Exhibit 10.8
CREDIT AGREEMENT
among
ENDURANCE SPECIALTY HOLDINGS LTD.,
VARIOUS DESIGNATED SUBSIDIARY BORROWERS,
VARIOUS LENDING INSTITUTIONS,
and
JPMORGAN CHASE BANK,
as ADMINISTRATIVE AGENT
Dated as of August 13, 2002
$108,000,000
X.X. XXXXXX SECURITIES INC.,
as SOLE ADVISOR, SOLE LEAD ARRANGER AND SOLE BOOK MANAGER,
THE BANK OF NEW YORK,
as CO-ARRANGER AND SYNDICATION AGENT,
and
BARCLAYS BANK PLC,
as DOCUMENTATION AGENT
CREDIT AGREEMENT, dated as of August 13, 2002, among ENDURANCE
SPECIALTY HOLDINGS LTD., a company organized under the laws of Bermuda (the
"Parent Borrower"), the Designated Subsidiary Borrowers (as hereinafter defined)
from time to time party hereto, the lending institutions listed from time to
time on Annex I hereto (each a "Lender" and, collectively, the "Lenders"), and
JPMORGAN CHASE BANK, as Administrative Agent (the "Administrative Agent").
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 10 are used herein as so defined.
WITNESSETH:
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Lenders are willing to make available to the Borrowers the
credit facility provided for herein.
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Tranche 1 Commitments. (a) Subject to and upon the terms
and conditions set forth herein (including, on and after the initial Additional
Tranche 1 Commitment Date, Section 1.15), each Tranche 1 Lender severally
agrees, at any time and from time to time after the Effective Date and prior to
the Commitment Expiration Date, to make a loan or loans (each, a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Parent Borrower, which
Revolving Loans (i) shall be denominated in Dollars, (ii) shall, at the option
of the Parent Borrower, be incurred and maintained as and/or converted into Base
Rate Loans or Eurodollar Loans, provided that, except as otherwise specifically
provided in Section 1.10(b), all Loans comprising the same Borrowing shall at
all times be of the same Type, (iii) may be repaid and reborrowed at any time in
accordance with the provisions hereof, (iv) shall not exceed for any Tranche 1
Lender at any time outstanding that aggregate principal amount which, when added
to such Tranche 1 Lender's Tranche 1 Percentage of the aggregate amount of all
Tranche 1 Letter of Credit Outstandings (exclusive of Tranche 1 Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time, the Tranche 1
Commitment of such Tranche 1 Lender at such time, and (v) shall not exceed at
any time outstanding that aggregate principal amount which, when added to all
Tranche 1 Letter of Credit Outstandings at such time, equals the Total Tranche 1
Commitment at such time.
(b) Subject to and upon the terms and conditions set forth
herein, the Parent Borrower and each Tranche 1 Lender which has Revolving Loans
outstanding at such time agree that at 9:00 A.M. (New York time) on the
Commitment Expiration Date, the aggregate principal amount of Revolving Loans
owing to such Tranche 1 Lender and outstanding at such time shall (unless such
Revolving Loans have been declared (or have become) due and payable pursuant to
this Agreement), upon written notice (or telephonic notice promptly confirmed in
writing) by the Parent Borrower to the Administrative Agent requesting such
conversion, automatically convert to and thereafter constitute Term Loans owing
to such Tranche 1 Lender hereunder. The Term Loans of each Tranche 1 Lender (i)
shall be made and thereafter maintained in Dollars; (ii) shall, at the option of
the Parent Borrower, be Base Rate Loans or Eurodollar Loans, provided that all
Term Loans comprising the same Borrowing shall, unless otherwise specifically
provided herein,
consist of Term Loans of the same Type; and (iii) shall not exceed in initial
principal amount for such Tranche 1 Lender an amount which equals the total
principal amount of Revolving Loans owed to such Tranche 1 Lender and
outstanding at 9:00 A.M. (New York time) on the Commitment Expiration Date. Once
repaid, Term Loans may not be reborrowed.
1.02 Minimum Amount of Each Borrowing; Maximum Number of
Borrowings. The aggregate principal amount of each Borrowing hereunder shall not
be less than $5,000,000. More than one Borrowing may be incurred on any day;
provided that at no time shall there be outstanding more than ten Borrowings of
Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Parent Borrower
desires to incur Revolving Loans, it shall give the Administrative Agent at its
Notice Office, (x) prior to 11:00 A.M. (New York time), at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Eurodollar Loans or (y) prior to 10:00 A.M. (New York time)
on the day of each Borrowing of Base Rate Loans, prior written notice (or
telephonic notice promptly confirmed in writing). Each such notice (a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable, and, in the case of a written notice and a confirmation of
telephonic notice, shall be in the form of Exhibit A hereto, appropriately
completed to specify (i) the aggregate principal amount of the Revolving Loans
to be made pursuant to such Borrowing, (ii) the date of such Borrowing (which
shall be a Business Day) and (iii) whether the respective Borrowings shall
consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall promptly give each Tranche 1 Lender written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing, of such Tranche 1
Lender's proportionate share thereof and of the other matters covered by the
Notice of Borrowing.
(b) Without in any way limiting the obligation of the Parent
Borrower to confirm in writing any notice it may give hereunder by telephone,
the Administrative Agent may act prior to receipt of written confirmation
without liability upon the basis of such telephonic notice, believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Parent Borrower. In each such case the Administrative Agent's record of the
terms of any such telephonic notice shall be conclusive absent manifest error.
1.04 Disbursement of Funds. (a) Subject to the terms and
conditions herein set forth, no later than 11:00 A.M. (New York time) on the
date of each incurrence of Revolving Loans, each Tranche 1 Lender will make
available to the Administrative Agent its pro rata share of each Borrowing
requested to be made on such date in the manner provided below.
(b) Each Tranche 1 Lender shall make available all amounts it
is to fund under any Borrowing in Dollars and immediately available funds to the
Administrative Agent at the Payment Office and the Administrative Agent will
make available to the Parent Borrower as promptly as practicable by depositing
to its account at the Payment Office the aggregate of the amounts so made
available in the type of funds received. Unless the Administrative Agent shall
have been notified by any Tranche 1 Lender prior to the date of any such
Borrowing that such Tranche 1 Lender does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume
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that such Tranche 1 Lender has made such amount available to the Administrative
Agent on the date of such Borrowing, and the Administrative Agent, in reliance
upon such assumption, may (in its sole discretion and without any obligation to
do so) make available to the Parent Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Tranche 1 Lender and the Administrative Agent has made available same to
the Parent Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Tranche 1 Lender. If such Tranche 1 Lender does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Parent
Borrower, and the Parent Borrower shall pay such corresponding amount to the
Administrative Agent within two Business Days. The Administrative Agent shall
also be entitled to recover from the Tranche 1 Lender or the Parent Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Parent Borrower to the date such corresponding amount is recovered
by the Administrative Agent, at a rate per annum equal to (x) if paid by such
Tranche 1 Lender, the overnight Federal Funds Effective Rate or (y) if paid by
the Parent Borrower, the then applicable rate of interest, calculated in
accordance with Section 1.08(a) or (b), as the case may be, for the respective
Revolving Loans.
(c) Nothing in this Section 1.04 shall be deemed to relieve
any Tranche 1 Lender from its obligation to fulfill its commitments hereunder or
to prejudice any rights which the Parent Borrower may have against any Tranche 1
Lender as a result of any default by such Tranche 1 Lender hereunder.
1.05 Notes. (a) The Parent Borrower's obligation to pay the
principal of, and interest on, all of the Loans made to it by each Tranche 1
Lender shall be evidenced in the Register maintained by the Administrative Agent
pursuant to Section 12.16 and shall, if requested by such Tranche 1 Lender, also
be evidenced by a promissory note substantially in the form of Exhibit B with
blanks appropriately completed in conformity herewith (each a "Note" and
collectively, the "Notes").
(b) The Note issued to each Tranche 1 Lender shall (i) be
executed by the Parent Borrower, (ii) be payable to the order of such Tranche 1
Lender and be dated the Effective Date (or if issued after the Effective Date,
be dated the date of the issuance thereof), (iii) be in a stated principal
amount equal to the Tranche 1 Commitment of such Tranche 1 Lender and be payable
in a principal amount equal to the amount of the Loans made by such Lender and
which are outstanding from time to time, (iv) mature on (x) in the case of
Revolving Loans which are not elected to be converted by the Parent Borrower
pursuant to Section 1.01(b), on the Commitment Expiration Date and (y) in the
case of Term Loans, on the Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 4.01 and mandatory
repayment as provided in Section 4.02 and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents. Upon receipt of an affidavit of
an officer of the Tranche 1 Lender (together with a customary indemnity from
such Tranche 1 Lender in form and substance satisfactory to the Parent Borrower)
that a Note has been lost, stolen, destroyed or mutilated, the Parent Borrower
will issue a replacement Note in the same principal amount thereof and otherwise
of like tender.
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(c) Each Tranche 1 Lender will record on its internal records
the amount of each Loan made by it and each payment in respect thereof and will
prior to any transfer of its Note endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation or any error in any such notation shall not affect the Parent
Borrower's obligations in respect of such Loans.
(d) Notwithstanding anything to the contrary contained above
in this Section 1.05 or elsewhere in this Agreement, Notes shall only be
delivered to Tranche 1 Lenders which at any time specifically request the
delivery of such Notes. No failure of any Tranche 1 Lender to request or obtain
a Note evidencing its Loans to the Parent Borrower shall affect or in any manner
impair the obligations of the Parent Borrower to pay the Loans (and all related
Obligations) incurred by the Parent Borrower which would otherwise be evidenced
thereby in accordance with the requirements of this Agreement, and shall not in
any way affect the guarantee therefor provided pursuant to Section 13. Any
Tranche 1 Lender which does not have a Note evidencing its outstanding Loans
shall in no event be required to make the notations otherwise described in
preceding clause (c). At any time when any Tranche 1 Lender requests the
delivery of a Note to evidence any of its Loans, the Parent Borrower shall
promptly execute and deliver to the respective Tranche 1 Lender the requested
Note in the appropriate amount or amounts to evidence such Loans.
1.06 Conversions. The Parent Borrower shall have the option to
convert on any Business Day all or a portion at least equal to $1,000,000 of the
outstanding principal amount of its Revolving Loans or Term Loans of one Type,
into a Borrowing or Borrowings of the other Type of Revolving Loans or Term
Loans, as the case may be; provided that (i) no partial conversion of a
Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of
the Eurodollar Loans pursuant to such Borrowing to less than $1,000,000, (ii)
Base Rate Loans may not be converted into Eurodollar Loans if any Default or
Event of Default is in existence on the date of the conversion if the
Administrative Agent or the Required Lenders have previously advised the Parent
Borrower that conversions will not be permitted while such Default or Event of
Default, as the case may be, remains in existence, (iii) Borrowings of
Eurodollar Loans resulting from this Section 1.06 shall be limited in number as
provided in Section 1.02, (iv) Eurodollar Loans may only be converted into Base
Rate Loans on the last day of the Interest Period applicable thereto, and (v)
each such conversion shall be made pro rata among the Revolving Loans or Term
Loans, as the case may be, of each Tranche 1 Lender of the Type being converted.
Each such conversion shall be effected by the Parent Borrower by giving the
Administrative Agent at its Notice Office, prior to 11:00 A.M. (New York time),
at least three Business Days' (or one Business Day's in the case of a conversion
into Base Rate Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a "Notice of Conversion") specifying the Revolving
Loans or Term Loans to be so converted, the Type of Loans to be converted into
and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Tranche 1 Lender prompt notice of any such proposed conversion affecting
any of its Loans.
1.07 Pro Rata Borrowings. (a) All Borrowings of Revolving
Loans under this Agreement shall be incurred by the Parent Borrower from the
Tranche 1 Lenders pro rata on the basis of such Tranche 1 Lenders' Commitments.
It is understood that no Tranche 1 Lender shall be responsible for any default
by any other Tranche 1 Lender in its obligation to make Revolving
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Loans hereunder and that each Tranche 1 Lender shall be obligated to make the
Revolving Loans provided to be made by it hereunder, regardless of the failure
of any other Tranche 1 Lender to fulfill its commitments hereunder.
(b) All Borrowings of Term Loans under this Agreement shall be
incurred by the Parent Borrower from the Tranche 1 Lenders pro rata on the basis
of such Tranche 1 Lenders' Commitments as in effect immediately prior to the
Commitment Expiration Date.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be the
Applicable Margin then in effect for Base Rate Loans plus the Base Rate in
effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such Eurodollar Loan or
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Sections 1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall
at all times be the Applicable Margin then in effect for Eurodollar Loans plus
the relevant Eurodollar Rate for the Interest Period applicable to such
Eurodollar Loan.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall be payable on demand and shall bear interest at a rate per annum
equal to the Applicable Margin then in effect for Base Rate Loans plus the Base
Rate in effect from time to time plus 2%, provided that overdue principal in
respect of Eurodollar Loans shall bear interest until the end of the Interest
Period applicable to such Eurodollar Loans at a rate per annum equal to 2% in
excess of the rate otherwise applicable to such Eurodollar Loans.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each calendar quarter, (ii) in respect of each Eurodollar Loan,
on the last day of each Interest Period applicable thereto and, in the case of
an Interest Period of six months, on the date occurring three months after the
first day of such Interest Period and (iii) in respect of each Loan, on any
conversion or prepayment (on the amount so converted or prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest
rate for any Borrowing of Eurodollar Loans for any Interest Period, shall
promptly notify the Parent Borrower and the Tranche 1 Lenders thereof.
1.09 Interest Periods. At the time the Parent Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing
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of Eurodollar Loans (in the case of the initial Interest Period applicable
thereto) or prior to 11:00 A.M. (New York time) on the third Business Day prior
to the expiration of an Interest Period applicable to a Borrowing of Eurodollar
Loans, it shall have the right to elect by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period to be applicable to such Borrowing, which Interest Period shall,
at the option of the Parent Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) no Interest Period may be elected if it would extend
beyond (x) in the case of Revolving Loans, the Commitment Expiration
Date and (y) in the case of Term Loans, the Term Loan Maturity Date;
and
(v) no Interest Period may be selected at any time when a
Default or Event of Default is then in existence if the Administrative
Agent or the Required Banks have previously advised the Parent Borrower
that the selection of Interest Periods will not be permitted while such
Default or Event of Default, as the case may be, remains in existence.
If upon the expiration of any Interest Period, the Parent Borrower has failed,
or is not permitted, to elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Parent Borrower
shall be deemed to have elected to convert such Borrowing into a Borrowing of
Base Rate Loans effective as of the expiration date of such current Interest
Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) below, the Administrative Agent, or (y) in the
case of clauses (ii) and (iii) below, any Tranche 1 Lender, shall have
determined in good faith (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the
Effective Date affecting the interbank
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Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Tranche 1 Lender shall incur
increased costs or reductions in the amounts received or receivable
hereunder with respect to any Eurodollar Loans (other than any
increased cost or reduction in the amount received or receivable
resulting from a change in the rate of taxes or similar charges)
because of (x) any change since the Effective Date in any applicable
law, governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (such as,
for example, but not limited to, (A) a change in the basis of taxation
of payment to any Tranche 1 Lender of the principal of, or interest on,
the Loans or any other amounts payable hereunder (except for changes in
the rate of tax on, or determined by reference to, the net income or
net profits of such Tranche 1 Lender pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office
or applicable lending office is located or any subdivision thereof or
therein), but without duplication of any amounts owed to such Tranche 1
Lender under Section 4.04(a), or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the
Eurodollar Rate) and/or (y) other circumstances affecting the interbank
Eurodollar market or the position of such Tranche 1 Lender in such
market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Tranche 1
Lender in good faith with any change since the Effective Date in any
law, governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Tranche 1
Lender customarily complies, or has become impracticable as a result of
a contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
then, and in any such event, such Tranche 1 Lender (or the Administrative Agent
in the case of clause (i) above) shall (x) on such date and (y) within 10
Business Days of the date on which such event no longer exists give notice (by
telephone confirmed in writing) to the Parent Borrower and to the Administrative
Agent of such determination and the reason therefor (which notice the
Administrative Agent shall promptly transmit to each of the other Tranche 1
Lenders). Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall
no longer be available until such time as the Administrative Agent notifies the
Parent Borrower and the Tranche 1 Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by the Parent Borrower with respect to
Eurodollar Loans which have not yet been incurred shall be deemed rescinded by
the Parent Borrower or, in the case of a Notice of Borrowing, shall, at the
option of the Parent Borrower, be deemed converted into a Notice of Borrowing
for Base Rate Loans to be made on the date of Borrowing contained in such Notice
of Borrowing, (y) in the case of clause (ii) above, the Parent Borrower shall
pay to such Tranche 1 Lender, within 10 Business Days following receipt of
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Tranche 1 Lender shall determine in good faith) as shall be required to
compensate such Tranche 1 Lender for such increased costs
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or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Tranche 1 Lender, showing the basis for the
calculation thereof, which basis shall be reasonable and consistently applied,
submitted to the Parent Borrower by such Tranche 1 Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Parent Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Parent Borrower may
(and, in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii), the Parent Borrower shall) either (i) if the affected Eurodollar
Loan is then being made pursuant to a Borrowing, by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Parent Borrower was notified by a Tranche 1 Lender (or on the next
Business Day if the Parent Borrower received such notice after 3:00 p.m. (New
York time)) pursuant to Section 1.10(a)(ii) or (iii), cancel said Borrowing,
convert the related Notice of Borrowing into one requesting a Borrowing of Base
Rate Loans or require the affected Tranche 1 Lender to make its requested Loan
as a Base Rate Loan, or (ii) if the affected Eurodollar Loan is then
outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Tranche 1 Lender to convert each such affected
Eurodollar Loan into a Base Rate Loan, provided that if more than one Tranche 1
Lender is affected at any time, then all affected Tranche 1 Lenders must be
treated the same pursuant to this Section 1.10(b).
