any reason at any time, whether before or after the
termination of this Agreement (or the LC Issuer believes in good faith that such
avoidance, rescission, return or payment is required, whether or not such matter
has been adjudicated), each Lender will (except to the extent a corresponding
amount received by such Lender on account of its Risk Participation relating to
the same payment on a Letter of Credit has been avoided, rescinded or otherwise
returned or paid over by such Lender), promptly upon notice from the
Administrative Agent or the LC Issuer, pay over to the Administrative Agent for
the account of the LC Issuer its Pro Rata Share of such amount, together with
its Pro Rata Share of any interest or penalties payable with respect thereto.
SECTION 3.6 Warranty. The delivery of each Letter of Credit Application
pursuant to Section 3.1 and each request for amendment or extension of an
existing Letter of Credit shall automatically constitute a warranty by the
Borrower to the Administrative Agent and each Lender to the effect that on the
date of such requested Credit Extension that the conditions of Section 9.2 have
been satisfied.
SECTION 3.7 Obligations Absolute. The obligation of the Borrower to
reimburse the LC Issuer for any payment made by the LC Issuer under any Letter
of Credit issued for the account of the Borrower, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, the applicable Letter of Credit Application and any other applicable
agreement or instrument under all circumstances, including without limitation
the following circumstances:
(i) any lack of validity or enforceability of any Loan Document,
any Letter of Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the "LC Related
Documents");
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Borrower or any
other Person in respect of any LC Related Document or any other
amendment or waiver of or any consent to departure from all or any of
the LC Related Documents;
(iii) subject to Section 3.4, the existence of any claim, set-off,
defense or other right that the Borrower or any other Person may have
at any time against any beneficiary or any transferee of a Letter of
Credit (or any Persons for which any such beneficiary or any such
transferee may be acting), the LC Issuer or any other Person, whether
in connection with the transactions contemplated by the LC Related
Documents or any
31
unrelated transaction (including any underlying transaction between any
Credit Party and the beneficiary named in any such Letter of Credit);
(iv) subject to Section 3.4, any statement or any other document
presented under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect, any statement therein being
untrue or inaccurate in any respect, any errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, telecopier or otherwise, or any errors in translation or in
interpretation of technical terms;
(v) subject to Section 3.4, payment by the LC Issuer under a
Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of Credit or any
defense based upon the failure of any drawing under a Letter of Credit
to conform to the terms of the Letter of Credit (provided that any
draft, certificate or other document presented pursuant to such Letter
of Credit appears on its face to comply with the terms thereof), any
non-application or misapplication by the beneficiary or any transferee
of the proceeds of such drawing or any other act or omission of such
beneficiary or transferee in connection with such Letter of Credit;
(vi) the occurrence of any Default or Event of Default; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including without limitation any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower.
SECTION 3.8 Letter of Credit Collateral Account. The Borrower agrees
that it will, upon the request of the Administrative Agent or the Required
Lenders and until the final expiration date of any Letter of Credit and
thereafter so long as any Obligations are payable hereunder, maintain a special
collateral account pursuant to arrangements satisfactory to the Administrative
Agent (the "LC Collateral Account") at the Administrative Agent's office in the
name of the Borrower but under the sole dominion and control of the
Administrative Agent, for the benefit of the LC Issuer and the Lenders and the
Borrower shall have no interest therein except as set forth in Section 8.3. The
Borrower hereby pledges, assigns and grants to the Administrative Agent, for the
benefit of the LC Issuer and the Lenders, a security interest in all of the
Borrower's right, title and interest in and to the LC Collateral Account, all
funds and Permitted Investments which may from time to time be on deposit in the
LC Collateral Account to secure the prompt and complete payment and performance
of the Obligations. The Administrative Agent will invest any funds on deposit
from time to time in the LC Collateral Account in Permitted Investments (other
than those described in clause (i) of the definition thereof) having a maturity
not exceeding 30 days. Funds earned on such Permitted Investments shall be
deposited into the LC Collateral Account. Nothing in this Section 3.8 shall
require the Borrower to deposit any funds in the LC Collateral Account or limit
the right of the Administrative Agent to release any funds held in the LC
Collateral Account in each case other than as required by Section 2.6 or Article
8.
32
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 4.1 Taxes. (a) Any and all payments by the Borrower to each
Lender, the LC Issuer or the Administrative Agent under this Agreement and any
other Loan Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Lender, the LC Issuer and the Administrative Agent for the full amount of Taxes
or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section) paid by the Lender or the Administrative
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Lender or the
Administrative Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender, the LC Issuer or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section) such Lender, the LC Issuer or the Administrative Agent,
as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Borrower shall also pay, without duplication, to each
Lender, the LC Issuer or the Administrative Agent for the account of
such Person, at the time interest is paid, all additional amounts which
the respective Person specifies as necessary to preserve the after-tax
yield the Lender would have received if such Taxes or Other Taxes had
not been imposed.
(d) Within 30 days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
33
(e) If the Borrower is required to pay additional amounts to any
Lender, the LC Issuer or the Administrative Agent pursuant to Section 4.1(c),
then such Person shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Person is not otherwise
disadvantageous to such Lender or inconsistent with such Person's internal
policies.
SECTION 4.2 Illegality. (a) If any Lender determines that the
introduction of any Requirements of Law, or any change in any Requirements of
Law, or in the interpretation or administration of any Requirements of Law, has
made it unlawful in each case, after the date hereof, or that any central bank
or other Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make Eurodollar Rate Loans, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of that Lender to make Eurodollar Rate Loans shall be suspended until
the Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
Eurodollar Rate Loan, the Borrower shall, upon its receipt of notice of such
fact and demand from such Lender (with a copy to the Administrative Agent),
prepay in full such Eurodollar Rate Loans of that Lender then outstanding,
together with interest accrued thereon and amounts required under Section 4.4,
either on the last day of the Interest Period thereof, if the Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such Eurodollar
Rate Loan. If the Borrower is required to so prepay any Eurodollar Rate Loan,
then concurrently with such prepayment, the Borrower shall borrow from the
affected Lender, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Lender to make or maintain
Eurodollar Rate Loans has been so terminated or suspended, the Borrower may
elect, by giving notice to the Lender through the Administrative Agent that all
Loans which would otherwise be made by the Lender as Eurodollar Rate Loans shall
be instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent under
this Section, the affected Lender shall designate a different Lending Office
with respect to its Eurodollar Rate Loans if such designation will avoid the
need for giving such notice or making such demand and will not, in the judgment
of such Lender, be illegal or otherwise disadvantageous to such Lender or
inconsistent with such Lender's internal policies.
SECTION 4.3 Increased Costs and Reduction of Return. (a) If any Lender
determines that after the date hereof due to either (i) the introduction of or
any change (other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Eurodollar Rate) in or in the
interpretation of any law or regulation or (ii) the compliance by the LC Issuer
or such Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar
34
Rate Loans, then the Borrower shall be liable for, and shall from time to time,
within five Business Days after demand, which demand shall include the
certificate required by Section 4.6 (with a copy of such demand to be sent to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender, additional amounts as are sufficient to compensate such Lender for
such increased costs; provided that the Borrower shall not be obligated to pay
any additional amounts which were incurred by such Lender more than 90 days
prior to the date of such request.
(b) If the LC Issuer or any Lender shall have determined that
after the date hereof (i) the introduction of any Capital Adequacy Regulation,
(ii) any change in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy Regulation by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the LC Issuer or such Lender (or
its Lending Office) or any corporation controlling the LC Issuer or such Lender
with any Capital Adequacy Regulation, affects or would affect the amount of
capital required or expected to be maintained by the LC Issuer or such Lender or
any corporation controlling the LC Issuer or such Lender and (taking into
consideration the LC Issuer's or such Lender's or such corporation's policies
with respect to capital adequacy and the LC Issuer or such Lender's desired
return on capital) determines that the amount of such capital is increased or
its rate of return is decreased as a consequence of its Commitment, loans,
credits or obligations under this Agreement, then, within five Business Days
after demand, which demand shall include the certificate required by Section 4.6
of the LC Issuer or such Lender to the Borrower through the Administrative
Agent, the Borrower shall pay to the LC Issuer or such Lender, from time to time
as specified by the Lender, additional amounts sufficient to compensate the LC
Issuer or such Lender for such increase; provided that the Borrower shall not be
obligated to pay any additional amounts which were incurred by the LC Issuer or
such Lender more than 90 days prior to the date of such request.
SECTION 4.4 Funding Losses. The Borrower shall reimburse each Lender
and hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Eurodollar Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a
Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation that includes a Eurodollar
Rate Loan;
(c) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Section 2.6) or other
payment (including after acceleration thereof) of a Eurodollar Rate Loan on a
day that is not the last day of the relevant Interest Period; or
35
(e) the automatic conversion under Section 2.5 of any Eurodollar Rate Loan
to a Base Rate Loan on a day that is not the last day of the relevant Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. For
purposes of calculating amounts payable by the Borrower to the Lenders under
this Section and under Section 4.3(a), each Eurodollar Rate Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the Eurodollar Base Rate used in
determining the Eurodollar Rate for such Eurodollar Rate Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan is in fact so funded.
SECTION 4.5 Inability to Determine Rates. If the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or the Administrative Agent determines (or
the Required Lenders advise the Administrative Agent) that the Eurodollar Rate
applicable pursuant to Section 2.7(a) for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan does not adequately and fairly
reflect the cost to the Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrower and each Lender. Thereafter, the obligation
of the Lenders to make or maintain Eurodollar Rate Loans, as the case may be,
hereunder shall be suspended until the Administrative Agent revokes such notice
in writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/ Continuation then submitted by it. If the
Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Eurodollar Rate Loans.
SECTION 4.6 Certificates of Lenders. Any Person claiming reimbursement or
compensation under this Article IV shall deliver to the Borrower (with a copy to
the Administrative Agent) a certificate setting forth in reasonable detail the
basis for such claim and a calculation of the amount payable to such Person
hereunder and such certificate shall be conclusive and binding on the Borrower
in the absence of manifest error.
SECTION 4.7 Substitution of Lenders; LC Issuer. (a) Upon the receipt by the
Borrower from any Lender (an "Affected Lender") of a claim for compensation
under Section 4.1, 4.2 or 4.3 the Borrower may: (i) request the Affected Lender
to use its reasonable efforts to obtain a replacement bank or financial
institution satisfactory to the Borrower to acquire and assume all or a ratable
part of all of such Affected Lender's Loans, LC Obligations and Commitment (a
"Substitute Lender"); (ii) request one more of the other Lenders to acquire and
assume all or part of such Affected Lender's Loans, LC Obligations and
Commitment; or (iii) designate a Substitute Lender. Any such designation of a
Substitute Lender under clause (i) or (iii) shall be
36
subject to the prior written consent of the Administrative Agent and the LC
Issuer (which consent shall not be unreasonably withheld).
(b) In the event the LC Issuer ceases to be rated AA- or better by
S&P, the Borrower, at its cost and expense, may request the LC Issuer to assign
its obligations hereunder to another financial institution who is rated AA- or
higher.
SECTION 4.8 Survival. The agreements and obligations of the Borrower in
this Article IV shall survive the payment of all other Obligations.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make Credit
Extensions hereunder, the Borrower represents and warrants to each Lender that:
SECTION 5.1 Due Organization, Authorization, etc. Each of the Borrower and
each Material Subsidiary (a) is duly organized, validly existing and (to the
extent applicable) in good standing under the laws of its jurisdiction of
formation, (b) 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, (c) has the
requisite corporate power and authority and the right to own and operate its
properties, to lease the property it operates under lease, and to conduct its
business as now and proposed to be conducted, and (d) has obtained all material
licenses, permits, consents or approvals from or by, and has made all filings
with, and given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct
(including, without limitation, the consummation of the transactions
contemplated by this Agreement) as to each of the foregoing, except where the
failure to do so would not have a Material Adverse Effect. The execution,
delivery and performance by the Borrower of this Agreement and the consummation
of the transactions contemplated hereby and thereby are within its corporate
powers and have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval, if required). Each of the
Borrower and its 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 Requirements 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 5.1 that this Agreement and the other Loan Documents have been validly
executed and delivered by each of the parties thereto other than the Borrower.
Schedule
37
5.1 sets forth all the jurisdictions in which the Borrower and each Material
Subsidiary are qualified to do business as of the Amendment Effective Date.
SECTION 5.2 Statutory Financial Statements. The Annual Statement of each
Material Insurance Subsidiary (including, without limitation, the provisions
made therein for investments and the valuation thereof, reserves, policy and
contract claims and statutory liabilities) as filed with the appropriate
Governmental Authority of its jurisdiction of domicile (the "Department")
delivered to each Lender prior to the execution and delivery of this Agreement,
as of and for the 2002 Fiscal Year (the "Statutory Financial Statements"), have
been prepared in accordance with SAP applied on a consistent basis (except as
noted therein). Each such Statutory Financial Statement was in compliance with
all applicable Requirements of Law when filed. The Statutory Financial
Statements fairly present the financial position, the results of operations and
changes in equity of each Material Insurance Subsidiary as of and for the
respective dates and periods indicated therein in accordance with SAP applied on
a consistent basis, except as set forth in the notes thereto or on Schedule 5.2.
Except for liabilities and obligations, including, without limitation, reserves,
policy and contract claims and statutory liabilities (all of which have been
computed in accordance with SAP), disclosed or provided for in the Statutory
Financial Statements, the Material Insurance Subsidiaries did not have, as of
the respective dates of each of such financial statements, any liabilities or
obligations (whether absolute or contingent and whether due or to become due)
which, in conformity with SAP, applied on a consistent basis, would have been
required to be or should be disclosed or provided for in such financial
statements. All books of account of each Material Insurance Subsidiary fully and
fairly disclose all of the transactions, properties, assets, investments,
liabilities and obligations of such Material Insurance Subsidiary and all of
such books of account are in the possession of each Material Insurance
Subsidiary and are true, correct and complete in all material respects.
SECTION 5.3 GAAP Financial Statements. (a) The audited consolidated
financial statements of the Borrower and its Subsidiaries for the Fiscal Year
ending December 31, 2002 and the unaudited consolidated financial statements of
the Borrower and its Subsidiaries for the six months ended June 30, 2003 which
have been delivered to the Lenders (i) are true and correct in all material
respects, and (ii) present fairly in accordance with GAAP (except as disclosed
therein and, in the case of interim financial statements, subject to normal
year-end adjustments and except that footnote and schedule disclosure may be
abbreviated) the financial position and results of operations of the Borrower
and its consolidated Subsidiaries at such dates for the periods then ended and
the investments and reserves for the periods then ended.
(b) With respect to any representation and warranty which is deemed to
be made after the date hereof by the Borrower, the balance sheet and statements
of operations, of shareholders' equity and of cash flow, which as of such date
shall most recently have been furnished by or on behalf of the Borrower to each
Lender for the purposes of or in connection with this Agreement or any
transaction contemplated hereby, shall have been prepared in accordance with
GAAP consistently applied (except as disclosed therein and, in the case of
interim financial statements, for the absence of footnote disclosures), and
shall present fairly the consolidated financial condition of the corporations
covered thereby as at the dates thereof for
38
the periods then ended, subject, in the case of quarterly financial statements,
to normal year-end audit adjustments.
(c) Except as set forth on Schedule 5.3, 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, 2002; provided, however, that, so long as no
violation of Section 7.2 shall have occurred and be continuing as a result
thereof, the occurrence of losses that give rise to or result in Excess
Catastrophe Losses shall not be deemed to have a Material Adverse Effect.
SECTION 5.4 Litigation and Contingent Liabilities. (a) Except as set forth
(including estimates of the dollar amounts involved) in Schedule 5.4 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 any of its Subsidiaries, threatened against
the Borrower or such Subsidiary (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 5.4, the Borrower has no material
Contingent Liabilities not provided for or referred to in the financial
statements delivered pursuant to Section 5.3.
SECTION 5.5 ERISA. (a) 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
ERISA and the Code, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No ERISA Event (i) has occurred and is continuing, or (ii) to the knowledge of
the Borrower, is reasonably expected to occur with respect to any Plan or
Multiemployer Plan.