(c) If any Tranche 1 Lender shall have determined in good
faith that after the Effective Date the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged by law with
the interpretation or administration thereof, or compliance by such Tranche 1
Lender or its parent corporation with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, in each case made subsequent to the Effective Date,
has or would have the effect of reducing the rate of return on such Tranche 1
Lender's or its parent corporation's capital or assets as a consequence of such
Tranche 1 Lender's commitments or obligations hereunder to a level below that
which such Tranche 1 Lender or its parent corporation could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Tranche 1 Lender's or its parent corporation's policies with
respect to capital adequacy), then from time to time, upon demand by such
Tranche 1 Lender (with a copy to the Administrative Agent), the Parent Borrower
agrees to pay such Tranche 1 Lender such additional amount or amounts as will
compensate such Tranche 1 Lender or its parent corporation for such reduction.
Each Tranche 1 Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Parent Borrower, which notice shall set forth the
basis of the calculation of such additional amounts, which basis must be
reasonable and consistently applied, although the failure to give any such
notice shall not release or diminish the Parent Borrower's obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt
of such notice.
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1.11 Compensation. The Parent Borrower agrees to compensate
each Tranche 1 Lender, upon its written request (which request shall set forth
the basis for requesting such compensation), for all reasonable losses, expenses
and liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Tranche 1 Lender to fund its Eurodollar Loans but excluding any
loss of anticipated profit with respect to such Loans) which such Tranche 1
Lender may sustain: (i) if for any reason (other than a default by such Tranche
1 Lender or the Administrative Agent) a Borrowing of Eurodollar Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Parent Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment, prepayment, assignment or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period applicable thereto; (iii) if any prepayment of any of
its Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Parent Borrower; or (iv) as a consequence of (x) any other failure
by the Parent Borrower to repay its Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii) or Section 4.04 with respect to such Lender, it will, if requested by
the Parent Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letters of Credit affected by such event; provided that such designation is
made on such terms that, in the opinion of such Lender, such Lender and its
lending office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such Section. Nothing in this Section 1.12 shall affect or postpone any of
the obligations of the Parent Borrower or the right of any Lender provided in
Section 1.10 or Section 4.04.
1.13 Replacement of Lenders. (a) Upon the occurrence of any
event giving rise to the operation of Section 1.10(a)(ii) or (iii) or Section
4.04 with respect to any Lender which results in such Lender charging to one or
more Borrowers increased costs in excess of those being generally charged by the
other Lenders, (b) if a Lender becomes a Defaulting Lender and/or (c) in the
case of a refusal by a Lender to consent to a proposed change, waiver, discharge
or termination with respect to this Agreement which has been approved by the
Required Lenders, the Parent Borrower shall have the right, if no Default or
Event of Default then exists, to replace such Lender (the "Replaced Lender"),
upon prior written notice to the Administrative Agent and such Replaced Lender,
with one or more NAIC approved banks or other financial institutions (unless
otherwise agreed by the Parent Borrower and the Administrative Agent) (none of
whom shall constitute a Defaulting Lender at the time of such replacement)
reasonably acceptable to the Administrative Agent (collectively, the
"Replacement Lender"), provided that (i) at the time of any replacement pursuant
to this Section 1.13, the Replacement Lender and the Replaced Lender shall enter
into one or more Assignment Agreements pursuant to Section 12.04(b) (and with
all fees payable pursuant to said Section 12.04(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of the Replaced Lender and, in connection
therewith, shall pay to the Replaced Lender in respect thereof an amount equal
to the sum of (A) an amount equal to the principal amount of, and all accrued
but unpaid interest on, all outstanding Loans of the Replaced Lender, (B) an
amount equal to all Unpaid Drawings that have been funded by (and not reimbursed
to) such Replaced
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Lender, together with all then unpaid interest with respect thereto at such time
and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to
the Replaced Lender pursuant to Section 3.01; (ii) all obligations of the
Borrowers under the Credit Documents owing to the Replaced Lender (other than
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid), including,
without limitation, all amounts owing to the Replaced Lender under Section 1.11
as a result of the assignment of its Loans under clause (i) above, shall be paid
in full to such Replaced Lender concurrently with such replacement; and (iii) no
assignment pursuant to this Section 1.13 shall be effective until all of the
then outstanding Letters of Credit are returned by each respective beneficiary
to the Issuing Agent and either cancelled and/or exchanged for new or amended
Letters of Credit which give effect to such assignment (it being understood that
to the extent the respective beneficiaries do not consent to such assignment,
such assignment cannot occur). Upon the execution of the respective Assignment
Agreements, the payment of amounts referred to in clauses (i) and (ii) above and
the return and cancellation and/or exchange of each then outstanding Letter of
Credit as provided above, if so requested by the Replacement Lender, delivery to
the Replacement Lender of the appropriate Note or Notes executed by the Parent
Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions applicable to the Replaced Lender under
this Agreement, which shall survive as to such Replaced Lender.
1.14 Designated Subsidiary Borrowers. The Parent Borrower may
from time to time after the Effective Date designate one or more Persons as an
additional Designated Subsidiary Borrower, subject to the following terms and
conditions:
(a) each such Person shall be a Wholly-Owned Subsidiary of the
Parent Borrower;
(b) each such Person shall be a Material Subsidiary;
(c) on or prior to the date of designation, each such Person
shall enter into an appropriately completed DSB Assumption Agreement;
(d) on or prior to the date of designation, the Administrative
Agent shall have received from such Person a certificate, signed by an
Authorized Officer of such Person in the form of Exhibit E hereto with
appropriate insertions or deletions, together with (x) copies of its
certificate of incorporation, by-laws or other equivalent
organizational documents and (y) resolutions relating to the Credit
Documents which shall be satisfactory to the Administrative Agent;
(e) on or prior to the date of designation, the Administrative
Agent shall have received an opinion, addressed to the Administrative
Agent and each of the Lenders and dated the date of designation, from
counsel to such Person, which opinion shall (x) in the case of a
Designated Subsidiary Borrower located in the United States, be
substantially in the form of Exhibit I-l hereto and otherwise
satisfactory to the Administrative Agent, (y) in the case of a
Designated Subsidiary Borrower located in Bermuda, be substantially in
the form of Exhibit I-2 hereto and otherwise satisfactory to the
Administrative Agent and
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(z) in the case of a Designated Subsidiary Borrower located in a
jurisdiction other than the United States or Bermuda, be in form and
substance satisfactory to the Administrative Agent; and
(f) on or prior to the date of designation, the Administrative
Agent shall have received such other documentation and/or certificates
(including, without limitation, certificates of existence and/or good
standing certificates) as the Administrative Agent may reasonably
request.
1.15 Additional Tranche 1 Commitments. (a) The Parent Borrower
shall have the right at any time and from time to time after the Effective Date
and prior to the Commitment Expiration Date to request (so long as no Default of
Event of Default is then in existence or would result therefrom) on one or more
occasions that one or more Tranche 1 Lenders (and/or one or more other Persons
which will become Tranche 1 Lenders as provided pursuant to clause (vi) below)
provide Additional Tranche 1 Commitments and, subject to the applicable terms
and conditions contained in this Agreement and the relevant Additional Tranche 1
Commitment Agreement, make Revolving Loans and issue Letters of Credit; it being
understood and agreed, however, that (i) no Lender shall be obligated to provide
an Additional Tranche 1 Commitment as a result of any request by the Parent
Borrower, (ii) until such time, if any, as (x) such Lender has agreed in its
sole discretion to provide an Additional Tranche 1 Commitment and executed and
delivered to the Administrative Agent an Additional Tranche 1 Commitment
Agreement in respect thereof as provided in Section 1.15(b) and (y) such other
conditions set forth in Section 1.15(b) shall have been satisfied, such Tranche
1 Lender shall not be obligated to fund any Revolving Loans, or issue any
Letters of Credit, in excess of the amounts provided for in Section 1.01(a) or
2A.01, as the case may be, before giving effect to such Additional Tranche 1
Commitments provided pursuant to this Section 1.15, (iii) any Tranche 1 Lender
(and/or one or more other Persons which will become Tranche 1 Lenders as
provided pursuant to clause (vi) below) may so provide an Additional Tranche 1
Commitment without the consent of any other Tranche 1 Lender (it being
understood and agreed that the consent of the Administrative Agent and the
Issuing Agent (such consent (in either case) not to be unreasonably withheld or
delayed) shall be required if any such Additional Tranche 1 Commitments are to
be provided by a Person which is not already a Tranche 1 Lender), (iv) (x) each
provision of Additional Tranche 1 Commitments on a given date pursuant to this
Section 1.15 shall be in a minimum aggregate amount (for all Tranche 1 Lenders
(including, in the circumstances contemplated by clause (vi) below, banks or
other financial institutions who will become Tranche 1 Lenders)) of at least
$1,000,000 and (y) the aggregate amount of Additional Tranche 1 Commitments
provided pursuant to this Section 1.15 shall not exceed $42,000,000, (v) the
up-front fees payable to any Tranche 1 Lender providing an Additional Tranche 1
Commitment shall be as set forth in the relevant Additional Tranche 1 Commitment
Agreement, (vi) if, on or after the tenth Business Day following the request by
the Parent Borrower of the then existing Tranche 1 Lenders (other than
Defaulting Lenders) to provide Additional Tranche 1 Commitments pursuant to this
Section 1.15 on the terms to be applicable thereto, the Parent Borrower has not
received Additional Tranche 1 Commitments in an aggregate amount equal to that
amount of the Additional Tranche 1 Commitments which the Parent Borrower desires
to obtain pursuant to such request (as set forth in the notice provided by the
Parent Borrower to the Administrative Agent as provided above), then the Parent
Borrower may request Additional Tranche 1 Commitments from other NAIC approved
banks or financial institutions (unless otherwise agreed by the Parent Borrower
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and the Administrative Agent) in aggregate amount equal to such deficiency on
terms which are no more favorable to such other bank or financial institution in
any respect than the terms offered to the Tranche 1 Lenders, and (vii) all
actions taken by the Parent Borrower pursuant to this Section 1.15 shall be done
in coordination with the Administrative Agent.
(b) At the time of any provision of Additional Tranche 1
Commitments pursuant to this Section 1.15, (i) the Parent Borrower, each
Designated Subsidiary Borrower, the Administrative Agent and each such Tranche 1
Lender or other bank or financial institution which agrees to provide an
Additional Tranche 1 Commitment (each, an "Additional Tranche 1 Lender") shall
execute and deliver to the Administrative Agent an Additional Tranche 1
Commitment Agreement substantially in the form of Exhibit J, subject to such
modifications in form and substance reasonably satisfactory to the
Administrative Agent as may be necessary or appropriate (with the effectiveness
of such Additional Tranche 1 Lender's Additional Tranche 1 Commitment to occur
upon delivery of such Additional Tranche 1 Commitment Agreement to the
Administrative Agent, the payment of any fees required in connection therewith
and the satisfaction of the other conditions in this Section 1.15 to the
reasonable satisfaction of the Administrative Agent), (ii) the Parent Borrower
shall, in coordination with the Administrative Agent, repay all outstanding
Revolving Loans of the Lenders, and incur additional Revolving Loans from other
Tranche 1 Lenders in each case so that the Tranche 1 Lenders participate in each
Borrowing pro rata on the basis of their respective Tranche 1 Commitments (after
giving effect to any increase in the Total Tranche 1 Commitment pursuant to this
Section 1.15) and with the Parent Borrower being obligated to pay the respective
Tranche 1 Lenders the costs of the type referred to in Section 1.11 in
connection with any such repayment and/or Borrowing, (iii) all the outstanding
Tranche 1 Letters of Credit shall have been returned by each respective
beneficiary to the Issuing Agent and shall either have been cancelled and/or
exchanged for new or amended Tranche 1 Letters of Credit which give effect to
such Additional Tranche 1 Commitment, (iv) if such Additional Tranche 1 Lender
is not a United States person (as such term is defined in Section 7701(a)(3) of
the Code) for U.S. Federal income tax purposes and such Additional Tranche 1
Lender is issuing Letters of Credit for the account of a U.S. Borrower or U.S.
Borrowers, such Additional Tranche 1 Lender shall provide to such U.S. Borrower
or U.S. Borrowers the appropriate Internal Revenue Service forms (and, if
applicable a Section 4.04(b)(ii) Certificate) described in Section 4.04(b), (v)
the Parent Borrower and each Designated Subsidiary Borrower shall deliver to the
Administrative Agent resolutions authorizing the incurrence of the Obligations
to be incurred pursuant to each Additional Tranche 1 Commitment, together with
evidence of good standing of the Parent Borrower and each Designated Subsidiary
Borrower (if requested) and (vi) the Parent Borrower shall deliver to the
Administrative Agent an opinion, in form and substance reasonably satisfactory
to the Administrative Agent, from counsel to the Parent Borrower reasonably
satisfactory to the Administrative Agent and dated such date, covering such
matters similar to those set forth in the opinions of counsel delivered to the
Lenders on the Effective Date pursuant to Section 5.01(b) and such other matters
as the Administrative Agent may reasonably request. The Administrative Agent
shall promptly notify each Tranche 1 Lender as to the occurrence of each
Additional Tranche 1 Commitment Date, and (w) on each such date, the Total
Tranche 1 Commitment under, and for all purposes of, this Agreement shall be
increased by the aggregate amount of such Additional Tranche 1 Commitments, (x)
on each such date Annex I shall be deemed modified to reflect the revised
Tranche 1 Commitments of the affected Tranche 1 Lenders and (y) upon surrender
of any old Notes by the respective Additional Tranche 1 Lender (or, if lost, a
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standard lost note indemnity in form and substance reasonably satisfactory to
the Parent Borrower), to the extent requested by any Additional Tranche 1
Lender, a new Note will be issued, at the Parent Borrower's expense, to such
Additional Tranche 1 Lender, to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Tranche 1 Commitment of such Tranche 1 Lender.
SECTION 2.A. Tranche 1 Letters of Credit.
2A.01 Tranche 1 Letters of Credit. (a) Subject to and upon the
terms and conditions set forth herein, each Designated Subsidiary Borrower may
request the Issuing Agent, at any time and from time to time after the Effective
Date and prior to the date which is 30 days prior to the Commitment Expiration
Date, to issue on behalf of the Tranche 1 Lenders, for the account of such
Designated Subsidiary Borrower and in support of, on a standby basis, Letter of
Credit Supportable Obligations and, subject to and upon the terms and conditions
set forth herein, the Issuing Agent agrees to issue on behalf of the Tranche 1
Lenders at any time and from time to time after the Effective Date and prior to
the date which is 30 days prior to the Commitment Expiration Date, one or more
irrevocable standby letters of credit in such form as may be approved by the
Issuing Agent (each such letter of credit, a "Tranche 1 Letter of Credit" and,
collectively, the "Tranche 1 Letters of Credit"). Notwithstanding the foregoing,
the Issuing Agent shall be under no obligation to issue any Tranche 1 Letter of
Credit if at the time of such issuance:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Agent from issuing such Tranche 1 Letter of Credit
or any requirement of law applicable to such Issuing Agent or any
Lender or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the Issuing
Agent or any Tranche 1 Lender shall prohibit, or request that the
Issuing Agent or any Tranche 1 Lender refrain from, the issuance of
letters of credit generally or such Tranche 1 Letter of Credit in
particular or shall impose upon the Issuing Agent or any Lender with
respect to such Tranche 1 Letter of Credit any restriction or reserve
or capital requirement (for which the Issuing Agent or any Tranche 1
Lender is not otherwise compensated) not in effect on the Effective
Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Agent or any Tranche 1
Lender as of the Effective Date;
(ii) the conditions precedent set forth in Section 5.02 are
not satisfied at that time; or
(iii) the Issuing Agent shall have received notice from any
Borrower or the Required Lenders prior to the issuance of such Tranche
1 Letter of Credit of the type described in clause (iv) of Section
2A.01(b).
(b) Notwithstanding the foregoing, (i) no Tranche 1 Letter of
Credit shall be issued the Stated Amount of which, when added to (x) Tranche 1
the Letter of Credit Outstandings (exclusive of Tranche 1 Unpaid Drawings which
are repaid on the date of, and prior to the issuance of, the respective Tranche
1 Letter of Credit) at such time and (y) the aggregate principal amount of all
Revolving Loans then outstanding, would exceed an amount equal to
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the Total Tranche 1 Commitment at such time; (ii) each Tranche 1 Letter of
Credit shall have an expiry date occurring not later than one year after such
Tranche 1 Letter of Credit's date of issuance; provided that each such Tranche 1
Letter of Credit may by its terms automatically renew annually for one
additional year unless the Issuing Agent notifies the beneficiary thereof, in
accordance with the terms of such Tranche 1 Letter of Credit, that such Tranche
1 Letter of Credit will not be renewed; (iii) each Tranche 1 Letter of Credit
shall be denominated in Dollars; and (iv) the Issuing Agent will not issue any
Tranche 1 Letter of Credit after it has received written notice from any
Borrower or the Required Lenders stating that a Default or an Event of Default
exists until such time as the Issuing Agent shall have received a written notice
of (x) rescission of such notice from the party or parties originally delivering
the same or (y) a waiver of such Default or Event of Default by the Required
Lenders (or, to the extent provided by Section 12.11, each of the Lenders).
(c) Each Tranche 1 Letter of Credit will be issued by the
Issuing Agent on behalf of the Tranche 1 Lenders and each Tranche 1 Lender will
participate in each Tranche 1 Letter of Credit pro rata in accordance with its
Tranche 1 Percentage. The obligations of each Tranche 1 Lender under and in
respect of each Tranche 1 Letter of Credit are several, and the failure by any
Tranche 1 Lender to perform its obligations hereunder or under any Tranche 1
Letter of Credit shall not affect the obligations of the respective Borrower
toward any other party hereto nor shall any other such party be liable for the
failure by such Tranche 1 Lender to perform its obligations hereunder or under
any Tranche 1 Letter of Credit.
(d) Subject to and on the terms and conditions set forth
herein, the Issuing Agent is hereby authorized by each Designated Subsidiary
Borrower and the Tranche 1 Lenders to arrange for the issuance of any Tranche 1
Letter of Credit pursuant to Section 2A.01(a) and the amendment of any Letter of
Credit pursuant to Section 1.13, Section 1.15, Section 2A.06 and/or Section
12.04(b) by:
(i) completing the commencement date and the expiry date of
such Tranche 1 Letter of Credit;
(ii) in the case of an amendment increasing or reducing the
amount thereof, amending such Tranche 1 Letter of Credit in such manner
as the Issuing Agent and the respective beneficiary may agree;
(iii) completing such Tranche 1 Letter of Credit with the
participation of each Tranche 1 Lender as allocated pursuant to the
terms hereof; and
(iv) executing such Tranche 1 Letter of Credit on behalf of
each Tranche 1 Lender and following such execution delivering such
Tranche 1 Letter of Credit to the beneficiary of such Tranche 1 Letter
of Credit.
(e) Each Tranche 1 Letter of Credit shall be executed and
delivered by the Issuing Agent in the name and on behalf of, and as
attorney-in-fact for, each Tranche 1 Lender party to such Tranche 1 Letter of
Credit, and the Issuing Agent shall act under each Tranche 1 Letter of Credit,
and each Tranche 1 Letter of Credit shall expressly provide that the Issuing
Agent shall act, as the agent of each Tranche 1 Lender to (a) receive drafts,
other demands for
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payment and other documents presented by the beneficiary under such Tranche 1
Letter of Credit, (b) determine whether such drafts, demands and documents are
in compliance with the terms and conditions of such Tranche 1 Letter of Credit
and (c) notify such Tranche 1 Lender and such Designated Subsidiary Borrower
that a valid drawing has been made and the date that the related Tranche 1
Unpaid Drawing is to be made; provided that the Issuing Agent shall have no
obligation or liability for any Tranche 1 Unpaid Drawing under such Tranche 1
Letter of Credit, and each Tranche 1 Letter of Credit shall expressly so
provide. Each Tranche 1 Lender hereby irrevocably appoints and designates the
Issuing Agent as its attorney-in-fact, acting through any duly authorized
officer of the Issuing Agent, to execute and deliver in the name and on behalf
of such Tranche 1 Lender each Tranche 1 Letter of Credit to be issued by such
Tranche 1 Lender hereunder. Promptly upon the request of the Issuing Agent, each
Tranche 1 Lender will furnish to the Issuing Agent such powers of attorney or
other evidence as any beneficiary of any Tranche 1 Letter of Credit may
reasonably request in order to demonstrate that the Issuing Agent has the power
to act as attorney-in-fact for such Tranche 1 Lender to execute and deliver such
Tranche 1 Letter of Credit.
2A.02 Tranche 1 Letter of Credit Requests. (a) Whenever a
Designated Subsidiary Borrower desires that a Tranche 1 Letter of Credit be
issued, such Designated Subsidiary Borrower shall give the Administrative Agent
and the Issuing Agent written notice (including by way of facsimile
transmission, immediately confirmed in writing by submission of the original of
such request by mail to the Issuing Agent) thereof prior to 11:00 A.M. (New York
time) at least five Business Days (or such shorter period as may be acceptable
to the Issuing Agent) prior to the proposed date of issuance (which shall be a
Business Day), which written notice shall be in the form of Exhibit C-1 (each, a
"Tranche 1 Letter of Credit Request"). Each Tranche 1 Letter of Credit Request
shall include any other documents as the Issuing Agent customarily requires in
connection therewith.
(b) The making of each Tranche 1 Letter of Credit Request
shall be deemed to be a representation and warranty by the applicable Designated
Subsidiary Borrower that such Tranche 1 Letter of Credit may be issued in
accordance with, and it will not violate the requirements of, Section 2A.01(a)
or (b).
(c) Upon its issuance of, or amendment to, any Tranche 1
Letter of Credit, the Issuing Agent shall promptly notify the respective
Designated Subsidiary Borrower and the Tranche 1 Lenders of such issuance or
amendment, which notice shall include a summary description of the Tranche 1
Letter of Credit actually issued and any amendments thereto.
2A.03 Agreement to Repay Tranche 1 Letter of Credit Drawings.
(a) Each Designated Subsidiary Borrower agrees to reimburse each Tranche 1
Lender, by making payment to the Administrative Agent in immediately available
funds at the Payment Office, for any payment or disbursement made by such
Tranche 1 Lender under any Tranche 1 Letter of Credit which has been issued for
such Designated Subsidiary Borrower's account (each such amount so paid or
disbursed until reimbursed, a "Tranche 1 Unpaid Drawing") no later than one
Business Day following the date of such payment or disbursement, with interest
on the amount so paid or disbursed by such Lender, to the extent not reimbursed
prior to 1:00 P.M. (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but not including the date such
Tranche 1 Lender is reimbursed therefor at a rate per annum
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which shall be the Base Rate plus the Applicable Margin for Revolving Loans
maintained as Base Rate Loans as in effect from time to time (or, if the Total
Tranche 1 Commitment has been terminated and all Revolving Loans have been
repaid or converted to Term Loans, the Applicable Margin that would have been in
effect for Revolving Loans maintained as Base Rate Loans) (plus an additional 2%
per annum, payable on demand, if not reimbursed by the third Business Day after
the date of such payment or disbursement).
(b) Each Designated Subsidiary Borrower's obligation under
this Section 2A.03 to reimburse each Tranche 1 Lender with respect to Tranche 1
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which such Designated Subsidiary
Borrower may have or have had against such Tranche 1 Lender, or the Issuing
Agent, including, without limitation, any defense based upon the failure of any
drawing under a Tranche 1 Letter of Credit to conform to the terms of the
Tranche 1 Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that no
Designated Subsidiary Borrower shall be obligated to reimburse any Tranche 1
Lender for any wrongful payment made by such Tranche 1 Lender under a Tranche 1
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Tranche 1 Lender (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
2A.04 Increased Costs. If after the Effective Date, the
adoption or effectiveness of any applicable law, rule or regulation, order,
guideline or request or any change therein after the Effective Date, or any
change adopted or effective after the Effective Date in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Tranche 1 Lender with any request or directive (whether or not having the
force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by or
participated in by such Tranche 1 Lender, or (ii) impose on such Tranche 1
Lender any other conditions directly or indirectly affecting this Agreement or
any Tranche 1 Letter of Credit; and the result of any of the foregoing is to
increase the cost to such Tranche 1 Lender of issuing, maintaining or
participating in any Tranche 1 Letter of Credit, or to reduce the amount of any
sum received or receivable by such Tranche 1 Lender hereunder or reduce the rate
of return on its capital with respect to Tranche 1 Letters of Credit, then, upon
written demand to the respective Designated Subsidiary Borrower by such Tranche
1 Lender (with a copy to the Administrative Agent), such Designated Subsidiary
Borrower agrees to pay to such Tranche 1 Lender such additional amount or
amounts as will compensate such Tranche 1 Lender for such increased cost or
reduction. A certificate submitted to the respective Designated Subsidiary
Borrower by such Tranche 1 Lender (with a copy to the Administrative Agent),
setting forth the basis for the determination of such additional amount or
amounts necessary to compensate such Tranche 1 Lender as aforesaid shall be
final and conclusive and binding on such Designated Subsidiary Borrower absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish any Designated Subsidiary Borrower's obligations to pay
additional amounts pursuant to this Section 2A.04 upon subsequent receipt of
such certificate.
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2A.05 Tranche 1 Letter of Credit Expiration Extensions. Each
Tranche 1 Lender acknowledges that to the extent provided under the terms of any
Tranche 1 Letter of Credit, the expiration date of such Tranche 1 Letter of
Credit will be automatically extended for an additional year, without written
amendment, unless at least 30 days prior to the expiration date of such Tranche
1 Letter of Credit, notice is given by the Issuing Agent to the beneficiary of
such Tranche 1 Letter of Credit in accordance with the terms of the respective
Tranche 1 Letter of Credit (a "Notice of Non-Extension") that the expiration
date of such Tranche 1 Letter of Credit will not be extended beyond its current
expiration date. The Issuing Agent will give Notices of Non-Extension as to any
or all outstanding Tranche 1 Letters of Credit if requested to do so by the
Required Lenders pursuant to Section 9. The Issuing Agent will give Notices of
Non-Extension as to all outstanding Tranche 1 Letters of Credit if the
Commitment Expiration Date has occurred. The Issuing Agent will send a copy of
each Notice of Non-Extension to the respective Designated Subsidiary Borrower
concurrently with delivery thereof to the respective beneficiary, unless
prohibited by law from doing so.
2A.06 Changes to Stated Amount. At any time when any Tranche 1
Letter of Credit is outstanding, at the request of the respective Designated
Subsidiary Borrower, the Issuing Agent will enter into an amendment increasing
or reducing the Stated Amount of such Tranche 1 Letter of Credit, provided that
(i) in no event shall the Stated Amount of such Tranche 1 Letter of Credit be
increased to an amount which, when added to (x) the Tranche 1 Letter of Credit
Outstandings at such time and (y) the aggregate principal amount of all
Revolving Loans then outstanding, would exceed an amount equal to the Total
Tranche 1 Commitment, (ii) the Stated Amount of a Tranche 1 Letter of Credit may
not be increased at any time if the conditions precedent set forth in Section
5.02 are not satisfied at such time, and (iii) the Stated Amount of a Tranche 1
Letter of Credit may not be increased at any time after the date which is 30
days prior to the Commitment Expiration Date.
2A.07 Representations and Warranties of Tranche 1 Lenders.
Each Tranche 1 Lender represents and warrants that each Tranche 1 Letter of
Credit constitutes a legal, valid and binding obligation of such Tranche 1
Lender enforceable in accordance with its terms.
SECTION 2B Tranche 2 Letters of Credit.
2B.01 Tranche 2 Letters of Credit. (a) Subject to and upon the
terms and conditions set forth herein, each Designated Subsidiary Borrower may
request the Issuing Agent, at any time and from time to time after the Effective
Date and prior to the date which is 30 days prior to the Commitment Expiration
Date, to issue on behalf of the Tranche 2 Lenders, for the account of such
Designated Subsidiary Borrower and in support of, on a standby basis, Letter of
Credit Supportable Obligations and, subject to and upon the terms and conditions
set forth herein, the Issuing Agent agrees to issue on behalf of the Tranche 2
Lenders at any time and from time to time after the Effective Date and prior to
the date which is 30 days prior to the Commitment Expiration Date, one or more
irrevocable standby letters of credit in such form as may be approved by the
Issuing Agent (each such letter of credit, a "Tranche 2 Letter of Credit" and,
collectively, the "Tranche 2 Letters of Credit"). Notwithstanding the foregoing,
the Issuing Agent shall be under no obligation to issue any Tranche 2 Letter of
Credit if at the time of such issuance:
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(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Agent from issuing such Tranche 2 Letter of Credit
or any requirement of law applicable to such Issuing Agent or any
Tranche 2 Lender or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the Issuing Agent or any Tranche 2 Lender shall prohibit, or request
that the Issuing Agent or any Tranche 2 Lender refrain from, the
issuance of letters of credit generally or such Tranche 2 Letter of
Credit in particular or shall impose upon the Issuing Agent or any
Tranche 2 Lender with respect to such Tranche 2 Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing
Agent or any Tranche 2 Lender is not otherwise compensated) not in
effect on the Effective Date, or any unreimbursed loss, cost or expense
which was not applicable, in effect or known to the Issuing Agent or
any Tranche 2 Lender as of the Effective Date;
(ii) the conditions precedent set forth in Section 5.02 are
not satisfied at that time; or
(iii) the Issuing Agent shall have received notice from any
Borrower or the Required Lenders prior to the issuance of such Tranche
2 Letter of Credit of the type described in clause (iv) of Section
2B.01(b).
(b) Notwithstanding the foregoing, (i) no Tranche 2 Letter of
Credit shall be issued the Stated Amount of which, when added to the Tranche 2
Letter of Credit Outstandings (exclusive of Tranche 2 Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Tranche 2
Letter of Credit) at such time, would exceed an amount equal to the Total
Tranche 2 Commitment at such time; (ii) each Tranche 2 Letter of Credit shall
have an expiry date occurring not later than one year after such Tranche 2
Letter of Credit's date of issuance; provided that each such Tranche 2 Letter of
Credit may by its terms automatically renew annually for one additional year
unless the Issuing Agent notifies the beneficiary thereof, in accordance with
the terms of such Tranche 2 Letter of Credit, that such Tranche 2 Letter of
Credit will not be renewed; (iii) each Tranche 2 Letter of Credit shall be
denominated in Dollars; and (iv) the Issuing Agent will not issue any Tranche 2
Letter of Credit after it has received written notice from any Borrower or the
Required Lenders stating that a Default or an Event of Default exists until such
time as the Issuing Agent shall have received a written notice of (x) rescission
of such notice from the party or parties originally delivering the same or (y) a
waiver of such Default or Event of Default by the Required Lenders (or, to the
extent provided by Section 12.11, each of the Lenders).
(c) Each Tranche 2 Letter of Credit will be issued by the
Issuing Agent on behalf of the Tranche 2 Lenders and each Tranche 2 Lender will
participate in each Tranche 2 Letter of Credit pro rata in accordance with its
Tranche 2 Percentage. The obligations of each Tranche 2 Lender under and in
respect of each Tranche 2 Letter of Credit are several, and the failure by any
Tranche 2 Lender to perform its obligations hereunder or under any Tranche 2
Letter of Credit shall not affect the obligations of the respective Borrower
toward any other party hereto nor shall any other such party be liable for the
failure by such Tranche 2 Lender to perform its obligations hereunder or under
any Tranche 2 Letter of Credit.
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(d) Subject to and on the terms and conditions set forth
herein, the Issuing Agent is hereby authorized by each Designated Subsidiary
Borrower and the Tranche 2 Lenders to arrange for the issuance of any Tranche 2
Letter of Credit pursuant to Section 2B.01(a) and the amendment of any Tranche 2
Letter of Credit pursuant to Section 1.13, Section 2B.06 and/or Section 12.04(b)
by:
(i) completing the commencement date and the expiry date of
such Tranche 2 Letter of Credit;
(ii) in the case of an amendment increasing or reducing the
amount thereof, amending such Tranche 2 Letter of Credit in such manner
as the Issuing Agent and the respective beneficiary may agree;
(iii) completing such Tranche 2 Letter of Credit with the
participation of each Tranche 2 Lender as allocated pursuant to the
terms hereof; and
(iv) executing such Tranche 2 Letter of Credit on behalf of
each Tranche 2 Lender and following such execution delivering such
Tranche 2 Letter of Credit to the beneficiary of such Tranche 2 Letter
of Credit.
(e) Each Tranche 2 Letter of Credit shall be executed and
delivered by the Issuing Agent in the name and on behalf of, and as
attorney-in-fact for, each Tranche 2 Lender party to such Tranche 2 Letter of
Credit, and the Issuing Agent shall act under each Tranche 2 Letter of Credit,
and each Tranche 2 Letter of Credit shall expressly provide that the Issuing
Agent shall act, as the agent of each Tranche 2 Lender to (a) receive drafts,
other demands for payment and other documents presented by the beneficiary under
such Tranche 2 Letter of Credit, (b) determine whether such drafts, demands and
documents are in compliance with the terms and conditions of such Tranche 2
Letter of Credit and (c) notify such Tranche 2 Lender and such Designated
Subsidiary Borrower that a valid drawing has been made and the date that the
related Tranche 2 Unpaid Drawing is to be made; provided that the Issuing Agent
shall have no obligation or liability for any Tranche 2 Unpaid Drawing under
such Tranche 2 Letter of Credit, and each Tranche 2 Letter of Credit shall
expressly so provide. Each Tranche 2 Lender hereby irrevocably appoints and
designates the Issuing Agent as its attorney-in-fact, acting through any duly
authorized officer of the Issuing Agent, to execute and deliver in the name and
on behalf of such Tranche 2 Lender each Tranche 2 Letter of Credit to be issued
by such Tranche 2 Lender hereunder. Promptly upon the request of the Issuing
Agent, each Tranche 2 Lender will furnish to the Issuing Agent such powers of
attorney or other evidence as any beneficiary of any Tranche 2 Letter of Credit
may reasonably request in order to demonstrate that the Issuing Agent has the
power to act as attorney-in-fact for such Tranche 2Lender to execute and deliver
such Tranche 2 Letter of Credit.
2B.02 Tranche 2 Letter of Credit Requests. (a) Whenever a
Designated Subsidiary Borrower desires that a Tranche 2 Letter of Credit be
issued, such Designated Subsidiary Borrower shall give the Administrative Agent
and the Issuing Agent written notice (including by way of facsimile
transmission, immediately confirmed in writing by submission of the original of
such request by mail to the Issuing Agent) thereof prior to 11:00 A.M. (New York
time) at least five Business Days (or such shorter period as may be acceptable
to the Issuing
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Agent) prior to the proposed date of issuance (which shall be a Business Day),
which written notice shall be in the form of Exhibit C-2 (each, a "Tranche 2
Letter of Credit Request"). Each Tranche 2 Letter of Credit Request shall
include any other documents as the Issuing Agent customarily requires in
connection therewith.