(b) 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"), (i) 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 (ii) 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 in a
Material Adverse Effect. No event that could reasonably be considered the
substantive
39
equivalent of an ERISA Event with respect to any Foreign Government Scheme or
Arrangement or Foreign Plan (i) has occurred and is continuing, or (ii) to the
knowledge of the Borrower, is reasonably expected to occur.
SECTION 5.6 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled by an
investment company," within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not engaged in the "investment business" as defined
in Xxx Xxxxxxxxxx Xxxxxxxx Xxx 0000.
SECTION 5.7 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 Credit Extensions or the use of proceeds of the Credit
Extensions to violate Regulations U or X of the FRB.
SECTION 5.8 Proceeds. The proceeds of the Loans will be used for general
corporate purposes. Letters of Credit issued hereunder will be used solely to
secure the obligations of the Borrower's Insurance Subsidiaries or, upon receipt
of an opinion of Bermuda counsel satisfactory to the Administrative Agent in its
sole discretion, the Borrower, in providing synthetic cover of catastrophe risks
through one or more Catastrophe Bonds (other than Catastrophe Bonds described in
clause (b) of the definition thereof). 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.
SECTION 5.9 Insurance. The Borrower and its Material Subsidiaries are in
substantial compliance with all material conditions contained in their Insurance
Policies.
SECTION 5.10 Ownership of Properties. On the date of any Credit Extension,
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.
SECTION 5.11 Business Locations. Schedule 5.11 lists each of the locations
where the Borrower maintains an office, a place of business or any records as of
the Amendment Effective Date.
SECTION 5.12 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 Administrative 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 Administrative Agent or the Lenders will be,
true and accurate in every material respect on the date as of which such
information is dated or certified
40
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.
SECTION 5.13 Subsidiaries. Schedule 5.13 as updated from time to time
pursuant to Section 6.1(l) contains a complete list of the Borrower's
Subsidiaries, indicating which Subsidiaries are Material Subsidiaries and
Insurance Subsidiaries.
SECTION 5.14 Insurance Licenses. Schedule 5.14 lists all of the
jurisdictions in which any of the Material Insurance Subsidiaries hold licenses
(including, without limitation, licenses or certificates of authority from
applicable Departments), permits or authorizations to transact insurance and
reinsurance business (collectively, the "Licenses") and indicates the line or
lines of insurance which each such Material Insurance Subsidiary is permitted to
be engaged in with respect to each License therein listed as of the Amendment
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 5.14, 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 Department where such suspension or revocation
would have a Material Adverse Effect.
SECTION 5.15 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 5.15 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 5.15, on the Amendment 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 5.15, 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.
41
SECTION 5.16 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 Loans or any other Obligation 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 Loans or
any other liability to registration under the Securities Act of 1933, as
amended.
SECTION 5.17 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.
SECTION 5.18 Tax Shelter Regulations. The Borrower does not intend to
treat the Loans and/or Letters of Credit as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Administrative Agent thereof. If the Borrower so notifies
the Administrative Agent, the Borrower acknowledges that one or more of the
Lenders may treat its Loans and/or Letters of Credit as part of a transaction
that is subject to Treasury Regulation Section 301.6112-1, and such Lender or
Lenders, as applicable, will maintain the lists and other records required by
such Treasury Regulation.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Loans and all other Obligations are paid in full, and
until the Commitment Termination Date, the Borrower agrees that, unless at any
time the Required Lenders shall otherwise expressly consent in writing, it will:
SECTION 6.1 Reports, Certificates and Other Information. Furnish or
cause to be furnished to the Administrative Agent and the Lenders:
(a) GAAP Financial Statements:
(i) 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 sheet of the Borrower and its
Subsidiaries, as of the close of such quarter and the related
consolidated statements of income, cash flows and changes in
shareholders' equity for that portion of the Fiscal Year ending as of
the close of such Fiscal Quarter, all prepared
42
in accordance with GAAP (subject to normal year-end adjustments and
except that footnote and schedule disclosure may be abbreviated) and,
with respect to Material Subsidiaries (other than RIHL), the related
unaudited consolidating balance sheets and statements of income 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 financial position and
results of operations of the Borrower and its consolidated Subsidiaries
as at the end of such Fiscal Quarter and for the period then ended.
(ii) Within 95 days after the close of each Fiscal Year, a copy
of the annual financial statements of the Borrower and its
Subsidiaries, consisting of audited consolidated balance sheet,
statements of income, cash flows and changes in shareholders' equity
and, with respect to Material Subsidiaries (other than RIHL), unaudited
consolidating balance sheets and statements of income, setting forth in
comparative form the consolidated figures for the previous Fiscal Year,
which financial statements shall be prepared in accordance with GAAP,
and accompanied by a certification 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 financial position and
results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as at the end of such Fiscal Year and for the
period then ended.
(iii) On each date that financial statements are delivered
pursuant to Section 6.1(a)(i) or (ii), a schedule in form and substance
satisfactory to the Administrative 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.
(b) Tax Returns. If requested by the Administrative 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.
(c) SAP Financial Statements. Within (i) 5 days after the date
filed with the Regulator 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 for such
Fiscal Year, if any, required by such Department 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
43
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.
(d) 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 Event of 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 Event of Default or development or information,
including the anticipated effect thereof, which notice shall be promptly
confirmed in writing within two (2) Business Days.
(e) Other Information. The following certificates and other
information related to the Borrower:
(i) Within five (5) Business Days of receipt, a copy of any
financial examination reports by a Governmental Authority with respect
to the Material Insurance Subsidiaries relating to the insurance
business of the 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 Administrative
Agent within 90 days of any such interim report.
(ii) 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.
(iii) 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.
(iv) 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
44
(v) 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.
(vi) Promptly after the Borrower has notified the Administrative
Agent of any intention by the Borrower to treat the Loans and/or
Letters of Credit as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4), a duly completed copy
of IRS Form 8886 or any successor form.
(vii) Promptly, such additional financial and other information
as the Administrative Agent may from time to time reasonably request.
(f) Compliance Certificates. (i) Concurrently with the delivery
to the Administrative Agent of the GAAP financial statements under Sections
6.1(a)(i) and 6.1(a)(ii), 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 Administrative 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
financial ratios and restrictions contained in Sections 7.1 (including, during
any Excess Loss Period, both the Debt to Capital Ratio and the Alternate Debt to
Capital Ratio), 7.2, 7.10 and 7.11 and to the effect that, to the best of such
officer's knowledge, as of such date no Default or Event of Default has occurred
and is continuing.
(ii) At any time the Borrower Net Worth is below $1,000,000,000,
within ten days following the end of each such calendar month in which
the Borrower Net Worth is below $1,000,000,000 the Borrower shall
deliver to the Administrative Agent a duly completed Monthly Reporting
Certificate, signed by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower, containing a
computation of, and showing compliance with each of the applicable
financial ratios and restrictions contained in Section 7.1 (including,
during any Excess Loss Period, both the Debt to Capital Ratio and the
Alternate Debt to Capital Ratio), 7.2, 7.10 and 7.11, and to the effect
that, to the best of such officer's knowledge as of such date no
Default or Event of Default has occurred and is continuing.
(iii) At any time the Reinsurance Net Worth is below
$500,000,000, within ten days after the end of each such calendar month
in which the Reinsurance Net Worth is below $500,000,000, the Borrower
shall deliver to the Administrative Agent a duly completed Monthly
Reporting Certificate, signed by the chief executive officer, chief
financial officer, treasurer or controller of the Borrower or the
president of Renaissance Reinsurance Ltd., containing a computation of
the Reinsurance Net Worth.
(iv) During any Restricted Period, the Borrower shall deliver to
the Administrative Agent a certificate (a "Net Worth Increase
Certificate") within ten days of the date the Borrower closes any
equity issuance which certificate shall be signed by the chief
executive officer, chief financial officer or treasurer of the Borrower
and shall
45
calculate the Borrower Net Worth (after giving effect to such equity
issuance) and the Debt to Capital Ratio.
(g) Reports to SEC and to Shareholders. Promptly upon the
filing or making thereof copies of (i) 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 (ii) each communication from the
Borrower to shareholders generally.
(h) Notice of Litigation, License 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: (i) 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, (ii) an
ERISA Event, and an event with respect to any Plan which could result in the
incurrence by the Borrower or any Material Subsidiary of any material liability
(other than a liability for contributions or premiums), fine or penalty, (iii)
the commencement of any dispute which might lead to the modification, transfer,
revocation, suspension or termination of this Agreement or any Loan Document or
(iv) any event which could be reasonably expected to have a Material Adverse
Effect.
(i) 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.
(j) List of Directors and Officers and Amendments. Concurrently
with the delivery of the financial statements required pursuant to Section
6.1(a)(i) and (ii), (i) a list of the Executive Officers and Directors of the
Borrower and (ii) copies of any amendments to the Organization Documents to the
extent such information is not included in the information provided pursuant to
Section 6.1(g) and to the extent such information has changed since the last
delivery pursuant to this Section.
(k) New Subsidiaries. Promptly (i) upon formation or
acquisition of any Subsidiary with an initial 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.
(l) Updated Schedules. From time to time, and in any event
concurrently with delivery of the financial statements under Section 6.1(a)(i)
and (ii), a revised 5.13, if applicable, showing changes from the Schedule 5.13
previously delivered.
46
(m) Other Information. From time to time such other information
concerning the Borrower or any Subsidiary as the Administrative Agent or any
Lender may reasonably request.
Documents required to be delivered pursuant to this Section 6.1 may be delivered
electronically (provided such documents contain any required signatures) and if
so delivered shall be deemed to have been delivered on the date on which
documents are posted on the Borrower's behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); provided that (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance, the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.1(f)
to the Administrative Agent and each of the Lenders. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or maintain copies of the documents referred to above, and in any event
shall have no responsibility to monitor compliance by the Borrower with any such
requests for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.
SECTION 6.2 Corporate Existence; Foreign Qualification. Do and cause to
be done at all times all things necessary to (a) 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 (b) be, and ensure that each Material Subsidiary of
the Borrower is, duly 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.
SECTION 6.3 Books, Records and Inspections. (a) Maintain, and cause
each of its Subsidiaries to maintain, materially complete and accurate books and
records in accordance with GAAP and in addition, with respect to each Insurance
Subsidiary, SAP, (b) permit, and cause each of its Subsidiaries to permit,
access at reasonable times and, except during the continuance of an Event of
Default, upon reasonable notice, by the Administrative Agent to its books and
records, (c) permit, and cause each of its Subsidiaries to permit, the
Administrative Agent or its designated representative to inspect at reasonable
times and, except during the continuance of an Event of Default, upon reasonable
notice, its properties and operations, and (d) permit, and cause each of its
Subsidiaries to permit, the Administrative Agent to discuss its business,
operations and financial condition with its officers and its independent
accountants.
47
SECTION 6.4 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.
SECTION 6.5 Taxes and Liabilities. Pay, and cause each of its
Subsidiaries to pay, when due all material taxes, assessments and other material
liabilities except as contested in good faith and by appropriate proceedings
with respect to which reserves have been established, and are being maintained,
in accordance with GAAP except where failure to pay would not have a Material
Adverse Effect.
SECTION 6.6 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.
SECTION 6.7 Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, (a) with all Requirements of Law related to its
businesses (including, without limitation, the establishment of all insurance
reserves required to be established under SAP and applicable laws restricting
the investments of the Borrower and its Subsidiaries), and (b) with all
Contractual Obligations binding upon such entity, except in each of clauses (a)
and (b) where failure to so comply would not in the aggregate have a Material
Adverse Effect.
SECTION 6.8 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 7.3 or (y) where failure to maintain the same would not
have a Material Adverse Effect.
SECTION 6.9 Conduct of Business. Engage, and cause each Material
Subsidiary (other than RIHL) to engage, primarily in insurance and reinsurance
business and related activities.
ARTICLE VII
NEGATIVE COVENANTS
Until the Loans and all other Obligations are paid in full and until
the Commitment Termination Date, the Borrower agrees that, unless at any time
the Required Lenders shall otherwise expressly consent in writing, it will:
SECTION 7.1 Debt to Capital Ratio. Not permit (a) the Debt to Capital
Ratio (excluding RenRe Catastrophe-Linked Securities) to exceed .35:1 or (b) the
Debt to Capital Ratio (including RenRe Catastrophe-Linked Securities) to exceed
..45:1, provided, however, that during any Excess Loss Period, no Default or
Event of Default shall occur unless the (i) the Alternate Debt to Capital Ratio
(excluding RenRe Catastrophe-Linked Securities) exceeds .35:1 or (ii) Alternate
Debt to Capital Ratio (including RenRe Catastrophe-Linked Securities) exceeds
..45:1.
48
SECTION 7.2 Net Worth. (a) Not permit Borrower Net Worth to be less
than $1,000,000,000, provided, however, that if Borrower Net Worth drops below
$1,000,000,000 but is equal to or greater than $750,000,000, no Default or Event
of Default shall occur until the earlier of (i) the date Borrower Net Worth
drops below $750,000,000 and (ii) six months from the date Borrower Net Worth
dropped below $1,000,000,000 if Borrower Net Worth continues to be less than
$1,000,000 (in each case, as reported in the Monthly Reporting Certificates).
(a) Reinsurance Net Worth. Not permit Reinsurance Net Worth to
be less than $500,000,000, provided, however, that if Reinsurance Net Worth
drops below $500,000,000 but is equal to or greater than $375,000,000, no
Default or Event of Default shall occur until the earlier of (i) the date
Reinsurance Net Worth drops below $375,000,000 and (ii) six months from the date
Reinsurance Net Worth dropped below $500,000,000 if Reinsurance Net Worth
continues to be less than $375,000,000 (in each case, as reported in the Monthly
Reporting Certificates).
SECTION 7.3 Mergers, Consolidations and Sales. Not, and not permit any
of its Subsidiaries to, (a) 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 (other than a newly
formed Subsidiary or the acquisition of a Subsidiary which complies with clause
(b)(ii) of this Section 7.3 or the acquisition of shares of a Subsidiary held by
minority shareholders), or (b) 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 (i) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of any wholly owned Subsidiary into, with or to
any other wholly owned Subsidiary, (ii) purchases or acquisitions which comply
with Section 6.9 provided (x) no Default or Event of 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 Borrower 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 proforma basis giving effect to
such acquisition or purchase) and (z) the aggregate purchase price of all
purchases and acquisitions after the Amendment Effective Date does not exceed
100% of Borrower 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 (iii) 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 no Default or Event of Default has occurred and is
continuing.
SECTION 7.4 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 Credit Extensions.
49
SECTION 7.5 Other Agreements. Not, and not permit any of its Subsidiaries
to, enter into any agreement containing any provision which would be violated or
breached by the performance of obligations hereunder or under any instrument or
document delivered or to be delivered by it hereunder or in connection herewith.
SECTION 7.6 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 there shall be excluded from the foregoing restrictions (a)
transactions between the Borrower and the Joint Venture and any wholly-owned
Subsidiary of the Borrower or between any wholly-owned Subsidiaries of the
Borrower or between any wholly-owned Subsidiary of the Borrower and the Joint
Venture and (b) transactions expressly contemplated by written contracts between
the Borrower and its non-wholly owned Subsidiaries and Affiliates provided the
aggregate net amount paid by the Borrower and its Subsidiaries thereunder does
not exceed $10,000,000 in any Fiscal Year.
SECTION 7.7 Liens. Not, and not permit any of its Subsidiaries to, create
or permit to exist any Lien with respect to any assets now or hereafter existing
or acquired, except the following: (i) Liens for current taxes not delinquent or
for taxes being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (ii) easements, party wall agreements,
rights of way, restrictions, 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; (iii)
Liens in connection with the acquisition of fixed assets after the date hereof
and attaching only to the property being acquired, (iv) 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, (v) 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, (vi) 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),
(vii) Liens listed on Schedule 7.7 in effect on the date hereof; (viii)
attachments, judgments and other similar Liens for sums not exceeding
$50,000,000 (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); (ix) attachments,
judgments and other similar Liens for sums of $50,000,000 or more (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 Liens on assets
of Subsidiaries that are not Material Subsidiaries) 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
50
off; (x) Liens pursuant to the Loan Documents and (xi) Liens granted in
connection with a letter of credit facility entered into by the Borrower or
Renaissance Reinsurance Ltd. in connection with the investment in the Joint
Venture provided the value of the collateral in which Liens are granted
thereunder does not exceed 105% of the amount secured; provided, however, that,
no Lien shall be permitted to exist on the shares of stock of any Insurance
Subsidiary.