(b) The making of each Tranche 2 Letter of Credit Request
shall be deemed to be a representation and warranty by the applicable
Designated Subsidiary Borrower that such Tranche 2 Letter of Credit may be
issued in accordance with, and it will not violate the requirements of,
Section 2B.01(a) or (b).
(c) Upon its issuance of, or amendment to, any Tranche 2
Letter of Credit, the Issuing Agent shall promptly notify the respective
Designated Subsidiary Borrower and the Tranche 2 Lenders of such issuance or
amendment, which notice shall include a summary description of the Tranche 2
Letter of Credit actually issued and any amendments thereto.
2B.03 Agreement to Repay Tranche 2 Letter of Credit Drawings.
(a) Each Designated Subsidiary Borrower agrees to reimburse each Tranche 2
Lender, by making payment to the Administrative Agent in immediately available
funds at the Payment Office, for any payment or disbursement made by such
Tranche 2 Lender under any Tranche 2 Letter of Credit which has been issued for
such Designated Subsidiary Borrower's account (each such amount so paid or
disbursed until reimbursed, a "Tranche 2 Unpaid Drawing") no later than one
Business Day following the date of such payment or disbursement, with interest
on the amount so paid or disbursed by such Tranche 2 Lender, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not including
the date such Tranche 2 Lender is reimbursed therefor at a rate per annum which
shall be the Base Rate plus the Applicable Margin for Revolving Loans maintained
as Base Rate Loans as in effect from time to time (or, if the Total Tranche 1
Commitment has been terminated and all Revolving Loans have been repaid or
converted to Term Loans, the Applicable Margin that would have been in effect
for Revolving Loans maintained as Base Rate Loans) (plus an additional 2% per
annum, payable on demand, if not reimbursed by the third Business Day after the
date of such payment or disbursement).
(b) Each Designated Subsidiary Borrower's obligation under
this Section 2B.03 to reimburse each Tranche 2 Lender with respect to Tranche 2
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which such Designated Subsidiary
Borrower may have or have had against such Tranche 2 Lender, or the Issuing
Agent, including, without limitation, any defense based upon the failure of any
drawing under a Tranche 2 Letter of Credit to conform to the terms of the
Tranche 2 Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that no
Designated Subsidiary Borrower shall be obligated to reimburse any Tranche 2
Lender for any wrongful payment made by such Tranche 2 Lender under a Tranche 2
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Tranche 2 Lender (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
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2B.04 Increased Costs. If after the Effective Date, the
adoption or effectiveness of any applicable law, rule or regulation, order,
guideline or request or any change therein after the Effective Date, or any
change adopted or effective after the Effective Date in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Tranche 2 Lender with any request or directive (whether or not having the
force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by or
participated in by such Tranche 2 Lender, or (ii) impose on such Tranche 2
Lender any other conditions directly or indirectly affecting this Agreement or
any Tranche 2 Letter of Credit; and the result of any of the foregoing is to
increase the cost to such Tranche 2 Lender of issuing, maintaining or
participating in any Tranche 2 Letter of Credit, or to reduce the amount of any
sum received or receivable by such Tranche 2 Lender hereunder or reduce the rate
of return on its capital with respect to Tranche 2 Letters of Credit, then, upon
written demand to the respective Designated Subsidiary Borrower by such Tranche
2 Lender (with a copy to the Administrative Agent), such Designated Subsidiary
Borrower agrees to pay to such Tranche 2 Lender such additional amount or
amounts as will compensate such Tranche 2 Lender for such increased cost or
reduction. A certificate submitted to the respective Designated Subsidiary
Borrower by such Tranche 2 Lender (with a copy to the Administrative Agent),
setting forth the basis for the determination of such additional amount or
amounts necessary to compensate such Tranche 2 Lender as aforesaid shall be
final and conclusive and binding on such Designated Subsidiary Borrower absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish any Designated Subsidiary Borrower's obligations to pay
additional amounts pursuant to this Section 2B.04 upon subsequent receipt of
such certificate.
2B.05 Tranche 2 Letter of Credit Expiration Extensions. Each
Tranche 2 Lender acknowledges that to the extent provided under the terms of any
Tranche 2 Letter of Credit, the expiration date of such Tranche 2 Letter of
Credit will be automatically extended for an additional year, without written
amendment, unless at least 30 days prior to the expiration date of such Tranche
2 Letter of Credit, notice is given by the Issuing Agent to the beneficiary of
such Tranche 2 Letter of Credit in accordance with the terms of the respective
Tranche 2 Letter of Credit (a "Notice of Non-Extension") that the expiration
date of such Tranche 2 Letter of Credit will not be extended beyond its current
expiration date. The Issuing Agent will give Notices of Non-Extension as to any
or all outstanding Tranche 2 Letters of Credit if requested to do so by the
Required Lenders pursuant to Section 9. The Issuing Agent will give Notices of
Non-Extension as to all outstanding Tranche 2 Letters of Credit if the
Commitment Expiration Date has occurred. The Issuing Agent will send a copy of
each Notice of Non-Extension to the respective Designated Subsidiary Borrower
concurrently with delivery thereof to the respective beneficiary, unless
prohibited by law from doing so.
2B.06 Changes to Stated Amount. At any time when any Tranche 2
Letter of Credit is outstanding, at the request of the respective Designated
Subsidiary Borrower, the Issuing Agent will enter into an amendment increasing
or reducing the Stated Amount of such Tranche 2 Letter of Credit, provided that
(i) in no event shall the Stated Amount of such Tranche 2 Letter of Credit be
increased to an amount which, when added to the Tranche 2 Letter of Credit
Outstandings at such time, would exceed an amount equal to the Total Tranche 2
Commitment, (ii) the Stated Amount of a Tranche 2 Letter of Credit may not be
increased at any time if the
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conditions precedent set forth in Section 5.02 are not satisfied at such time,
and (iii) the Stated Amount of a Tranche 2 Letter of Credit may not be increased
at any time after the date which is 30 days prior to the Commitment Expiration
Date.
2B.07 Representations and Warranties of Tranche 2 Lenders.
Each Tranche 2 Lender represents and warrants that each Tranche 2 Letter of
Credit constitutes a legal, valid and binding obligation of such Tranche 2
Lender enforceable in accordance with its terms.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrowers jointly and severally agree to
pay the Administrative Agent a facility fee (the "Tranche 1 Facility Fee") for
the account of the Tranche 1 Lenders pro rata on the basis of (i) prior to the
Commitment Expiration Date, their respective Tranche 1 Commitments and (ii) on
or after the Commitment Expiration Date, their respective Term Loans then
outstanding plus their respective Tranche 1 Percentages of Tranche 1 Letter of
Credit Outstandings at such time, in each case for the period from and including
the Effective Date to but not including the Final Maturity Date, computed at a
per annum rate equal to the Applicable Margin of (x) in the case of clause (i)
of above, the Total Tranche 1 Commitment (as in effect from time to time)
(regardless of utilization) and (y) in the case of clause (ii) above, the sum of
the aggregate amount of Term Loans then outstanding plus the Tranche 1 Letter of
Credit Outstandings at such time. Accrued Tranche 1 Facility Fees shall be due
and payable quarterly in arrears on the last Business Day of each calendar
quarter and on the Final Maturity Date and, with respect to any Tranche 1
Facility Fee owing to any Tranche 1 Lender who is replaced pursuant to Section
1.13, on the date on which such Tranche 1 Lender is replaced.
(b) The Designated Subsidiary Borrowers jointly and severally
agree to pay the Administrative Agent a facility fee (the "Tranche 2 Facility
Fee") for the account of the Tranche 2 Lenders pro rata on the basis of (i)
prior to the Commitment Expiration Date, their respective Tranche 2 Commitments
and (ii) on or after the Commitment Expiration Date, their respective Tranche 2
Percentages of Tranche 2 Letter of Credit Outstandings at such time, in each
case for the period from and including the Effective Date to but not including
the Final Maturity Date, computed at a per annum rate equal to the Applicable
Margin of (x) in the case of clause (i) of above, the Total Tranche 2 Commitment
(as in effect from time to time) (regardless of utilization) and (y) in the case
of clause (ii) above, the Tranche 2 Letter of Credit Outstandings at such time.
Accrued Tranche 2 Facility Fees shall be due and payable quarterly in arrears on
the last Business Day of each calendar quarter and on the Final Maturity Date
and, with respect to any Tranche 2 Facility Fee owing to any Tranche 2 Lender
who is replaced pursuant to Section 1.13, on the date on which such Tranche 2
Lender is replaced.
(c) The Parent Borrower agrees to pay to the Administrative
Agent a utilization fee (the "Utilization Fee") for the account of the Tranche 1
Lenders pro rata on the basis of (i) prior to the Commitment Expiration Date,
their respective Commitments and (ii) on or after the Commitment Expiration
Date, their respective Term Loans, in each case for the period from and
including the Effective Date to but not including the Term Loan Maturity Date,
computed at a rate per annum equal to 0.125% of the aggregate outstanding amount
of Revolving Loans or Term Loans incurred by the Parent Borrower, as the case
may be, at any time when the aggregate outstanding amount of Revolving Loans
incurred by the Parent Borrower or Term Loans
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incurred by the Parent Borrower, as the case may be, is greater than
$40,000,000. Accrued Utilization Fees shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter and on the Term Loan
Maturity Date and, with respect to any Utilization Fee owing to any Lender who
is replaced pursuant to Section 1.13, on the date on which such Tranche 1 Lender
is replaced.
(d) Each Designated Subsidiary Borrower agrees to pay to the
Administrative Agent for pro rata distribution to each Tranche 1 Lender (based
on their respective Tranche 1 Percentages), a fee in respect of each Tranche 1
Letter of Credit issued for the account of such Designated Subsidiary Borrower
(the "Tranche 1 Letter of Credit Fee") computed at a rate per annum equal to the
Applicable Margin then in effect for Revolving Loans maintained as Eurodollar
Loans (or, if the Total Tranche 1 Commitment has been terminated and all
Revolving Loans have either been repaid or converted to Term Loans, the
Applicable Margin that would have been in effect for Revolving Loans maintained
as Eurodollar Loans), on the daily Stated Amount of such Tranche 1 Letter of
Credit. Accrued Tranche 1 Letter of Credit Fees shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter and upon
the first day on or after the termination of the Total Tranche 1 Commitment upon
which no Tranche 1 Letters of Credit remain outstanding.
(e) Each Designated Subsidiary Borrower agrees to pay to the
Administrative Agent for pro rata distribution to each Tranche 2 Lender (based
on their respective Tranche 2 Percentages), a fee in respect of each Tranche 2
Letter of Credit issued for the account of such Designated Subsidiary Borrower
(the "Tranche 2 Letter of Credit Fee") computed at a rate per annum equal to the
Applicable Margin then in effect for Revolving Loans maintained as Eurodollar
Loans (or, if the Total Tranche 1 Commitment has been terminated and all
Revolving Loans have either been repaid or converted to Term Loans, the
Applicable Margin that would have been in effect for Revolving Loans maintained
as Eurodollar Loans), on the daily Stated Amount of such Tranche 2 Letter of
Credit. Accrued Tranche 2 Letter of Credit Fees shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter and upon
the first day on or after the termination of the Total Tranche 2 Commitment upon
which no Tranche 2 Letters of Credit remain outstanding.
(f) Each Designated Subsidiary Borrower agrees to pay directly
to the Issuing Agent upon each issuance of and/or amendment of, a Letter of
Credit issued for the account of such Designated Subsidiary Borrower such amount
as shall at the time of such issuance or amendment be the administrative charge
which the Issuing Agent is customarily charging for issuances of, or amendments
of, letters of credit issued by it.
(g) The Borrowers jointly and severally agree to pay to the
Administrative Agent, for the account of the Administrative Agent, when and as
due, such fees as have been, or are from time to time, separately agreed upon.
(h) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. (a) Upon at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) given by the
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Parent Borrower to the Administrative Agent at its Notice Office (which notice
shall be deemed to be given on a certain day only if given before 11:00 A.M.
(New York time) on such day and the Administrative Agent shall promptly transmit
such notice to each of the Tranche 1 Lenders), the Parent Borrower shall have
the right, without premium or penalty, to terminate or partially reduce the
Total Unutilized Tranche 1 Commitment, provided that (x) any such reduction
shall apply to permanently reduce the Total Unutilized Tranche 1 Commitment and
to proportionately reduce the Tranche 1 Commitment of each Tranche 1 Lender, and
(y) any partial reduction pursuant to this Section 3.02(a) shall be in integral
multiples of at least $5,000,000.
(b) Upon at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) given by the Parent
Borrower to the Administrative Agent at its Notice Office (which notice shall be
deemed to be given on a certain day only if given before 11:00 A.M. (New York
time) on such day and the Administrative Agent shall promptly transmit such
notice to each of the Tranche 2 Lenders), the Parent Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the Total
Unutilized Tranche 2 Commitment, provided that (x) any such reduction shall
apply to permanently reduce the Total Unutilized Tranche 2 Commitment and to
proportionately reduce the Tranche 2 Commitment of each Tranche 2 Lender, and
(y) any partial reduction pursuant to this Section 3.02(b) shall be in integral
multiples of at least $5,000,000.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitment (and the Commitment of each Lender) shall be terminated at 5:00 p.m.
(New York time) on the Expiration Date unless the Effective Date has occurred on
or before such date.
(b) Unless previously terminated pursuant to Section 3.02 or
Section 3.03(a) above, the Total Commitment shall terminate at 9:00 A.M. on the
Commitment Expiration Date.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Parent Borrower shall have the
right to prepay Revolving Loans or Term Loans, without premium or penalty
(except for amounts payable to Section 1.11), in whole or in part, from time to
time on the following terms and conditions: (i) the Parent Borrower shall give
the Administrative Agent at the Payment Office written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay the Loans,
specifying whether such Loans are Revolving Loans or Term Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which such Loans were made, which notice shall be received by the
Administrative Agent (x) in the case of Base Rate Loans, no later than 11:00
A.M. (New York time) one Business Day prior to the date of such prepayment, or
(y) in the case of Eurodollar Loans, at least three Business Days prior to the
date of such prepayment and which notice shall promptly be transmitted by the
Administrative Agent to each of the Lenders; (ii) each partial prepayment shall
be in an aggregate principal amount of at least $1,000,000, provided that no
partial prepayment of any Loans shall reduce the aggregate principal amount of
the Loans outstanding to an amount less than $1,000,000; (iii) each prepayment
in respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans; and (iv) prepayments of Eurodollar Loans made pursuant to this
Section 4.01 may only be made on the last day of an Interest Period applicable
thereto unless concurrently
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with such prepayment any payments required to be made pursuant to Section 1.11
as a result of such prepayment are made.
4.02 Mandatory Repayments. (a) If on any date prior to the
Commitment Expiration Date, the sum of the aggregate outstanding principal
amount of Revolving Loans plus the Tranche 1 Letter of Credit Outstandings
exceeds the Total Tranche 1 Commitment as then in effect, the Parent Borrower
shall repay on such day the outstanding Revolving Loans in an aggregate
principal amount equal to the amount by which the aggregate outstanding
principal amount of Revolving Loans plus the Tranche 1 Letter of Credit
Outstandings exceeds the Total Tranche 1 Commitment as then in effect. If, after
giving effect to the prepayment of all outstanding Revolving Loans, as set forth
above, the Tranche 1 Letter of Credit Outstandings exceeds the Total Tranche 1
Commitment, the Parent Borrower shall pay, or cause one or more Borrowers to
pay, to the Administrative Agent at the Payment Office on such date an amount of
cash and/or Cash Equivalents equal to the amount of such excess, such cash
and/or Cash Equivalents to be held as security for all obligations of the
Borrowers to the Tranche 1 Lenders hereunder in a cash collateral account to be
established by the Administrative Agent on terms reasonably satisfactory to the
Administrative Agent.
. (b) If on any date prior to the Commitment Expiration Date,
the Tranche 2 Letter of Credit Outstandings exceeds the Total Tranche 2
Commitment as then in effect, the Parent Borrower shall pay, or cause one or
more Borrowers to pay, to the Administrative Agent at the Payment Office on such
date an amount of cash and/or Cash Equivalents equal to the amount of such
excess, such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrowers to the Tranche 2 Lenders hereunder in a cash
collateral account to be established by the Administrative Agent on terms
reasonably satisfactory to the Administrative Agent.
(c) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (x) all outstanding Revolving Loans not converted
to Term Loans pursuant to Section 1.01(b) shall be repaid in full on the
Commitment Expiration Date and (y) all outstanding Term Loans shall be repaid in
full on the Term Loan Maturity Date.
(d) With respect to each prepayment of Loans required by
Section 4.02(a), the Parent Borrower may designate the Types of Loans which are
to be prepaid and the specific Borrowing or Borrowings pursuant to which such
Loans were made, provided that (i) if any prepayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than $1,000,000 for such
Borrowing, then all Eurodollar Loans outstanding pursuant to such Borrowing
shall be immediately converted into a Borrowing of Base Rate Loans and (ii) each
prepayment of Loans made pursuant to the same Borrowing shall be applied pro
rata among the Lenders which made such Loans. In the absence of a designation by
the Parent Borrower as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its sole discretion.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement and the Notes
shall be made to the Administrative Agent for the ratable account of the Lenders
entitled thereto, not later than 11:00 A.M. (New
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York time) on the date when due and shall be made in immediately available funds
and in lawful money of the United States of America at the Payment Office, it
being understood that written, telex or facsimile notice by a Borrower to the
Administrative Agent to make a payment from the funds in such Borrower's account
at the Payment Office shall constitute the making of such payment to the extent
of such funds held in such account. Any payments under this Agreement which are
made later than 11:00 A.M. (New York time) shall be deemed to have been made on
the next succeeding Business Day. Whenever any payment to be made hereunder
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by any Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect to such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively, as "Taxes"). If any Taxes are so levied or imposed, the Borrowers
jointly and severally agree to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrowers jointly and severally agree to reimburse each
Lender, upon the written request of such Lender, for taxes imposed on or
measured by the net income or net profits of such Lender, and franchise taxes
imposed in lieu of taxes imposed on or measured by net income or net profits of
a Lender, pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located and
for any withholding of taxes as such Lender shall determine are payable by, or
withheld from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrowers
will furnish to the Administrative Agent within 45 days after the date the
payment of any Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrowers. The Borrowers jointly and
severally agree to indemnify and hold harmless each Lender, and reimburse such
Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender.