SECTION 7.8 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 7.7 (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.
SECTION 7.9 No Amendment of Certain Documents. Not enter into or permit to
exist any amendment, modification or waiver of the Organization Documents of the
Borrower or RIHL as in effect on the Amendment Effective Date which would (a)
create or amend redemption provisions applicable to the Borrower's capital stock
or the preferred stock referred to in clause (b) of the definition of "Borrower
Net Worth" to provide for mandatory redemption or redemption at the option of
the holder prior to the Commitment Termination Date as such date may be extended
or (b) in any manner be materially adverse to the interests of the Lenders.
SECTION 7.10 Dividends, Etc.. Not, and not permit its Subsidiaries to, (a)
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), (b) 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 and
redemptions by RIHL of its redeemable preference shares), (c) purchase or redeem
or prepay, prior to its scheduled payment date, any Debt (other than the Credit
Extensions), or (d) set aside funds for any of the foregoing (collectively
"Restricted Payments"); except that (i) the Borrower may declare or pay
dividends on any of its Common Shares in an amount not to exceed $22,500,000 in
any Fiscal Quarter provided (x) no Default or Event of Default has occurred and
is continuing on the date the Borrower declares such dividend and (y) after
giving effect to such dividend payment, Borrower Net Worth will be in excess of
$1,000,000,000, (ii) the Borrower may declare or pay any Restricted Payment
described in clauses (a), (b) or (c) above provided (x) no Default or Event of
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, Borrower Net Worth exceeds $1,400,000,000 and (iii) any
Insurance Subsidiary may pay any Restricted Payment described in clause (b)
above on a non prorata basis provided no Default or Event of Default has
occurred and is continuing on the date of such payment.
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SECTION 7.11 Contingent Liabilities. Not, and not permit its Subsidiaries
to, incur Contingent Liabilities in an aggregate principal amount in excess of
$225,000,000 at any time.
SECTION 7.12 Investments in DaVinci Entities. Not, and not permit its
Subsidiaries to, (i) incur Contingent Liabilities or otherwise provide credit
support (including granting a Lien on any of its assets) for the Debt of
DaVinciRe Holdings Ltd. or DaVinci Reinsurance Ltd. at any time or (ii) make any
loans to purchase or redeem any capital stock of or otherwise make any
investment in DaVinciRe Holdings Ltd. or DaVinci Reinsurance Ltd. during the
existence or continuation of any Default or Event of Default.
ARTICLE VIII
EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 8.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
(a) Non-Payment of Loan. Default in the payment when due of any
principal on the Loans or any Reimbursement Obligation.
(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
Credit Extensions, fees or of any other amount payable hereunder or under the
Loan Documents.
(c) Non-Payment of Other Debt. (i) Default in the payment when due
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 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 may be
accelerated, by reason of such default or defaults is $50,000,000 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 $50,000,000 or more in the aggregate prior to its expressed
maturity.
(d) Other Material Obligations. Except for obligations covered under
other provisions of this Article VIII, 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 $50,000,000 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.
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(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 60 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 60 days from the entry thereof; or (iv) any of such Persons shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (ii) or (iii) above; or (v)
any Governmental Authority shall issue any order of conservation, supervision or
any other order of like effect relating to any of such Persons.
(f) Non-compliance With Certain Covenants. Failure by the Borrower to
comply with its covenants set forth in Section 7.1, 7.2, 7.8, 7.9, 7.10, 7.11 or
7.12.
(g) 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 VIII) and continuance of such failure for 30 days
after notice thereof from the Administrative Agent to the Borrower.
(h) 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 Administrative 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.
(i) ERISA. Any ERISA Event shall occur or exist with respect to any
Plan or Multiemployer Plan of RenRe 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 $50,000,000.
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(j) 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.
(k) Change in Control. A Change in Control occurs.
(l) Judgments. A final judgment or judgments which exceed an
aggregate of $50,000,000 (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 45 days after entry or filing of such judgment(s).
(m) 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.
SECTION 8.2 Effect of Event of Default. If any Event of Default described
in Section 8.1(e) shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and all Obligations hereunder shall
become immediately due and payable and the Borrower shall become immediately
obligated to deliver to the Administrative Agent for deposit in the LC
Collateral Account pursuant to Section 3.8 cash and/or Permitted Investments in
an amount equal to the aggregate undrawn stated amount of all outstanding
Letters of Credit and to repay all Loans and Reimbursement Obligations, all
without notice of any kind; and, in the case of any other Event of Default, the
Administrative Agent may, and upon the written request of the Required Lenders
shall, terminate the Commitments hereunder and declare all or any portion of the
Credit Extensions and all Obligations to be due and payable and demand that the
Borrower immediately deliver to the Administrative Agent for deposit in the LC
Collateral Account pursuant to Section 3.8 cash and/or Permitted Investments in
an amount equal to the aggregate undrawn stated amount of all outstanding
Letters of Credit and repay all Loans and Reimbursement Obligations, whereupon
the Commitments shall terminate and all or such portion of the Obligations shall
become immediately due and payable and the Borrower shall immediately deliver to
the Administrative Agent for deposit in the LC Collateral Account pursuant to
Section 3.8 cash and/or Permitted Investments in an amount equal to the
aggregate undrawn stated amount of all outstanding Letters of Credit and repay
all Loans and Reimbursement Obligations, all without further notice of any kind.
The Administrative Agent shall promptly advise the Borrower of any such
declaration but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event described in Section 8.1(a) may not be waived except by consent of all
of the Lenders and acknowledged by the Administrative Agent in writing.
SECTION 8.3 LC Collateral Account.
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(a) If at any time after the Borrower has been required to deposit
amounts in the LC Collateral Account, the Administrative Agent determines that
the amount on deposit in the LC Collateral Account is less than the amount
required, the Administrative Agent may demand the Borrower to pay, and the
Borrower shall, upon such demand and without any further notice, pay to the
Administrative Agent for deposit in the LC Collateral Account, funds necessary
to cure any shortfall.
(b) The Administrative Agent may, at any time or from time to time,
after funds are deposited in the LC Collateral Account apply such funds to the
payment of the Obligations then due and payable by the Borrower to the Lenders
or the LC Issuer under the Loan Documents.
(c) Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the LC Collateral Account until all of the Obligations have been indefeasibly
paid in full, the Commitments have been terminated and all Letters of Credit
have been terminated or expired, at which time any funds remaining in the LC
Collateral Account shall be returned by the Administrative Agent to the
Borrower.
ARTICLE IX
CONDITIONS
SECTION 9.1 Conditions to Occurrence of the Amendment Effective Date. The
occurrence of the Amendment Effective Date shall be subject to receipt by the
Administrative Agent of all of the following, each duly executed and dated the
Amendment Effective Date (or such earlier date as shall be satisfactory to the
Administrative Agent), each in form and substance satisfactory to the
Administrative Agent (with such copies as the Administrative Agent shall
request):
(a) This Agreement and Certain Related Documents. This Agreement and
such other Loan Documents as are required to be delivered by the terms of this
Agreement.
(b) Resolutions. Certified copies of resolutions of the Board of
Directors of the Borrower authorizing the execution, delivery and performance,
respectively, of those documents and matters required of it with respect to this
Agreement or the other Loan Documents.
(c) Incumbency and Signatures. A certificate of an Authorized Officer
certifying the names of the individual or individuals authorized to sign this
Agreement and the other Loan Documents, together with a sample of the true
signature of each such individual. (The Lenders may conclusively rely on each
such certificate until formally advised by a like certificate of any changes
therein.)
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(d) Opinion of Counsel. The opinion of (i) Xxxxxxx Xxxx & Xxxxxxxxx,
New York counsel to the Borrower and (ii) Xxxxxxx, Xxxx & Xxxxxxx, Bermuda
counsel to the Borrower, in each case addressed to the Administrative Agent, the
LC Issuer and the Lenders in form and substance satisfactory to the
Administrative Agent and its counsel.