(b) Each Lender that is issuing Letters of Credit for the
account of a Designated Subsidiary Borrower organized under the laws of the
United States (each, a "U.S.
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Borrower") and is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees to deliver
to each U.S. Borrower and the Administrative Agent on or prior to the date that
such U.S. Borrower becomes a Designated Subsidiary Borrower pursuant to Section
1.14, or in the case of a Lender that is issuing Letters of Credit for the
account of a U.S. Borrower and is an assignee or transferee of an interest under
this Agreement pursuant to Section 1.13 or Section 12.04 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, or in the
case of an Additional Tranche 1 Lender that is issuing Letters of Credit to a
U.S. Borrower (unless the respective Additional Tranche 1 Lender was already a
Tranche 1 Lender hereunder immediately prior to such assignment of transfer), on
such Additional Tranche 1 Commitment Date, (i) two accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) (or successor
forms) certifying to such Lender's entitlement as of such date to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, or (ii) if the Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete
exemption under an income tax treaty) pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN (with respect to the
portfolio interest exemption) (or successor form) certifying to such Lender's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Lender that is lending to a U.S.
Borrower agrees that from time to time after the Effective Date, when a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, such Lender will deliver to each U.S.
Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect
to the benefits of any income tax treaty), or Form W-8BEN (with respect to the
portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as the case
may be, and such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement and
any Note, or it shall immediately notify each U.S. Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate,
in which case such Lender shall not be required to deliver any such Form or
Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section 12.04(b) and the
immediately succeeding sentence, (x) each U.S. Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, Fees or other amounts
payable hereunder for the account of any Lender which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Lender has not provided to
such U.S. Borrower, the U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) no U.S. Borrower
shall be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Lender in respect of income or similar taxes imposed by the United
States (I) if such Lender has not provided to such U.S. Borrower, the Internal
Revenue Service
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Forms required to be provided to U.S. Borrower pursuant to this Section 4.04(b)
or (II) in the case of a payment by the U.S. Borrowers, other than interest, to
a Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 12.04(b), the Borrowers
jointly and severally agree to pay any additional amounts and to indemnify each
Lender in the manner set forth in Section 4.04(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes that are effective after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such income or similar taxes.
(c) Each Lender agrees to use reasonable efforts (consistent
with legal and regulatory restrictions and subject to overall policy
considerations of such Lender) to file any certificate or document or to furnish
to any Borrower that is not a U.S. Borrower any information as reasonably
requested by such Borrower that may be necessary to establish any available
exemption from, or reduction in the amount of, any Taxes; provided, however,
that nothing in this Section 4.04(c) shall require a Lender to disclose any
confidential information (including, without limitation, its tax returns or its
Tax calculations).
SECTION 5. Conditions Precedent.
5.01 Conditions Precedent to the Effective Date. This
Agreement shall become effective on the date (the "Effective Date") on which
each of the following conditions shall have been satisfied, or waived by the
Required Lenders:
(a) Execution of Agreement; Notes. On the Effective Date, (i)
each of the Parent Borrower, the Initial Designated Subsidiary Borrowers, the
Administrative Agent and each of the Lenders shall have signed a copy hereof
(whether the same or different copies) and shall have delivered the same to the
Administrative Agent at its Notice Office or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written or facsimile transmission notice (actually received) at the Notice
Office that the same has been signed and mailed to the Administrative Agent; and
(ii) there shall have been delivered to the Administrative Agent for the account
of each Lender that has requested the same the appropriate Note or Notes,
executed by the Parent Borrower, in each case, in the amount, maturity and as
otherwise provided herein.
(b) Opinion of Counsel. On the Effective Date, the
Administrative Agent shall have received (i) an opinion, in form and substance
reasonably satisfactory to the Administrative Agent, addressed to the
Administrative Agent and each of the Lenders and dated the Effective Date, from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special United States counsel to the
Borrowers, which opinion shall cover the matters contained in Exhibit E-1 hereto
and (ii) an opinion, in form and substance reasonably satisfactory to the
Administrative Agent, addressed to the Administrative Agent and each of the
Lenders and dated the Effective Date, from Xxxxxxx, Xxxxxxxx & Xxxxx, special
Bermuda counsel to the Borrowers, which opinion shall cover the matters covered
in Exhibit E-2 hereto.
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(c) Officer's Certificate; Corporate Proceedings. (i) On the
Effective Date, the Administrative Agent shall have received, from the Parent
Borrower and each Initial Designated Subsidiary Borrower, a certificate, dated
the Effective Date, signed by the President or any Vice President of such
Borrower, and attested to by the Secretary or any Assistant Secretary of such
Borrower, in the form of Exhibit F hereto with appropriate insertions and
deletions, together with (x) copies of its certificate of incorporation, by-laws
or other organizational documents and (y) the resolutions relating to the Credit
Documents which shall be satisfactory to the Administrative Agent.
(ii) On or prior to the Effective Date, all corporate and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Administrative Agent, and
the Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including certificates of existence or good
standing certificates, as applicable, and any other records of corporate
proceedings and governmental approvals, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
(d) Adverse Change, etc. Since November 30, 2001, nothing
shall have occurred or become known to the Administrative Agent or the Required
Lenders which has had, or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
(e) Litigation. On the Effective Date, no actions, suits or
proceedings by any entity (private or governmental) shall be pending against the
Parent Borrower or any of its Subsidiaries (i) with respect to this Agreement,
any other Document, the Transaction or any of the transactions contemplated
hereby or thereby or (ii) which has had, or would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
(f) Approvals, etc. On the Effective Date, all necessary
governmental and third party approvals, permits and licenses in connection with
the Transaction and the other transactions contemplated by the Documents and
otherwise referred to herein or therein, shall have been obtained and remain in
full force and effect.
(g) Indebtedness, etc. On the Effective Date, the Parent
Borrower and its Subsidiaries shall have no outstanding preferred stock or
Indebtedness except (w) the Obligations, (x) the obligations under the
Three-Year Term Loan Documents, (y) Indebtedness set forth on Annex V and (z)
Indebtedness (on an individual basis) which has an outstanding principal balance
of less than $1,000,000.
(h) No Default; Representations and Warranties. On the
Effective Date, there shall exist no Default or Event of Default, and all
representations and warranties made by each Borrower contained herein or in any
other Credit Document shall be true and correct in all material respects (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
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(i) A.M. Best Rating. On the Effective Date, each Regulated
Insurance Company shall have an A.M. Best financial strength rating of at least
"A-".
(j) Fees. On the Effective Date, the Borrowers shall have paid
the Administrative Agent and the Lenders all fees, expenses (including, without
limitation, legal fees and expenses) and other compensation contemplated by this
Agreement and the other Credit Documents, agreed upon by such parties to be paid
on or prior to the Effective Date.
5.02 Conditions Precedent to All Loans and Letters of Credit.
The obligation of each Lender to make each Loan and the obligation of the
Issuing Agent to issue or amend any Letter of Credit is subject, at the time of
the making of each such Loan or Letter of Credit issued or amended, to the
satisfaction of the following conditions:
(a) Effective Date. The Effective Date shall have occurred.
(b) No Default; Representations and Warranties. (i) There
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of such
Loan or such issuance or amendment of a Letter of Credit, as the case may be (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
(c) Notice of Borrowing. The Administrative Agent shall have
received (i) a Notice of Borrowing meeting the requirements of Section 1.03(a)
with respect to each incurrence of Loans and (ii) a Letter of Credit Request
meeting the requirements of Section 2.02 with respect to each Letter of Credit
to be issued.
The occurrence of the Effective Date shall constitute a
representation and warranty by each Borrower to the Administrative Agent and
each of the Lenders that all the conditions specified in Section 5.01 exist as
of that time. Thereafter, the acceptance of the benefits of each Loan and Letter
of Credit shall constitute a representation and warranty by the respective
Borrower to the Administrative Agent and each of the Lenders that the conditions
specified in Section 5.02 exist as of that time. All of the Notes, certificates,
legal opinion and other documents and papers referred to in this Section 5,
unless otherwise specified, shall be delivered to the Administrative Agent at
its Notice Office for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
in form and substance reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall give the Parent Borrower and each Lender written
notice that the Effective Date has occurred.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this Agreement and to make the Loans
and issue or amend the Letters of Credit provided for herein, each Borrower
hereby makes the following representations and warranties to, and agreements
with, the Lenders, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans and the issuance of any Letters of Credit
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(with the making of each Loan and the issuance or amendment of each Letter of
Credit being deemed to constitute a representation and warranty that the matters
specified in this Section 6 are true and correct in all material respects on and
as of the date of the making of such Loan or issuance or amendment of such
Letter of Credit, as the case may be, unless such representation and warranty
expressly indicates that it is being made as of any specific date in which case
such representation and warranty shall be true and correct in all material
respects only as of such specified date):
6.01 Corporate Status. Each of the Parent Borrower and each of
its Subsidiaries (i) is a duly organized and validly existing corporation or
business trust or other entity in good standing under the laws of the
jurisdiction of its organization and has the corporate or other organizational
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage, and (ii) has been duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except, in the case of
this clause (ii), where the failure to be so qualified, authorized or in good
standing would not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Borrower has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Borrower has duly executed
and delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Borrower
enforceable against such Borrower in accordance with its terms, except to the
extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally and
general principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
6.03 No Contravention of Laws, Agreements or Organizational
Documents. Neither the execution, delivery and performance by any Borrower of
this Agreement or the other Documents to which it is a party nor compliance with
the terms and provisions thereof, nor the consummation of the transactions
contemplated therein, (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of the Parent Borrower or any of its Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement, credit agreement or
any other material instrument to which the Parent Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
certificate of incorporation, by-laws or other organizational documents of the
Parent Borrower or any of its Subsidiaries.
6.04 Litigation and Contingent Liabilities. There are no
actions, suits or proceedings pending or threatened in writing involving the
Parent Borrower or any of its Subsidiaries (including, without limitation, with
respect to this Agreement or any other
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Document) that have had, or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
6.05 Use of Proceeds; Margin Regulations. (a) All proceeds of
the Loans shall be utilized for the general corporate and working capital
purposes of the Parent Borrower and its Subsidiaries.
(b) Neither the making of any Loan hereunder or other
Indebtedness or financing of any Borrower, nor the use of the proceeds thereof,
will violate or be inconsistent with the provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve System and no part of the proceeds
of any Loan or other Indebtedness or financing of any Borrower will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06 Approvals. Any order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, which is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any Document,
has been obtained.
6.07 Investment Company Act. Neither the Parent 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.
6.08 Public Utility Holding Company Act. Neither the Parent
Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure; Projections and
Assumptions. All factual information (taken as a whole) heretofore or
contemporaneously furnished by the Parent Borrower or any of its Subsidiaries to
the Administrative Agent or any Lender in writing (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is, and
all other factual information (taken as a whole with all other such information
theretofore or contemporaneously furnished) hereafter furnished by any such
Persons in writing to the Administrative Agent will be, true and accurate in all
material respects on the date as of which such information is dated and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole with all other such information theretofore or
contemporaneously furnished) not misleading at such time in light of the
circumstances under which such information was provided. The projections
contained in such materials are based on good faith estimates and assumptions
believed by the Parent Borrower to be reasonable and attainable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results.
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6.10 Financial Condition; Financial Statements. (a) The
consolidated balance sheet of ESI for the fiscal year ended December 14, 2001
and the related consolidated statements of income, shareholders' equity and cash
flows, reported on by Ernst & Young LLP, copies of which have been delivered to
each of the Lenders, and the unaudited consolidated balance sheet of ESI for its
fiscal quarter ended March 31, 2002 and the related consolidated statements of
income, shareholders' equity and cash flows, copies of which have been delivered
to each of the Lenders, fairly present, in each case, in conformity with GAAP or
SAP, as applicable, consistently applied, the consolidated financial position
and results of operations and cash flows of ESI as of such dates and their
consolidated results of operations and cash flows for such periods stated.
(b) The pro forma consolidated balance sheet of the Parent
Borrower and its Subsidiaries for the fiscal quarter of the Parent Borrower
ended March 31, 2002, and the related pro forma consolidated statement of income
(in each case, after giving effect to the Transaction and any other significant
transactions in the case of said pro forma financial statements), copies of
which have been delivered to each of the Lenders, fairly present, in all
material respects, the pro forma consolidated financial position and results of
operations of the Parent Borrower and its Subsidiaries for the periods covered
thereby and have been prepared in accordance with Regulation S-X of the
Securities Act of 1933 (as amended).
(c) Since November 30, 2001, nothing has occurred which has
had, or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
6.11 Tax Returns and Payments. The Parent Borrower and its
Subsidiaries (i) have timely filed with the appropriate taxing authority (taking
into account any applicable extension within which to file) all material income
and other material tax returns, domestic and foreign, required to be filed by
the Parent Borrower and its Subsidiaries, and (ii) have paid all material taxes
payable by them which have become due and assessments which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of the Parent Borrower and its
Subsidiaries and for which adequate reserves have been established in accordance
with GAAP and there is no action, suit, proceeding, investigation, audit or
claim now pending or, to the best knowledge of the Parent Borrower or any of its
Subsidiaries, proposed or threatened by any authority regarding taxes relating
to the Parent Borrower or any of its Subsidiaries. Neither the Parent Borrower
nor any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Parent
Borrower or any of its Subsidiaries. No tax Liens have been filed and no claims
are pending or, to the best knowledge of the Parent Borrower or any of its
Subsidiaries, proposed or threatened with respect to any taxes, fees or other
charges for any taxable period.
6.12 Compliance with ERISA. (a) The Parent Borrower and its
Subsidiaries and ERISA Affiliates have fulfilled their respective obligations
under the minimum funding standards of ERISA and the Code with respect to each
Plan and are in compliance with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or any Plan or Multiemployer
Plan (other than to make contributions in the ordinary course of business).
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(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Parent Borrower nor any of its
Subsidiaries has incurred any material obligation in connection with the
termination of, or withdrawal from, any Foreign Pension Plan. The present value
of the accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan, determined as of the end of the Parent Borrower's most recently
ended fiscal year on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
6.13 Subsidiaries. (a) Set forth in Annex III is a complete
and correct list of all of the Subsidiaries of the Parent Borrower as of the
Effective Date, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding direct ownership
interests in such Subsidiary and (iii) the percentage of ownership of such
Subsidiary represented by such ownership interests. Except as disclosed in Annex
III, each of the Parent Borrower and its Subsidiaries owns, free and clear of
Liens, and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Annex III.
(b) There are no restrictions on the Parent Borrower or any of
its Subsidiaries which prohibit or otherwise restrict the transfer of cash or
other assets from any Subsidiary of the Parent Borrower to the Parent Borrower,
other than (i) prohibitions or restrictions existing under or by reason of this
Agreement, the other Credit Documents or the Three Year Term Loan Documents,
(ii) prohibitions or restrictions existing under or by reason of Legal
Requirements, and (iii) other prohibitions or restrictions which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
6.14 Capitalization. As of the Effective Date, the authorized
capital stock of the Parent Borrower consists of (i) 120,000,000 shares, $1.00
par value per share, of which 11,540,737 Ordinary Shares and 187,763 Class A
Shares are issued and outstanding. As of the Effective Date, all such
outstanding shares of the Parent Borrower have been duly and validly issued and
are fully paid and nonassessable. As of the Effective Date, neither the Parent
Borrower nor any of its Subsidiaries has outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock
except for options, warrants and grants outstanding in the aggregate amounts set
forth on Annex IV.
6.15 Indebtedness. The Parent Borrower and its Subsidiaries do
not have any Indebtedness on the Effective Date other than (i) the Obligations,
(ii) the obligations under the Three Year Term Loan Documents, (iii) the
Indebtedness listed on Annex V and (iv) Indebtedness (on an individual basis)
which has an outstanding principal balance of less than $1,000,000.
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6.16 Compliance with Statutes, etc. The Parent Borrower and
each of its Subsidiaries is in compliance with all applicable statutes,
regulations, rules and orders of, and all applicable restrictions imposed by,
and has filed or otherwise provided all material reports, data, registrations,
filings, applications and other information required to be filed with or
otherwise provided to, all governmental bodies, domestic or foreign, in respect
of the conduct of its business and the ownership of its property (including
compliance with all applicable environmental laws), except where the failure to
comply or file would not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect. All required regulatory approvals
are in full force and effect on the date hereof, except where the failure of
such approvals to be in full force and effect would not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.
6.17 Insurance Licenses. Annex VI lists with respect to each
Regulated Insurance Company, as of the Effective Date, all of the jurisdictions
in which such Regulated Insurance Company holds licenses (including, without
limitation, licenses or certificates of authority from Applicable Insurance
Regulatory Authorities), permits or authorizations to transact insurance and
reinsurance business (collectively, the "Insurance Licenses"), and indicates the
type or types of insurance in which each such Regulated Insurance Company is
permitted to be engaged with respect to each Insurance License therein listed.
There is (i) no such Insurance License that is the subject of a proceeding for
suspension, revocation or limitation or any similar proceedings, (ii) no
sustainable basis for such a suspension, revocation or limitation, and (iii) no
such suspension, revocation or limitation threatened by any Applicable Insurance
Regulatory Authority, that, in each instance under (i), (ii) and (iii) above,
has had, or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. No Regulated Insurance Company transacts
any insurance business, directly or indirectly, in any jurisdiction other than
those listed on Annex VI, where such business requires any Insurance License of
an Applicable Insurance Regulatory Authority or such jurisdiction.
6.18 Insurance Business. All insurance policies issued by any
Regulated Insurance Company are, to the extent required under Applicable Law, on
forms approved by the insurance regulatory authorities of the jurisdiction where
issued or have been filed with and not objected to by such authorities within
the period provided for objection, except for those forms with respect to which
a failure to obtain such approval or make such a filing without it being
objected to, would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.
6.19 Reinsurance Agreements. There are no material liabilities
outstanding as of the Effective Date under any Reinsurance Agreement to which a
Regulated Insurance Company is the ceding party. Each Reinsurance Agreement to
which a Regulated Insurance Company is the ceding party is in full force and
effect on the Effective Date.
6.20 The Transaction. At the time of consummation thereof, the
Transaction was (or will be) consummated in all material respects in accordance
with the terms of the relevant Documents therefor and all applicable laws. At
the time of consummation thereof, all material consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Transaction in accordance with the terms of the relevant
Documents therefor
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and all applicable laws have been (or will be) obtained, given, filed or taken
and are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon any element
of the Transaction or the performance by the Parent Borrower and its
Subsidiaries of their respective obligations under the Documents and all
applicable laws. All actions taken by the Parent Borrower and its Subsidiaries
pursuant to or in furtherance of the Transaction have been (and will be) taken
in all material respects in compliance with the respective Documents and
applicable laws.
SECTION 7. Affirmative Covenants. The Borrowers hereby
covenant and agree that on and as of the Effective Date and thereafter, for so
long as this Agreement is in effect and until the Commitments have terminated,
no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than indemnities
described in Section 12.12 which are not then owing) incurred hereunder, are
paid in full:
7.01 Information Covenants. The Parent Borrower will furnish
to each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the close of each fiscal year of the Parent
Borrower, the consolidated balance sheet of the Parent Borrower and its
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income, operations, changes in stockholders' equity and cash flows
of the Parent Borrower and its Subsidiaries for such fiscal year, setting forth
in comparative form the consolidated figures for the previous fiscal year, all
in reasonable detail and accompanied by a report thereon of Ernst & Young LLP or
other independent public accountants of recognized national standing selected by
the Parent Borrower, which report shall state that such consolidated financial
statements present fairly the consolidated financial position of each of the
Parent Borrower and its Subsidiaries as at the dates indicated and the
consolidated results of its operations and cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years (except
as otherwise specified in such report; provided any exceptions or qualifications
thereto must be acceptable to the Required Lenders) and that the audit by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards.
(b) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Parent Borrower, consolidated
balance sheets of each of the Parent Borrower and its Subsidiaries as at the end
of such period and the related consolidated statements of income, changes in
stockholders' equity and cash flows of the Parent Borrower and its Subsidiaries
for such period and (in the case of the second and third quarterly periods) for
the period from the beginning of the current fiscal year to the end of such
quarterly period, setting forth in each case in comparative form the
consolidated figures for the corresponding periods of the previous fiscal year,
all in reasonable detail and certified by the Chief Financial Officer of the
Parent Borrower as presenting fairly, in accordance with GAAP (except as
specifically set forth therein; provided
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any exceptions or qualifications thereto must be acceptable to the Required
Lenders) on a basis consistent with such prior fiscal periods, the information
contained therein, subject to changes resulting from normal year-end audit
adjustments;
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and 7.01(b), a certificate
of the Chief Financial Officer of the Parent Borrower to the effect that no
Default or Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate shall set
forth (i) the calculations required to establish whether the Parent Borrower and
its Subsidiaries were in compliance with the provisions of Sections 8.09, 8.10
and 8.11, inclusive, as at the end of such fiscal year or quarter, as the case
may be, and (ii) if delivered with the financial statements required by Section
7.01(a), the Consolidated Tangible Net Worth on such Financial Statement
Delivery Date.
(d) Notice of Default or Litigation. (x) Within five Business
Days after any Borrower becomes aware of the occurrence of any Default and/or
any event or condition constituting, or which would reasonably be expected to
have a Material Adverse Effect, a certificate of an Authorized Officer of each
Borrower setting forth the details thereof and the actions which the Borrowers
are taking or proposes to take with respect thereto and (y) promptly after any
Borrower knows of the commencement thereof, notice, of any litigation, dispute
or proceeding involving a claim against the Parent Borrower and/or any
Subsidiary which claim would reasonably be expected to have a Material Adverse
Effect.
(e) Other Statements and Reports. Promptly upon the mailing
thereof to the security holders of the Parent Borrower generally, copies of all
financial statements, reports and proxy statements so mailed.
(f) SEC Filings. Promptly upon the filing thereof, copies of
all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual, quarterly or
monthly reports which the Parent Borrower shall have filed with the SEC or any
national securities exchange.
(g) Insurance Reports and Filings. (i) Promptly after the
filing thereof, a copy of each Statutory Statement filed by each Regulated
Insurance Company.
(ii) Promptly following the delivery or receipt, as the case
may be, by any Regulated Insurance Company or any of their respective
Subsidiaries, copies of (a) each material registration, filing or submission
made by or on behalf of any Regulated Insurance Company with any Applicable
Insurance Regulatory Authority, except for policy form filings, (b) each
material examination and/or audit report or other submitted to any Regulated
Insurance Company by any Applicable Insurance Regulatory Authority, (c) all
material information which the Lenders may from time to time request with
respect to the nature or status of any material deficiencies or violations
reflected in any examination report or other similar report, and (d) each
material report, order, direction, instruction, approval, authorization, license
or other notice which any Borrower or any Regulated Insurance Company may at any
time receive from any Applicable Insurance Regulatory Authority.
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(iii) As soon as available and in any event within 120 days
after the end of each fiscal year of the Parent Borrower, a report by an
independent actuarial consulting firm of recognized national standing reviewing
the adequacy of loss and loss adjustment expense reserves as at the end of the
last fiscal year of each Regulated Insurance Company, determined in accordance
with SAP, and stating an estimated amount of minimum reserves, it being agreed
that in each case such independent firm will be provided access to or copies of
all relevant valuations relating to the insurance business of each such
Regulated Insurance Company in the possession of or available to the Parent
Borrower or its Subsidiaries.
(iv) Promptly following notification thereof from a
Governmental Authority, notification of the suspension, limitation, termination
or non-renewal of, or the taking of any other action in respect of, any
Insurance License.
(h) Other Information. With reasonable promptness, such other
information or existing documents (financial or otherwise) as the Administrative
Agent or any Lender may reasonably request from time to time.
7.02 Books, Records and Inspections. The Borrowers will (i)
keep, and will cause each of their respective Subsidiaries to keep, proper books
of record and account in which full, true and correct entries in conformity with
GAAP or SAP, as applicable, shall be made of all dealings and transactions in
relation to its business and activities; and (ii) subject to Section 12.14,
permit, and will cause each of their respective Subsidiaries to permit,
representatives of any Lender at such Lender's expense prior to the occurrence
and during the continuance of an Event of Default and at the Borrowers' expense
after the occurrence of an Event of Default to visit and inspect any of their
respective properties, to examine their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants. The Borrowers agree to
cooperate and assist in such visits and inspections, in each case at such
reasonable times and as often as may reasonably be desired.
7.03 Insurance. Each Borrower will maintain, and will cause
each of its Subsidiaries to maintain (either in the name of such Borrower or in
such Subsidiary's own name) with financially sound and reputable insurance
companies, insurance on all their property in at least such amounts and against
at least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar businesses.
7.04 Payment of Taxes. Each Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, in each case, on a
timely basis prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a Lien or charge upon any properties of
such Borrower or any of its Subsidiaries; provided that, neither any Borrower
nor any Subsidiary of any Borrower shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
in accordance with GAAP.
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7.05 Maintenance of Existence. Each Borrower shall maintain,
and shall cause each of its Subsidiaries to maintain, its existence and carry on
its business in substantially the same manner and in substantially the same
fields as such business is now carried on and maintained. Each Borrower will
qualify and remain qualified, and cause each of its Subsidiaries to qualify and
remain qualified, as a foreign corporation in each jurisdiction, except these
jurisdictions in which the failure to receive or retain such qualifications
would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
7.06 Compliance with Statutes, etc. The Borrowers will, and
will cause each Subsidiary to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls) other than
those the non-compliance with which would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
7.07 ERISA. As soon as possible and, in any event, within (10)
days after the Parent Borrower, any of its Subsidiaries or any of its ERISA
Affiliates knows or has reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan or Foreign
Pension Plan have occurred or exist, a certificate of the Chief Financial
Officer of the Parent Borrower setting forth details respecting such event or
condition and the action if any, that the Parent Borrower, such Subsidiary or
such ERISA Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC or an applicable
foreign governmental agency by the Parent Borrower, such Subsidiary or such
ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in subsections (c)(1),
(2), (5) and (6), and subsection (d)(2) of Section 4043 of ERISA and
the regulations issued thereunder, with respect to a Plan;
(ii) the filing under Section 4041(c) of ERISA of a notice of
intent to terminate any Plan under a distress termination or the
distress termination of any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by the Parent Borrower, any of
its Subsidiaries or any of its ERISA Affiliates of a notice from a
Multiemployer Plan that such action has been taken by PBGC with respect
to such Multiemployer Plan;
(iv) the receipt by the Parent Borrower, any of its
Subsidiaries or any of its ERISA Affiliates of notice from a
Multiemployer Plan that the Parent Borrower, any of its Subsidiaries or
any of its ERISA Affiliates has incurred withdrawal liability under
Section 4201 of ERISA in excess of $5,000,000 or that such
Multiemployer Plan is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA whereby a deficiency or
additional assessment is levied or threatened to be levied against a
Borrower, any of its Subsidiaries or any of its ERISA Affiliates;
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(v) the institution of a proceeding by a fiduciary of any Plan
or Multiemployer Plan against the Parent Borrower, any of its
Subsidiaries or any of its ERISA Affiliates to enforce Section 515 or
4219(c)(5) of ERISA, which proceeding is not dismissed within 30 days;
and
(vi) that any material contribution required to be made with
respect to a Foreign Pension Plan has not been timely made, or that the
Parent Borrower or any Subsidiary of the Parent Borrower may incur any
material liability pursuant to any Foreign Pension Plan.
7.08 Maintenance of Property. Each Borrower shall, and will
cause each of its Subsidiaries to, maintain all of their properties and assets
in good condition, repair and working order, ordinary wear and tear excepted,
except where failure to maintain the same would not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
7.09 Maintenance of Licenses and Permits. Each Borrower will,
and will cause each of its Subsidiaries to, maintain all permits, licenses and
consents as may be required for the conduct of its business by any state,
federal or local government agency or instrumentality, except where failure to
maintain the same would not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
7.10 Claims Paying Ratings. The Borrowers shall cause each
Regulated Insurance Company which has a claims paying rating from A.M. Best Co.
(or its successor) to maintain at all times a claims-paying rating of at least
"B++" from A.M. Best & Co. (or its successor).
7.11 End of Fiscal Years; Fiscal Quarters. The Parent Borrower
will cause (i) each of its, and each of its Subsidiaries', fiscal years to end
on December 31 of each year and (ii) each of its, and each of its Subsidiaries',
fiscal quarters to end on dates which are consistent with a fiscal year end as
described above.
SECTION 8. Negative Covenants. The Borrowers hereby covenant
and agree that on and as of the Effective Date and thereafter, for so long as
this Agreement is in effect and until the Commitments have terminated, no
Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings
together with interest, Fees and all other Obligations (other than indemnities
described in Section 12.12 which are not then owing) incurred hereunder, are
paid in full:
8.01 Changes in Business. The Parent Borrower will not, and
will not permit any of its Subsidiaries to, engage (directly or indirectly) in
any business other than substantially the same lines of business in which they
are engaged on the Effective Date and reasonable extensions thereof and other
businesses that are complimentary or reasonably related thereto.
8.02 Consolidations, Mergers, Sales of Assets and
Acquisitions. (a) The Parent Borrower will not, and will not permit any of its
Subsidiaries to, consolidate or merge with or into any other Person, provided
that (i) any Borrower may merge with another Person if (x) such Borrower is the
corporation surviving such merger (it being understood and agreed that in the
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case of a merger between a Designated Subsidiary Borrower and the Parent
Borrower the survivor corporation of such merger shall be the Parent Borrower)
and (y) immediately after giving effect to such merger, no Default or Event of
Default shall have occurred and be continuing, and (ii) Subsidiaries of the
Parent Borrower may merge with one another (subject, in the case of mergers
involving Designated Subsidiary Borrowers, to compliance with the preceding
clause (i)).
(b) No Borrower will, nor will it permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily (any of the foregoing being referred to
in this Section 8.02(b) as a "Disposition" and any series of related
Dispositions constituting but a single Disposition), any of its properties or
assets, tangible or intangible (including but not limited to sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper or
general intangibles with or without recourse), except (i) to the extent that the
fair market value of the assets affected by any Disposition or Dispositions (as
determined in good faith by the Board of Directors of the Parent Borrower), when
added to the fair market value of the assets affected by any such other
Disposition or Dispositions previously consummated during the same fiscal year
of the Parent Borrower (as determined in good faith by the Board of Directors of
the Parent Borrower), does not constitute more than 10% of the consolidated
assets of the Parent Borrower and its Subsidiaries as of the last day of the
most recently ended fiscal year of the Parent Borrower and (ii) any Subsidiary
of the Parent Borrower may make a Disposition of any of its properties or assets
to the Parent Borrower, ESI or any Wholly-Owned Subsidiary of the Parent
Borrower.
(c) No Borrower will, nor will it permit any of its
Subsidiaries to, acquire all or substantially all of the capital stock or assets
of another Person unless at such time and immediately after giving effect
thereto no Default or Event of Default exists or would result therefrom.
8.03 Liens. Neither the Parent Borrower nor any of its
Subsidiaries will permit, create, assume, incur or suffer to exist any Lien on
any asset tangible or intangible now owned or hereafter acquired by it, except:
(a) Liens existing on the date hereof and listed on Annex VII
hereto;
(b) Liens not securing Indebtedness which are incurred in the
ordinary course of business;
(c) Liens securing repurchase agreements constituting a
borrowing of funds by the Parent Borrower or any Subsidiary of the
Parent Borrower in the ordinary course of business for liquidity
purposes and in no event for a period exceeding 90 days in each case;
(d) Liens arising pursuant to purchase money mortgages,
capital leases or security interests securing Indebtedness representing
the purchase price (or financing of the purchase price within 90 days
after the respective purchase) of assets acquired after the Effective
Date;
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(e) Liens on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Parent Borrower or
any of its Subsidiaries and not created in contemplation of such event;
(f) Liens arising out of the refinancing, extension, renewal
or refunding of any Indebtedness secured by any Lien permitted by any
of the clauses of this Section 8.03, provided that such Indebtedness is
not increased and is not secured by any additional assets;
(g) Liens securing obligations owed by the Parent Borrower to
any of its Subsidiaries or owed by any Subsidiary of the Parent
Borrower to the Parent Borrower or any Subsidiary of the Parent
Borrower, in each case solely to the extent that such Liens are
required by an Applicable Insurance Regulatory Authority for such
Person to maintain such obligations;
(h) Liens on investments and cash balances of any Regulated
Insurance Company securing obligations of such Regulated Insurance
Company in respect of trust arrangements formed in the ordinary course
of business for the benefit of cedents to secure reinsurance
recoverables owed to them by such Regulated Insurance Company; and
(i) Liens not otherwise permitted by the foregoing clauses of
this Section 8.03 securing Indebtedness in an aggregate principal
amount not at any time exceeding 10% of Consolidated Tangible Net
Worth.
8.04 Indebtedness. (a) The Parent Borrower will not, create,
incur, assume or permit to exist any Indebtedness, or agree, become or remain
liable (contingent or otherwise) to do any of the foregoing, except for the
Obligations, the obligations under the Three-Year Term Loan Documents and other
Indebtedness which is either pari passu with, or subordinated in right of
payment to, the Obligations.
(b) The Parent Borrower will not permit any of its
Subsidiaries to create, incur, assume or permit to exist any Indebtedness, or
agree, become or remain liable (contingent or otherwise) to do any of the
foregoing, except for the Obligations.
8.05 Issuance of Stock. The Parent Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly issue, sell,
assign, pledge, or otherwise encumber or dispose of any shares of its preferred
or preference equity securities or options to acquire preferred or preference
equity securities, except the issuance of preferred or preference equity
securities, so long as (x) no part of such preferred or preference equity
securities is mandatorily redeemable (whether on a scheduled basis or as a
result of the occurrence of any event or circumstance) prior to the first
anniversary of the final scheduled maturity date under the Three-Year Term Loan
Agreement and (y) such preferred or preference equity securities do not contain
any financial performance related covenants or incurrence covenants which
restrict the operations of the issuer thereof.
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8.06 Dissolution. No Borrower shall suffer or permit
dissolution or liquidation either in whole or in part, except through corporate
reorganization to the extent permitted by Section 8.02.