(e) Organization Documents, etc. A Certificate of an Authorized
Officer certifying true and correct copies of the Organization Documents of the
Borrower.
(f) Insurance Proceedings. Certificate of an Authorized Officer that
there are no material insurance regulatory proceedings pending or, to the
knowledge of the Borrower, threatened against the Borrower or any Material
Insurance Subsidiary in any jurisdiction.
(g) Material Adverse Change Certificate. An officer's certificate,
signed by an Authorized Officer, certifying that to such officer's best
knowledge, since December 31, 2002, 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.
(h) Clear Markets. The Administrative Agent and the Arranger, in
their sole discretion, have determined that there has been no material
disruption of or a material adverse change in conditions in the financial,
banking or capital markets deemed material in connection with the syndication of
this Agreement.
(i) No Competing Offers. There shall be no competing offering,
placement or arrangement of any Debt by or on behalf of the Borrower during the
period from June 19, 2003 through the Amendment Effective Date.
(j) Other. Such other documents as the Administrative Agent may
reasonably request.
SECTION 9.2 Conditions to All Borrowings. The obligation of the Lenders to
make all Credit Extensions shall be subject to the prior or concurrent
satisfaction (in form and substance satisfactory to the Administrative Agent) of
each of the conditions precedent set forth below:
(a) No Default. No Default or Event of Default shall have occurred
and be continuing or will result from the making of the Credit Extensions and no
Default or Event of Default shall have occurred and be continuing under the Loan
Documents or will result from the making of the Credit Extensions.
(b) Warranties and Representations. (i) All warranties and
representations contained in this Agreement (other than Section 5.4 except in
the case of the initial Borrowing) shall be true and correct in all material
respects as of the date of any Loan, with the same effect as though made on the
date of and concurrently with the making of such Loan (except where such
representation speaks as of specified date) and (ii) all covenants contained
herein and in such documents to be performed by each of the parties thereto
(other than the Administrative Agent or the Lenders) prior to the date of any
Loan shall have been performed.
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(c) Litigation. (i) No litigation (including, without limitation,
derivative actions), arbitration, governmental investigation or proceeding or
inquiry shall be, on the date of any Loan, pending, or to the knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries which seeks
to enjoin or otherwise prevent the consummation of, or to recover any damages or
to obtain material relief as a result of, the transactions contemplated
hereunder or, in the reasonable opinion of the Required Lenders, could be
reasonably expected to be materially adverse to any of the parties to this
Agreement and which is not Ordinary Course Litigation, and (ii) in the
reasonable opinion of the Required Lenders, no material adverse development
shall have occurred in any litigation (including, without limitation, derivative
actions), arbitration, government investigation or proceeding or inquiry
disclosed in Schedule 5.4 which is likely to have a Material Adverse Effect.
(d) Fees. The fees referred to in Section 2.8 which are due and
payable on or prior to the Amendment Effective Date or the date of any Loan
shall have been paid to the Administrative Agent, where applicable, for the
benefit of the Lenders.
(e) Notice of Borrowing. The Administrative Agent shall have received
a Notice of Borrowing in form and substance acceptable to the Administrative
Agent.
(f) Restricted Period. If such Credit Extension is being requested
during a Restricted Period, the Borrower shall not have incurred any Debt during
the applicable Excess Loss Period other than Debt under either this Agreement, a
Contingent Catastrophe Debt Agreement or both, provided the aggregate principal
amount outstanding under all such Contingent Catastrophe Debt Agreements cannot
exceed $300,000,000.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 Appointment and Authorization. (a) Each of the LC Issuer and
each Lender hereby irrevocably (subject to Section 10.9) appoints, designates
and authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together with such powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with the LC Issuer or any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
(b) The LC Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the LC Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article X
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with respect to any acts taken or omissions suffered by the LC Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term "Administrative Agent" as used in this
Article X and in the definition of "Agent-Related Person" included the LC Issuer
with respect to such acts or omissions, and (ii) as additionally provided herein
with respect to the LC Issuer.
SECTION 10.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct. Without limiting the generality of the foregoing sentence, the use
of the term "agent" herein and in the other Loan Documents with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
SECTION 10.3 Liability of Administrative Agent. None of the Agent-Related
Persons shall (a) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein), or
(b) be responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by the Borrower or any Subsidiary or
Affiliate of the Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Borrower or any of the Borrower's Subsidiaries or Affiliates.
SECTION 10.4 Reliance by Administrative Agent. (a) The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
electronic mail message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action
58
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 9.1, the LC Issuer and each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the LC Issuer or
such Lender unless the Administrative Agent shall have received notice from the
LC Issuer or such Lender prior to the proposed Amendment Effective Date
specifying its objection thereto.
SECTION 10.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal,
Reimbursement Obligations, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender, the LC Issuer or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Lenders in accordance with
Article VIII; provided, however, that unless and until the Administrative Agent
has received any such request, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
SECTION 10.6 Credit Decision. Each of the LC Issuer and the Lenders
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by the Administrative Agent hereinafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.
The LC Issuer and each Lender represents to the Administrative Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower
59
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the LC Issuer and the Lenders by the Administrative Agent, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower or any of its Affiliates which may come into the possession of any of
the Agent-Related Persons.
SECTION 10.7 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the LC Issuer and the Lenders
shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), pro rata, from and against any and all Indemnified
Liabilities; provided, however, that neither the LC Issuer nor any Lender shall
be liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities to the extent determined in a final nonappealable
judgment of a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.
SECTION 10.8 Administrative Agent in Individual Capacity. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with the Borrower and its Subsidiaries and Affiliates as though Bank of America
were not the Administrative Agent hereunder and without notice to or consent of
the Lenders. The LC Issuer and the Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
the Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Credit Extensions, Bank of
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America shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" include Bank of America in its individual
capacity.
SECTION 10.9 Successor Administrative Agent. The Administrative Agent may,
and at the request of the Required Lenders shall, resign as Administrative Agent
upon 30 days' notice to the Lenders. If the Administrative Agent resigns under
this Agreement, the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall be approved by the
Borrower. If no successor agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders and the Borrower, a successor agent from among
the Lenders. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article X and Sections 11.4 and
11.5 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
agent has accepted appointment as Administrative Agent by the date which is 30
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.
SECTION 10.10 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower, the Administrative Agent (irrespective of
whether the principal of any Loan or LC Obligation shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
the Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, LC Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.8 and 11.4) allowed in such
judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.8 and 11.4.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
SECTION 10.11 Syndication Agent and Documentation Agent. The Lenders
identified on the facing page or signature pages of this Agreement as
"syndication agent" or "documentation agent" shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, no
Lender so identified as a "syndication agent" or "documentation agent" shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Required Lenders (or by the
Administrative Agent at the written request of the Required Lenders) and the
Borrower and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall:
(a) waive any conditions set forth in Section 9.1(a) without the
written consent of each Lender;
(b) increase or extend the Commitment of any Lender or reinstate any
Commitment terminated pursuant to Section 8.2 without the consent of such Lender
or extend the expiry date of any Letter of Credit to a date after the Commitment
Termination Date without the written consent of each Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, Reimbursement Obligation, interest, fees
or other amounts due to
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the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein,
or (subject to clause (iii) below) any fees or other amounts payable hereunder
or under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of all
Lenders shall be necessary to amend any provision relating to or to waive any
obligation of the Borrower to pay interest at the default rate;
(e) change Section 2.11 in a manner which would alter the pro rata
sharing of payments required thereby without the written consent of each Lender;
or
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document, (ii)
no amendment of any provision relating to the LC Issuer shall be effective
without the consent of the LC Issuer, and (iii) the Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed only by the
parties thereto.