8.07 Restricted Payments. The Parent Borrower will not declare
or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return any
capital to its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests, obligations
or securities to its stockholders, partners or members (or the equivalent
Persons thereof) as such, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in the
Parent Borrower or to issue or sell any Equity Interests therein, if, in any
case referred to above, a Default or Event of Default shall have occurred and be
continuing at the time of such action or would result therefrom.
8.08 Transactions with Affiliates. Neither the Parent Borrower
nor any of its Subsidiaries shall enter into or be a party to, a transaction
with any Affiliate of the Parent Borrower or such Subsidiary (which Affiliate is
not the Parent Borrower or a Subsidiary), except transactions with Affiliates in
good faith in the ordinary course of business consistent with past practice and
on terms no less favorable to the Parent Borrower or such Subsidiary than those
that could have been obtained in a comparable transaction on an arm's length
basis from an unrelated Person.
8.09 Maximum Leverage Ratio. The Parent Borrower will not
permit the Leverage Ratio at any time to be greater than 0.35:1.00.
8.10 Minimum Consolidated Tangible Net Worth. The Parent
Borrower will not permit Consolidated Tangible Net Worth to be less than
$750,000,000 at any time.
8.11 Minimum Consolidated Fixed Charge Coverage Ratio. The
Parent Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for
any Test Period ending on the last day of any fiscal quarter of the Parent
Borrower to be less than 2:00.1:00.
8.12 Private Act. No Borrower will become subject to a Private
Act.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. Any Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note, (ii) default, and such
default shall continue for three or more Business Days, in the payment when due
of any interest on any Loan or any Note or any Fees or (iii) default in the
prompt payment following notice or demand in respect of any other amounts owing
hereunder or under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
material statement made or deemed made by any Borrower herein or in any other
Credit Document or in any certificate or material statement delivered or
required to be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
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9.03 Covenants. Any Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.01(d), 7.02(ii), 7.05, 7.08, 7.10 or Section 8, or (b) default in the
due performance or observance by it of any term, covenant or agreement (other
than those referred to in Section 9.01 or clause (a) of this Section 9.03)
contained in this Agreement and such default shall continue unremedied for a
period of at least 45 days; or
9.04 Default Under Other Agreements. (a) The Parent Borrower
or any of its Subsidiaries shall (i) default in any payment with respect to
Indebtedness (other than the Obligations) in excess of $10,000,000 individually
or in the aggregate, for the Parent Borrower and its Subsidiaries, beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice of acceleration, or any
lapse of time prior to the effectiveness of any notice of acceleration, is
required), any such Indebtedness to become due prior to its stated maturity; or
(b) Indebtedness of the Parent Borrower or its Subsidiaries in excess of
$10,000,000 shall be declared to be due and payable other than in accordance
with the terms of such Indebtedness or required to be prepaid, other than by a
regularly scheduled required prepayment or as a mandatory prepayment (unless
such required prepayment or mandatory prepayment results from a default
thereunder or an event of the type that constitutes an Event of Default), prior
to the stated maturity thereof; or
9.05 Bankruptcy, etc. The Parent Borrower or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Parent Borrower or any of its Subsidiaries and the
petition is not controverted within 10 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Parent Borrower or any of its Subsidiaries; or the Parent
Borrower or any of its Subsidiaries commences (including by way of applying for
or consenting to the appointment of, or the taking of possession by, a
rehabilitator, receiver, custodian, trustee, conservator or liquidator
(collectively, a "conservator") of itself or all or any substantial portion of
its property) any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency, liquidation,
rehabilitation, supervision, conservatorship or similar law of any jurisdiction
or the Bermuda Companies Law whether now or hereafter in effect relating to the
Parent Borrower or any of its Subsidiaries; or any such proceeding is commenced
against (a) any Regulated Insurance Company which is engaged in the business of
underwriting insurance and/or reinsurance in the United States, or (b) the
Parent Borrower or any of its Subsidiaries (other than (x) any Regulated
Insurance Company described in the immediately preceding clause (a)) to the
extent such proceeding is consented to by such Person, and in the case of either
clause (a) or (b) remains undismissed for a period of 60 days; or the Parent
Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or (a) any Regulated Insurance Company which is engaged in the
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business of underwriting insurance and/or reinsurance in the United States
suffers any appointment of any conservator or the like for it or any substantial
part of its property, or (b) the Parent Borrower or any of its Subsidiaries
(other than any Regulated Insurance Company described in the immediately
preceding clause (a)) suffers any appointment of any conservator or the like for
it or any substantial part of its property which continues undischarged or
unstayed for a period of 60 days; or the Parent Borrower or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Parent Borrower or any of its Subsidiaries for
the purpose of effecting any of the foregoing; or
9.06 ERISA. An event or condition specified in Section 7.07
shall occur or exist with respect to any Plan or Multiemployer Plan or Foreign
Pension Plan, a Borrower, any of its Subsidiaries or any of its ERISA Affiliates
shall fail to pay when due any material amount which they shall have become
liable to pay to the PBGC or to a Plan or a Multiemployer Plan under Title IV of
ERISA, or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Plan must be terminated, and as a
result of such event or condition, together with all such other events or
conditions, the Parent Borrower, any of its Subsidiaries or any of its ERISA
Affiliates shall be reasonably likely in the opinion of the general counsel of
such Borrower to incur a liability to a Plan, a Multiemployer Plan, a Foreign
Pension Plan or PBGC (or any combination of the foregoing); or
9.07 Judgments. One or more judgments or decrees shall be
entered against the Parent Borrower or any of its Subsidiaries involving a
liability, net of undisputed reinsurance, of $10,000,000 or more in the case of
any one such judgment or decree or in the aggregate for all such judgments and
decrees for the Parent Borrower and its Subsidiaries and any such judgments or
decrees shall not have been vacated, discharged, satisfied, stayed or bonded
pending appeal within 60 days from the entry thereof; or
9.08 Insurance Licenses. Any one or more Insurance Licenses of
the Parent Borrower or any of its Subsidiaries shall be suspended, limited or
terminated or shall not be renewed, or any other action shall be taken by any
Governmental Authority, and such action would reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect; or
9.09 Parent Borrower Guaranty. The Parent Borrower Guaranty
shall terminate or cease, in whole or part, to be a legally valid and binding
obligation of the Parent Borrower, or the Parent Borrower, or any Person acting
for or on behalf of the Parent Borrower, shall contest such validity or binding
nature of the Parent Borrower Guaranty, or any other Person shall assert any of
the foregoing; or
9.10 Ownership. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Parent Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Borrower,
except as otherwise specifically provided for in this Agreement (provided that
if an Event of Default specified in Section 9.05 shall occur with respect to any
Borrower, the result
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which would occur upon the giving of written notice by the Administrative Agent
as specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment terminated,
whereupon the Commitment of each Lender shall forthwith terminate immediately
and any Facility Fees and Utilization Fees shall forthwith become due and
payable without any other notice of any kind, (ii) declare the principal of, and
any accrued interest in respect of, all Loans and all Obligations owing
hereunder and under the other Credit Documents to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower, (iii)
terminate any Letter of Credit or give a Notice of Non-Extension in respect
thereof if permitted in accordance with its terms, and (iv) direct the
applicable Borrower to pay (and the applicable Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05, to pay) to the Administrative Agent at the Payment Office an
amount of cash to be held as security for the respective Borrower's
reimbursement obligations in respect of all Letters of Credit then outstanding
which were issued for the account of such Borrower, equal to the aggregate
Stated Amount of all such Letters of Credit at such time. Notwithstanding the
foregoing, the Administrative Agent shall have available to it all other
remedies at law or equity, and shall exercise any one or all of them at the
request of the Required Lenders.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Additional Tranche 1 Commitment" shall mean, for each
Additional Tranche 1 Lender, any commitment provided by such Additional Tranche
1 Lender pursuant to Section 1.15, in such amount as agreed to by such
Additional Tranche 1 Lender in the respective Additional Tranche 1 Commitment
Agreement; provided that on the Additional Tranche 1 Commitment Date upon which
an Additional Tranche 1 Commitment of any Additional Tranche 1 Lender becomes
effective, such Additional Tranche 1 Commitment of such Additional Tranche 1
Lender shall (x) in the case of an existing Tranche 1 Lender be added to (and
thereafter become a part of) the existing Tranche 1 Commitment of such existing
Tranche 1 Lender for all purposes of this Agreement as contemplated by Section
1.15 and (y) in the case of a new Tranche 1 Lender, be converted to a Tranche 1
Commitment and become a Tranche 1 Commitment for all purposes of this Agreement
as contemplated by Section 1.15.
"Additional Tranche 1 Commitment Agreement" shall mean an
Additional Tranche 1 Commitment Agreement substantially in the form of Exhibit J
(appropriately completed).
"Additional Tranche 1 Commitment Date" shall mean each date
upon which an Additional Tranche 1 Commitment under an Additional Tranche 1
Commitment Agreement becomes effective as provided in Section 1.15.
"Additional Tranche 1 Lender" shall have the meaning provided
in Section 1.15(b).
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"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person, provided, that a Person shall not be
deemed to be an Affiliate solely as a result of a title or position held by such
Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended and/or supplemented.
"Aon" shall mean, collectively, Combined Specialty
Corporation, Combined Insurance Company of America, Virginia Surety Company,
Inc., Resource Life Insurance Company, London General Insurance Company Limited,
Sterling Life Insurance Company and Combined Life Assurance Company of Europe
Limited.
"Applicable Insurance Regulatory Authority" shall mean, when
used with respect to any Regulated Insurance Company, the insurance department
or similar administrative authority or agency located in (x) each state in which
such Regulated Insurance Company is domiciled or (y) to the extent asserting
regulatory jurisdiction over such Regulated Insurance Company, the insurance
department, authority or agency in each state in which such Regulated Insurance
Company is licensed, and shall include any Federal insurance regulatory
department, authority or agency that may be created and that asserts regulatory
jurisdiction over such Regulated Insurance Company.
"Applicable Margin" shall mean in respect of Revolving Loans,
Term Loans and the Facility Fee for any Margin Adjustment Period, from and after
any Start Date to and including the corresponding End Date, the respective
percentage per annum set forth below opposite the respective Level (i.e., Xxxxx
0, Xxxxx 0, Xxxxx 0 or Level 1, as the case may be) indicated to have been
achieved on the applicable Test Date for such Start Date (as shown in the
respective officer's certificate delivered pursuant to Section 7.01(c) of the
first proviso below):
Revolving Loans Revolving Loans Term Loans Term Loans
Leverage Ratio maintained as maintained as maintained as maintained as
Level Greater than Eurodollar Loans Base Rate Loans Eurodollar Loans Base Rate Loans Facility Fee
----- ------------ ---------------- --------------- ---------------- --------------- ------------
4 0.30 to 1.00 0.850% 0% 1.100% 0.100% 0.150%
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Revolving Loans Revolving Loans Term Loans Term Loans
Leverage Ratio maintained as maintained as maintained as maintained as
Level Greater than Eurodollar Loans Base Rate Loans Eurodollar Loans Base Rate Loans Facility Fee
----- ------------ ---------------- --------------- ---------------- --------------- ------------
3 Greater than
0.20 to 1.00
but less than
or equal to
0.30 to 1.00 0.625% 0% 0.875% 0% 0.125%
2 Greater than
0.10 to 1.00
but less than
or equal to
0.20 to 1.00
0.525% 0% 0.775% 0% 0.100%
1 Less than or
equal to 0.10
to 1.0 0.410% 0% 0.660% 0% 0.090%
; provided, however, that if the Parent Borrower fails to deliver the financial
statements required to be delivered pursuant to Section 7.01(b) or (c)
(accompanied by the officer's certificate required to be delivered pursuant to
Section 7.01(c) showing the applicable Leverage Ratio on the relevant Test Date)
on or prior to the respective date required by such Sections, then Level 4
pricing shall apply until such time, if any, as the financial statements
required as set forth above and the accompanying officer's certificate have been
delivered showing the pricing for the respective Margin Adjustment Period is at
a Level below Level 4 (it being understood that, in the case of any late
delivery of the financial statements and officer's certificate as so required,
any reduction in the Applicable Margin shall apply only from and after the date
of the delivery of the complying financial statements and officer's
certificate); provided, further, that (i) Level 4 pricing shall apply at all
times when any Default or Event of Default is in existence and (ii) Level 2
pricing shall apply for the period from the Effective Date to the date of the
delivery of the Parent Borrower's consolidated financial statements (and related
officer's certificate) in respect of its fiscal quarter ending September 30,
2002.
"Assignment Agreement" shall mean an Assignment Agreement in
the form of Exhibit G (appropriately completed).
"Authorized Officer" shall mean any senior officer of a
Borrower designated as such in writing by such Borrower to, and found acceptable
by, the Administrative Agent.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" at any time shall mean the higher of (x) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate and (y) the
Prime Lending Rate as in effect from time to time.
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"Base Rate Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Bermuda Companies Law" shall mean the Companies Xxx 0000 of
Bermuda and other relevant Bermuda law.
"Borrower" or "Borrowers" shall mean the Parent Borrower, the
Initial Designated Subsidiary Borrowers and each Person which is designated as a
Designated Subsidiary Borrower after the Effective Date in accordance with
Section 1.14. For the purposes of Sections 5, 6, 7, 8 and 9 (including the
defined terms used therein) any reference to "Borrower" or "Borrowers" shall
also mean, and include, the Parent Borrower in its capacity as guarantor under
Section 13.
"Borrowing" shall mean the incurrence of one Type of Loan
hereunder by the Parent Borrower from all of the Lenders on a pro rata basis on
a given date (or resulting from a conversion or conversions on such date),
having in the case of Eurodollar Loans the same Interest Period, provided that
Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of
any related Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day, excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close, and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Optimization" shall mean the return of up to
$200,000,000 of capital to the shareholders of the Parent Borrower either
through (x) the declaration of a dividend or (y) the repurchase of certain of
its outstanding equity interests held by its existing shareholders.
"Capital Optimization Documents" shall mean all documents
executed and delivered with respect to the Capital Optimization, as in effect on
the Effective Date and as the same may be modified, supplemented, restated
and/or amended from time to time in accordance with the terms hereof and
thereof.
"Capital Z Partners" shall mean, collectively, Capital Z
Financial Services Fund II, L.P. and Capital Z Financial Services Private Fund
II, L.P.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than one year from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any State thereof, the District of Columbia or any foreign
jurisdiction having capital, surplus and undivided profits aggregating in excess
of $200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days
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for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (ii) above,
(iv) commercial paper issued by any Person incorporated in the United States
rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Xxxxx'x and in each case maturing not more than one year
after the date of acquisition by such Person, (v) investments in money market
funds substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
"Change of Control" shall mean the occurrence of any of the
following events or conditions: (a) any Person or group of Persons (as used in
Sections 13 and 14 of the Securities Exchange Act of 1934, and the rules and
regulations thereunder), other than one or more Initial Lead Investors and their
respective affiliates, shall have become the beneficial owner (as defined in
rules promulgated by the SEC) of more than 35% of the voting securities of the
Parent Borrower; (b) a majority of the members of the Parent Borrower's board of
directors are persons who are then serving on the board of directors without
having been elected by the board of directors or having been nominated for
election by its shareholders; (c) the Initial Lead Investors (together with
their respective affiliates), on an aggregate basis, shall cease to own at least
a majority of the voting securities of the Parent Borrower owned by the Initial
Lead Investors (together with their respective affiliates), on an aggregate
basis, on the Effective Date; or (d) any three or more of the Initial Lead
Investors (together with their respective affiliates), on an individual basis,
shall cease to own at least a majority of the voting securities of the Parent
Borrower owned by such Initial Lead Investor (together with its affiliates), on
an individual basis, on the Effective Date.
"Claims" shall have the meaning provided in Section 12.01.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Commitment" shall mean, collectively, the Tranche 1
Commitments and the Tranche 2 Commitments.
"Commitment Expiration Date" shall mean August 11, 2003 .
"Consolidated Fixed Charge Coverage Ratio" for any period
shall mean the ratio of (i) the remainder of (x) the aggregate amount of
dividends which the Regulated Insurance Companies are permitted to pay to the
Parent Borrower under Legal Requirements during such period (determined as if
such Regulated Insurance Companies had not paid any such dividends during such
period) minus (y) the aggregate amount of dividends paid by the Parent Borrower
to its shareholders during such period, to (ii) Consolidated Fixed Charges for
such period.
"Consolidated Fixed Charges" for any period shall mean, with
respect to the Parent Borrower and its Subsidiaries determined on a consolidated
basis, the sum, without duplication, of (i) the aggregate amount of cash
interest expense incurred by such Persons during
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such period and (ii) the aggregate amount of all scheduled repayments of
Indebtedness of such Persons required to be made during such period.
"Consolidated Indebtedness" shall mean, as of any date of
determination, (i) all Indebtedness for borrowed money of the Parent Borrower
and its Subsidiaries at such time determined on a consolidated basis in
accordance with GAAP plus (ii) any Indebtedness for borrowed money of any other
Person as to which the Parent Borrower and/or any of its Subsidiaries has
created a guarantee or other Contingent Obligation (but only to the extent of
such guarantee or other Contingent Obligation). For the avoidance of doubt,
"Consolidated Indebtedness" shall not include any contingent obligations of any
Person under or in connection with letters of credit or similar facilities so
long as no drawings or payments have been made in respect thereof.
"Consolidated Net Worth" shall mean, as of any date of
determination, the Net Worth of the Parent Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP after appropriate
deduction for any minority interests in Subsidiaries.
"Consolidated Tangible Net Worth" shall mean, as of the date
of any determination, Consolidated Net Worth of the Parent Borrower and its
Subsidiaries on such date less the amount of all intangible items included
therein, including, without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks, brand names and write-ups of
assets.
"Consolidated Total Capital" shall mean, as of any date of
determination, the sum of (i) Consolidated Indebtedness and (ii) Consolidated
Net Worth at such time.