SECTION 11.2 General. (a) Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed or delivered to the applicable address, facsimile number or (subject to
subsection (c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent or the LC Issuer, to
the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 11.2 or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 11.2 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent and the LC Issuer.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by
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courier, when signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered; provided,
however, that notices and other communications to the Administrative Agent and
the LC Issuer pursuant to Article II or Article III, as applicable, shall not be
effective until actually received by such Person. In no event shall a voicemail
message be effective as a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to any Requirements of Law,
have the same force and effect as manually-signed originals and shall be binding
on the Borrower, the Administrative Agent, the LC Issuer and the Lenders. The
Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.1, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose. Notices given pursuant to Sections 2.4, 2.5 and 2.6
may only be delivered by electronic mail with the prior consent of the
Administrative Agent.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent, the LC Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Notices of Borrowing and Notices of
Conversion/Continuation) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify each Agent-Related Person,
the LC Issuer and each Lender from all losses, costs and expenses resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower other than funding losses which losses are subject to the
provisions of Section 4.4. All telephonic notices to and other communications
with the servicing group of the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording. In addition, telephonic calls may be recorded with the consent of the
parties to such call.
SECTION 11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, the LC Issuer or
any Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
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remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 11.4 Costs and Expenses. The Borrower shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Administrative Agent) and the Arranger within ten Business Days after demand for
all reasonable costs and expenses incurred by Bank of America (including in its
capacity as Administrative Agent) and the Arranger in connection with the
development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver, consent or modification to (in each case, whether
or not consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by Bank of America (including in its capacity as Administrative
Agent) and the Arranger with respect thereto; and
(b) pay or reimburse the Administrative Agent, the LC Issuer and each
Lender within ten Business Days after demand for all costs and expenses
(including reasonable Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Credit Extensions, and including in any
insolvency proceeding or appellate proceeding). The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and reasonable other out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender. The agreements in this Section shall survive the termination of the
Commitments and repayment of all other Obligations.
SECTION 11.5 Indemnification by the Borrower. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold the Agent-Related Persons, the LC Issuer and each Lender and each of
its respective Affiliates, officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnitee") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any insolvency
proceeding or appellate proceeding) related to or arising out of (a) the
execution, delivery, performance or administration of any Loan Document or any
other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or by the consummation of the transactions
contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or
65
proposed use of the proceeds therefrom (including any refusal by the LC Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), or (c) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto (all of
the foregoing collectively the "Indemnified Liabilities"), in all cases, whether
or not caused by or arising, in whole or in part, out of negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available for Indemnified Liabilities resulting solely from the gross negligence
or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any
damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee or the Borrower have
any liability for any indirect or consequential damages relating to this
Agreement or any other Loan Document, any Commitment, Loan or Letter of Credit
or arising out of its activities in connection herewith or therewith (whether
before or after the Amendment Effective Date) except as otherwise provided in
Article IV hereof. All amounts due under this Section 11.5 shall be payable
within ten Business Days after demand therefor. The agreements in this Section
shall survive the resignation of the Administrative Agent, the replacement of
the LC Issuer or any Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all the other Obligations.
SECTION 11.6 Payments Set Aside. To the extent that the Borrower makes a
payment to the Administrative Agent, the LC Issuer or the Lenders, or the
Administrative Agent, the LC Issuer or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the LC Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
insolvency proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Administrative Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.
SECTION 11.7 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with
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the provisions of subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may at any time and shall, if a Substitute Lender is
designated pursuant to Section 4.7 hereof, assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in LC Obligations) at the time
owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund (as defined in subsection (g) of this Section)
with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $10,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement with respect
to the Loans or the Commitment assigned; (iii) any assignment of a Commitment
must be approved (each such approval not to be unreasonably withheld or delayed)
by the Administrative Agent and the LC Issuer unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 4.1, 4.3, 4.4, 11.4 and 11.5 with
respect to facts and circumstances occurring prior to the effective date of such
assignment). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.
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(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and LC Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in LC
Obligations) owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 11.1 that
directly affects such Participant. Subject to subsection (e) of this Section,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 4.1, 4.3 and 4.4 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.9 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.11 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 4.1 or 4.3 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 4.1 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
11.14 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including
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any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent and the LC
Issuer, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the
Borrower's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary
course of its business.
"Approved Fund" means any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
SECTION 11.8 Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement provided they agree to be bound
by the provisions of this Section or (ii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the Borrower
and its obligations, provided they agree to be bound by the provisions of this
Section or (g) with the consent of the Borrower provided they agree to be bound
by the provisions of this Section or (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower. For purposes of
this Section, "Information" means all information received from the Borrower or
any of its Subsidiaries relating to their respective businesses, other than any
such information that is available to the
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Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. Notwithstanding anything herein to
the contrary, "Information" shall not include, and the Administrative Agent and
each Lender may disclose without limitation of any kind, any information with
respect to the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Administrative Agent or such Lender
relating to such tax treatment and tax structures contemplated hereby; provided
that with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transaction as
well as other information, this sentence shall only apply to such portions of
the document or similar item that relate to the tax treatment or tax structure
of the Loans, Letters of Credit and other transactions contemplated hereby.
SECTION 11.9 Set-off. In addition to any rights and remedies of the
Administrative Agent, the LC Issuer or the Lenders provided by law, if an Event
of Default exists or the Loans have been accelerated, the Administrative Agent,
the LC Issuer and each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Person to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Person, now or hereafter existing, irrespective of whether or not such
Person shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Person exercising
its right of set-off agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.
SECTION 11.10 Notification of Addresses, Lending Offices, Etc. Each party
hereto shall notify the Administrative Agent in writing of any changes in the
address to which notices to such Person should be directed, of addresses of any
Lending Office, of payment instructions in respect of all payments to be made to
it hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
SECTION 11.11 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
(a) Tax Forms. (i) Each Lender that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code (a "Foreign Lender") other
than a Lender domiciled in Bermuda shall deliver to the Administrative Agent,
prior to receipt of any payment subject to withholding under the Code (or upon
accepting an assignment of an interest herein),
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two duly signed completed copies of either IRS Form W-8BEN or any successor
thereto (relating to such Foreign Lender and entitling it to an exemption from,
or reduction of, withholding tax on all payments to be made to such Foreign
Lender by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Foreign Lender by
the Borrower pursuant to this Agreement) or such other evidence satisfactory to
the Borrower and the Administrative Agent that such Foreign Lender is entitled
to an exemption from, or reduction of, U.S. withholding tax, including any
exemption pursuant to Section 881(c) of the Code. Thereafter and from time to
time, each such Foreign Lender shall (A) promptly submit to the Administrative
Agent such additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is satisfactory
to the Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or
payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases to act for
its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination
of the Administrative Agent (in the reasonable exercise of its discretion),
(A) two duly signed completed copies of the forms or statements required to
be provided by such Lender as set forth above, to establish the portion of
any such sums paid or payable with respect to which such Lender acts for
its own account that is not subject to U.S. withholding tax, and (B) two
duly signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its own account
with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.1 (A) with respect to any Taxes
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS
Form W-8IMY pursuant to this Section 11.13(a) or (B) if such Lender shall
have failed to satisfy the foregoing provisions of this Section 11.13(a);
provided that if such Lender shall have satisfied the requirement of this
Section 11.13(a) on the date such Lender became a Lender or ceased to act
for its own account with
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respect to any payment under any of the Loan Documents, nothing in this
Section 11.13(a) shall relieve the Borrower of its obligation to pay any
amounts pursuant to Section 3.1 in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact
that such Lender or other Person for the account of which such Lender
receives any sums payable under any of the Loan Documents is not subject to
withholding or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of
the Loan Documents with respect to which the Borrower is not required to
pay additional amounts under this Section 11.13(a).
(b) Upon the request of the Administrative Agent, each Lender that is
a "United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative
Agent did not properly withhold or backup withhold, as the case may be, any tax
or other amount from payments made to or for the account of any Lender, such
Lender shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the termination of the Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
SECTION 11.12 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
SECTION 11.13 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF
72
THIS AGREEMENT, EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE LC ISSUER
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE LC ISSUER AND THE LENDERS WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID OR BY ANY OTHER MEANS PERMITTED
BY NEW YORK OR FEDERAL LAW.
SECTION 11.14 Waiver of Jury Trial. EACH OF THE BORROWER, THE LENDERS, THE
LC ISSUER AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LC ISSUER, THE LENDERS AND
THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.15 Currency Indemnity. If, for the purposes of obtaining
judgment in any court in any jurisdiction with respect to any Loan Document, it
becomes necessary to convert into the currency of such jurisdiction (the
"Judgment Currency") any amount due under any Loan Document in any currency
other than the Judgment Currency (the "Currency Due"), then conversion shall be
made at the rate of exchange prevailing on the Business Day before the day on
which judgment is given. For this purpose, "rate of exchange" means the rate at
which the Administrative Agent is able, on the relevant date, to purchase the
Currency Due with the Judgment Currency in accordance with its normal practice
at its main branch in San Francisco, California. In the event that there is a
change in the rate of exchange prevailing between the
73
Business Day before the day on which the judgment is given and the date of
payment of the amount due, the Borrower will, on the day of payment, pay such
additional amount, if any, or be entitled to receive reimbursement of such
amount, if any, as may be necessary to ensure that the amount paid on such date
is the amount in the Judgment Currency which when converted at the rate of
exchange prevailing on the date of payment is the amount then due under any Loan
Document in the Currency Due. If the amount of the Currency Due which the
Administrative Agent is so able to purchase is less than the amount of the
Currency Due originally due to it, the Borrower shall indemnify and save the
Administrative Agent harmless from and against loss or damage arising as a
result of such deficiency. This indemnity shall constitute an obligation
separate and independent from the other obligations contained in any Loan
Document, shall give rise to a separate and independent cause of action, shall
apply irrespective of any indulgence granted by the Administrative Agent from
time to time and shall continue in full force and effect notwithstanding any
judgment or order for a liquidated sum in respect of an amount due under any
Loan Document or under any judgment or order.
SECTION 11.16 Entire Agreement. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Borrower, the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
74
RENAISSANCERE HOLDINGS LTD.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Title: Chief Financial Officer
----------------------------------
S-1
BANK OF AMERICA, N.A., as Administrative
Agent and Lender
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Title: Principal
----------------------------------
S-2
BANK OF BERMUDA, as Co-Agent and Lender
By: /s/ D. Coldwell
-------------------------------------
Title: Vice President, Corporate Banking
----------------------------------
S-3
THE BANK OF N.T. XXXXXXXXXXX & SON LIMITED
By: /s/ The Bank of N.T. Xxxxxxxxxxx & Sons Limited
-----------------------------------------------
Title: Vice President
--------------------------------------------
S-4
THE BANK OF NEW YORK
By: /s/ Xxxxx Xxxx
-------------------------------------
Title: Vice President
----------------------------------
S-5
BARCLAYS BANK PLC, as Co-Agent and Lender
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Title: Relationship Director
----------------------------------
X-0
XXXXXXXX, N.A. as Syndication Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: Relationship Director
--------------------------------------
S-7
DEUTSCHE BANK AG NEW YORK BRANCH,
as L/C Issuer, Co-Documentation Agent
and Lender
By: Xxxx Xxxxx
-------------------------------------
Title: Director
----------------------------------
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Title: Director
----------------------------------
S-8
FLEET NATIONAL BANK, as Co-Agent and
Lender
By: /s/ Fleet National Bank
-------------------------------------
Title: Manager
----------------------------------
X-0
XXXXXX XXXX, N.A., as Co-Agent and Lender
By: /s/ Mellon Bank
-------------------------------------
Title: Vice President
----------------------------------
S-10
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agent and Lender
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Title: Director
----------------------------------
S-11
SCHEDULE 1.2
Pricing Grid
==============================================================================================================
Pricing Pricing Pricing Pricing Pricing Pricing
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Xxxxx X Xxxxx XX
==============================================================================================================
S&P/Xxxxx'x Rating **** BB+/Ba1 BBB-/ Baa3 BBB/Baa2 BBB+/ Xxx0 X-/X0 X/X0 or above
--------------------------------------------------------------------------------------------------------------
Eurodollar Rate 2.000% 1.250% 0.950% 0.800% 0.650% 0.500%
--------------------------------------------------------------------------------------------------------------
Utilization Fee Rate 0.250% 0.250% 0.200% 0.100% 0.100% 0.100%
(*** 50% usage)
--------------------------------------------------------------------------------------------------------------
Non-Use Fee Rate 0.500% 0.350% 0.300% 0.250% 0.200% 0.150%
--------------------------------------------------------------------------------------------------------------
LC Fee Rate 2.000% 1.250% 0.950% 0.800% 0.650% 0.500%
==============================================================================================================
**** denotes less than or equals to.
*** denotes greater than or equals to.
In the event senior unsecured debt ratings are assigned to the Borrower by both
S&P and Xxxxx'x, pricing will be based on the higher of the senior unsecured
debt ratings from either S&P or Xxxxx'x in the event of a single split rating,
and one Pricing Level below the higher rating in the event of a double (or more)
split rating. If no senior unsecured debt rating has been assigned, Pricing
Level I shall apply.
SCHEDULE 2.1
COMMITMENTS
Lender Commitment Amount Pro Rata Share
------ ----------------- --------------
Bank of America, N.A. 57,500,000.00 14.375%
Bank of Bermuda 35,000,000.00 8.750%
The Bank of New York 25,000,000.00 6.250%
Barclays Bank PLC 35,000,000.00 8.750%
Citibank N.A. 52,500,000.00 13.125%
Deutsche Bank AG New
York Branch 52,500,000.00 13.125%
Fleet National Bank 40,000,000.00 10.000%
Mellon Bank, N.A. 35,000,000.00 8.750%
The Bank of N.T Xxxxxxxxxxx
& Son Limited 15,000,000.00 3.750%
Wachovia Bank, National
Association 52,500,000.00 13.125%
--------------- --------
$400,000,000.00 100.000%
SCHEDULE 11.2
ADDRESSES
ADDRESSES FOR NOTICES
BANK OF AMERICA, N.A.,
as Lender
Bank of America, N.A.
000 X. Xx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
BANK OF AMERICA, N.A.
Administrative Agent's Office:
(for payments and Requests for
Credit Extensions)
0000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxx.x.xxxxx@xxxxxxxxxxxxx.xxx
Bank of America, N.A., Dallas, Texas
ABA# 111,000,012
Account No: 3750836479
Account Name: Credit Services West
Ref: RenaissanceRe Holdings Ltd.
Other Notices as Administrative Agent:
Bank of America, N.A.
Agency Management
000 Xxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
BANK OF BERMUDA LIMITED
Bank of Bermuda
0 Xxxxx Xxxxxx
X.X. Xxx XX 0000
Hamilton, DX Bermuda
Attention: A. Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxxx@xxxxxxxxxxxxx.xxx
THE BANK OF NEW YORK
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxx@xxxxxxxx.xxx
BARCLAYS BANK PLC
Barclays Bank Plc
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attention: Xxxx Xxxxxxx
Telephone: x00 (0)000 000 0000
Facsimile: x00 (0)000 000 0000
Electronic Mail: xxxx.xxxxxxx@xxxxxxxxxxxxxxxxx.xxx
CITIBANK, N.A.
Citibank, N.A.
000 Xxxxxxxxx Xxxxxx
00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx.x.xxxxxx@xxxxxxxxx.xxx
DEUTSCHE BANK AG NEW YORK BRANCH
00 Xxxx 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx.xxxxxxx@xx.xxx
FLEET NATIONAL BANK
Fleet National Bank
Mail Code CT MO 0250
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxx_x_xxxxxx@xxxxx.xxx
MELLON BANK, X.X.
Xxxxxx Bank, N.A.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxx.xx@xxxxxx.xxx
THE BANK OF N.T. XXXXXXXXXXX & SON LIMITED
The Bank of N.T. Xxxxxxxxxxx & Son Limited
00 Xxxxx Xxxxxx
Xxxxxxxx XX XX, Xxxxxxx
Xxxxxxxxx: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxxxx.xxxxxx@xxxx.xx
WACHOVIA BANK, NATIONAL ASSOCIATION, as Lender
Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xxxxxx
XX0000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxx.xxxxx@xxxxxxxx.xxx
RENAISSANCERE HOLDINGS LTD.
Notices:
RenaissanceRe Holdings Ltd.
Xxxxxxxxxxx Xxxxx
0-00 Xxxx Xxxxxxxx
Xxxxxxxx XX 00, Xxxxxxx
Xxxxxxxxx: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