"Contingent Obligations" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include (x)
endorsements of instruments for deposit or collection in the ordinary course of
business or (y) obligations of any Regulated Insurance Company under Insurance
Contracts, Reinsurance Agreements or Retrocession Agreements. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
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"Credit Documents" shall mean this Agreement, the Notes, each
Assignment Agreement, each DSB Assumption Agreement and all other documents,
instruments and agreements entered into in connection herewith or therewith.
"Default" shall mean any event, act or condition which, with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to
which a Lender Default is in effect.
"Designated Subsidiary Borrower" shall mean (x) ESI and (y)
each Person which is designated as a Designated Subsidiary Borrower after the
Effective Date in accordance with Section 1.14.
"Dispositions" shall have the meaning provided in Section
8.02(b).
"Documents" shall mean, collectively, (i) the Credit
Documents, (ii) the Three-Year Term Loan Documents and (iii) the Capital
Optimization Documents.
"Dollar" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"DSB Assumption Agreement" shall mean an assumption agreement
in the form of Exhibit H.
"Effective Date" shall have the meaning provided in Section
5.01.
"End Date" shall mean, with respect to any Margin Adjustment
Period, the last day of such Margin Adjustment Period.
"Equity Interests" shall mean, with respect to any Person,
shares of capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as the Parent Borrower or any of its
Subsidiaries or is under common control (within the meaning of Section 414(c) of
the Code) with the Parent Borrower or any of its Subsidiaries.
"ESI" shall mean Endurance Specialty Insurance Ltd., a company
organized under the laws of Bermuda.
"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean, with respect to each Interest
Period for a Eurodollar Loan, (i) the rate per annum that appears on page 3750
of the Dow Xxxxx Telerate Screen (or any successor page) for Dollar deposits
with maturities comparable to such Interest Period as of 11:00 A.M. (London
time) on the date which is two Business Days prior to the commencement of such
Interest Period or, if such a rate does not appear on page 3750 of the Dow Xxxxx
Telerate Screen (or any successor page), the offered quotations to first-class
banks in the London interbank market by JPMorgan Chase Bank for Dollar deposits
of amounts in same day funds comparable to the outstanding principal amount of
such Dollar denominated Loan with maturities comparable to such Interest Period
determined as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period divided (and rounded upward to
the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Expiration Date" shall mean August 23, 2002.
"Facility Fees" shall mean, collectively, the Tranche 1
Facility Fee and the Tranche 2 Facility Fee.
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected in good faith by the
Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Final Maturity Date" shall mean August 11, 2004.
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"Financial Statement Delivery Date" shall mean each date upon
which the respective officer's certificate is delivered pursuant to Section
7.01(c) (together with the related financial statements pursuant to Section
7.01(a)).
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the Parent
Borrower or any one or more of its Subsidiaries primarily for the benefit of
employees of the Parent Borrower or such Subsidiaries residing outside the
United States of America, which plan, fund or other similar program provides, or
results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.
"GAAP" shall mean generally accepted accounting principles in
the United States of America; it being understood and agreed that determinations
in accordance with GAAP for purposes of Section 8, including defined terms as
used therein, are subject (to the extent provided therein) to Section 12.07(a).
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including any Applicable Insurance Regulatory
Authority.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Lenders and the Issuing Agent.
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services which in accordance with GAAP would be
shown on the liability side of the balance sheet of such Person, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, (v) all capitalized lease
obligations of such Person, (vi) all obligations of such Person under Interest
Rate Protection Agreements and (vii) all Contingent Obligations of such Person
with respect to any of the foregoing; provided that, Indebtedness shall not
include (x) trade payables (including payables under insurance contracts and
reinsurance payables) and accrued expenses, in each case arising in the ordinary
course of business and (y) obligations with respect to Policies.
"Initial Designated Subsidiary Borrower" shall mean that
Designated Subsidiary Borrower set forth in clause (x) of the definition
thereof.
"Initial Lead Investors" shall mean, collectively, Aon,
Zurich, TPG, THLee, Capital Z Partners and Perry Capital.
"Insurance Business" shall mean one or more aspects of the
business of selling, issuing or underwriting insurance or reinsurance.
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"Insurance Contract" shall mean any insurance contract or
policy issued by a Regulated Insurance Company but shall not include any
Reinsurance Agreement or Retrocession Agreement.
"Insurance Licenses" shall have the meaning provided in
Section 6.18.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, the interest period applicable thereto, as determined pursuant to Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Issuing Agent" shall mean JPMorgan Chase Bank.
"Legal Requirements" shall mean all applicable laws, rules and
regulations made by any governmental body or regulatory authority (including,
without limitation, any Applicable Insurance Regulatory Authority) having
jurisdiction over the Parent Borrower or a Subsidiary of the Parent Borrower.
"Lender" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Default" shall mean (i) the refusal (which has not
been retracted) of a Lender to make available its portion of any Borrowing or
(ii) a Lender having notified the Administrative Agent and/or the Parent
Borrower that it does not intend to comply with its obligations under Sections
1.01, 2A or 2B, in the case of either clause (i) or (ii) above as a result of
the appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"Letters of Credit" shall mean, collectively, the Tranche 1
Letters of Credit and the Tranche 2 Letters of Credit.
"Letter of Credit Outstandings" shall mean, collectively, the
Tranche 1 Letter of Credit Outstandings and the Tranche 2 Letter of Credit
Outstandings.
"Letter of Credit Supportable Obligations" shall mean
obligations of the Parent Borrower or any of its Subsidiaries to any other
Person which are permitted to exist pursuant to the terms of this Agreement.
"Leverage Ratio" shall mean the ratio of (i) Consolidated
Indebtedness to (ii) Consolidated Total Capital.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof), or any understanding or agreement to repurchase
any property or assets sold by the Parent Borrower or any of its Subsidiaries
(including sales of accounts receivable or notes with recourse to the Parent
Borrower or any of
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its Subsidiaries), or the assignment of any right to receive income, or the
filing of any financing statement under the UCC or any other similar notice
under any similar recording or notice statute relating to any property.
"Loan" or "Loans" shall mean (i) prior to the Commitment
Expiration Date, each Revolving Loan and (ii) on or after the Commitment
Expiration Date, each Term Loan.
"Margin Adjustment Period" shall mean each period which shall
commence on the date upon which the respective officer's certificate is
delivered pursuant to Section 7.01(c) (together with the related financial
statements pursuant to Section Section 7.01(a) or (b), as the case may be) and
which shall end on the date of actual delivery of the next officer's certificate
pursuant to Section 7.01(c) (and related financial statements) or the latest
date on which such next officer's certificate (and related financial statements)
is required to be so delivered; it being understood that the first Margin
Adjustment Period shall commence with the delivery of the Parent Borrower's
financial statements (and related officer's certificate) in respect of its
fiscal quarter ending September 30, 2002.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean, (i) a material adverse
effect on the business, operations, property or financial condition of the
Parent Borrower and its Subsidiaries taken as a whole or (ii) a material adverse
effect on (x) the rights and remedies of the Administrative Agent or the Lenders
under the Credit Documents, (y) the ability of any Borrower to perform its
obligations under the Credit Documents to which it is a party or (z) the
legality, validity or enforceability of any Credit Document.
"Material Subsidiary" shall mean any Subsidiary of the Parent
Borrower whose total assets or total revenues exceed 10% of the total assets or
gross revenues, respectively, of the Parent Borrower and its Subsidiaries on a
consolidated basis as of the most recent fiscal quarter end and for the most
recent fiscal quarter period, respectively, determined in accordance with GAAP.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean any multiemployer plan as
defined in Section 4001(a)(3) of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of) the Parent Borrower, any
of its Subsidiaries or any of its ERISA Affiliates, and each such plan for the
five year period immediately following the latest date on which the Parent
Borrower, such Subsidiary or such ERISA Affiliate maintained, contributed to or
had an obligation to contribute to such plan.
"NAIC" shall mean the National Association of Insurance
Commissioners.
"Net Worth" shall mean, as to any Person, the sum of its
capital stock (including, without limitation, its preferred stock), capital in
excess of par or stated value of shares of its capital stock (including, without
limitation, its preferred stock), retained earnings and any other account which,
in accordance with GAAP, constitutes stockholders equity, but excluding (i) any
treasury stock and (ii) the effects of Financial Accounting Statement No. 115.
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"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice of Non-Extension" shall have the meaning provided in
Section 2.05.
"Notice Office" shall mean the office of the Administrative
Agent at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxx, Telephone: (000) 000-0000, Facsimile: (000) 000-0000, or such other
office as the Administrative Agent may designate to the Parent Borrower and the
Lenders from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Administrative Agent, the Issuing Agent or any Lender pursuant to
the terms of this Agreement or any other Credit Document.
"Parent Borrower" shall have the meaning provided in the first
paragraph of this Agreement. For the purposes of Sections 5, 6, 7, 8 and 9
(including the defined terms used therein) any reference to "Parent Borrower"
shall also mean, and include, the Parent Borrower in its capacity as a guarantor
under Section 13.
"Parent Borrower Guaranteed Obligations" shall mean all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit
issued for the account of any Designated Subsidiary Borrower, together with all
the other obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of any
Designated Subsidiary Borrower to any Lender, the Administrative Agent and the
Issuing Agent now existing or hereafter incurred under, arising out of or in
connection with, this Agreement and each other Credit Document pursuant to which
any Designated Subsidiary Borrower is a party and the due performance and
compliance by any such Designated Subsidiary Borrower with all the terms,
conditions and agreements contained in this Agreement and each such other Credit
Document.
"Parent Borrower Guaranty" shall mean the guaranty of the
Parent Borrower provided in Section 13.
"Payment Office" shall mean the office of the Administrative
Agent at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxx, Telephone: (000) 000-0000, Facsimile: (000) 000-0000, or such other
office as the Administrative Agent may designate to the Parent Borrower and the
Lenders from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Perry Capital" shall mean, collectively, Perry European Fund,
L.P., Perry European Fund, Ltd., Perry Partners International, Inc. and Perry
Partners, L.P.
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"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA and subject to Title IV of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute of) the Parent Borrower or
any of its Subsidiaries or any of its ERISA Affiliates, and each such plan for
the five year period immediately following the latest date on which the Parent
Borrower, any of its Subsidiaries or any of its ERISA Affiliates maintained,
contributed to or had an obligation to contribute to such plan.
"Policies" shall mean all insurance policies, annuity
contracts, guaranteed interest contracts and funding agreements (including
riders to any such policies or contracts, certificates issued with respect to
group life insurance or annuity contracts and any contracts issued in connection
with retirement plans or arrangements) and assumption certificates issued or to
be issued (or filed pending current review by applicable Governmental
Authorities) by any Regulated Insurance Company and any coinsurance agreements
entered into or to be entered into by any Regulated Insurance Company.
"Prime Lending Rate" shall mean the rate which JPMorgan Chase
Bank announces from time to time as its prime commercial lending rate, the Prime
Lending Rate to change when and as such prime commercial lending rate changes.
The Prime Lending Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. JPMorgan Chase Bank
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate.
"Private Act" shall mean separate legislation enacted in
Bermuda with the intention that such legislation apply specifically to any
Borrower, in whole or in part.
"Register" shall have the meaning provided in Section 12.16.
"Regulated Insurance Company" shall mean any Subsidiary of the
Parent Borrower, whether now owned or hereafter acquired, that is authorized or
admitted to carry on or transact Insurance Business in any jurisdiction and is
regulated by any Applicable Insurance Regulatory Authority.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Reinsurance Agreement" shall mean any agreement, contract,
treaty, certificate or other arrangement whereby any Regulated Insurance Company
agrees to transfer, cede or retrocede to another insurer or reinsurer all or
part of the liability assumed or assets held by such Regulated Insurance Company
under a policy or policies of insurance issued by such Regulated
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Insurance Company or under a reinsurance agreement assumed by such Regulated
Insurance Company.
"Replaced Lender" shall have the meaning provided in Section
1.13.
"Replacement Lender" shall have the meaning provided in
Section 1.13.
"Required Lenders" shall mean, at any time, at least four
Lenders whose Commitments (or, after the Commitments have terminated, the sum of
such Lenders' (x) then outstanding Loans plus (y) Tranche 1 Percentages of the
Tranche 1 Letter of Credit Outstandings at such time plus (z) Tranche 2
Percentages of the Tranche 2 Letter of Credit Outstandings at such time)
represent an amount equal to or greater than 50% of the Total Commitment (or
after the termination thereof, the sum of (x) the then total outstanding Loans
plus (y) the Tranche 1 Letter of Credit Outstandings at such time plus (z) the
Tranche 2 Letter of Credit Outstandings at such time).
"Retrocession Agreement" shall mean any agreement, contract,
treaty or other arrangement whereby one or more insurers or reinsurers, as
retrocessionaires, assume liabilities of reinsurers under a Reinsurance
Agreement or other retrocessionaires under another Retrocession Agreement.
"Revolving Loan" shall have the meaning provided in Section
1.01(a).
"S&P" shall mean Standard & Poor's Ratings Group and its
successors.
"SAP" shall mean, with respect to any Regulated Insurance
Company, the accounting procedures and practices prescribed or permitted by the
Applicable Insurance Regulatory Authority of the state in which such Regulated
Insurance Company is domiciled; it being understood and agreed that
determinations in accordance with SAP for purposes of Section 8, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 12.07(a).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be in effect from
time to time.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Start Date" shall mean, with respect to any Margin Adjustment
Period, the first day of such Margin Adjustment Period.
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (regardless of whether
any conditions for drawing could be met).
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"Statutory Statements" shall mean, with respect to any
Regulated Insurance Company for any fiscal year, the annual or quarterly
financial statements of such Regulated Insurance Company as required to be filed
with the Insurance Regulatory Authority of its jurisdiction of domicile and in
accordance with the laws of such jurisdiction, together with all exhibits,
schedules, certificates and actuarial opinions required to be filed or delivered
therewith.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% voting interest at the time for the board of
directors or equivalent body. Unless otherwise expressly provided, all
references to "Subsidiary" shall mean a Subsidiary of the Parent Borrower.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan Maturity Date" shall mean February 11, 2004.
"Term Loans" shall mean each Revolving Loan that is converted
into a term loan on the Commitment Expiration Date pursuant to Section 1.01(b).
"Test Date" shall mean, with respect to any Start Date, the
last day of the most recent fiscal quarter of the Parent Borrower ended
immediately prior to such Start Date.
"Test Period" shall mean, at any time, each period of four
consecutive fiscal quarters of the Parent Borrower then last ended; provided
that at all times prior to the last day of the Parent Borrower's fiscal quarter
ending on June 30, 2003, "Test Period" shall mean the period from the first day
of the Parent Borrower's fiscal quarter ending on September 30, 2002 to and
including the last day of the Parent Borrower's fiscal quarter then last ended.
"THLee" shall mean, collectively, Xxxxxx X. Xxx (Alternative)
Fund V, L.P., Xxxxxx X. Xxx (Alternative) Parallel Fund V, L.P., Xxxxxx X. Xxx
(Alternative) Cayman Fund V, L.P., Xxxxxx X Xxx Investors Limited Partnership,
State Street Bank and Trust Company, not personally, but solely as Trustee under
the 1997 Xxxxxx X. Xxx Nominee Trust, Xxxxxx Investments Holdings, LLC, Xxxxxx
Investments Employees' Securities Company I LLC and Xxxxxx Investments
Employees' Securities Company II LLC.
"Three-Year Term Loan Agreement" shall mean the Term Loan
Agreement, dated as of the date hereof, among the Parent Borrower, the lenders
party thereto and JPMorgan Chase Bank, as administrative agent, providing for up
to $200,000,000 of term loans to the Parent Borrower.
"Three-Year Term Loan Documents" shall mean the Three-Year
Term Loan Agreement and all other documents, instruments and agreements entered
into in connection therewith.
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"Total Commitment" shall mean the Total Tranche 1 Commitment
plus the Total Tranche 2 Commitment.
"Total Tranche 1 Commitment" shall mean the sum of the Tranche
1 Commitments of each Tranche 1 Lender.
"Total Tranche 2 Commitment" shall mean the sum of the Tranche
2 Commitments of each Tranche 2 Lender.
"Total Unutilized Tranche 1 Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the Total Tranche 1 Commitment
then in effect less (y) the sum of the aggregate principal amount of Revolving
Loans then outstanding and the Tranche 1 Letter of Credit Outstandings at such
time.
"Total Unutilized Tranche 2 Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the Total Tranche 2 Commitment
then in effect less (y) the Tranche 2 Letter of Credit Outstandings at such
time.
"TPG" shall mean, collectively, TPG Endurance Partners
(Cayman), L.P., TPG Endurance Investments (Cayman), L.P. and TPG Dutch Parallel
III, C.V.
"Tranche 1 Commitment" shall mean, with respect to each
Tranche 1 Lender, the amount set forth opposite such Tranche 1 Lender's name on
Annex I hereto under the heading "Tranche 1 Commitment", as the same may be (x)
reduced or terminated pursuant to Sections 3.02, 3.03 and/or 9, (y) increased
from time to time pursuant to Section 1.15 or (z) adjusted from time to time as
a result of assignment to or from such Tranche 1 Lender pursuant to Section
12.04(b).
"Tranche 1 Facility Fee" shall have the meaning provided in
Section 3.01(a).
"Tranche 1 Lenders" shall mean each Lender with a Tranche 1
Commitment, outstanding Loans and/or Tranche 1 Letter of Credit Outstandings.
"Tranche 1 Letter of Credit" shall have the meaning provided
in Section 2A.01(a).
"Tranche 1 Letter of Credit Fee" shall have the meaning
provided in Section 3.01(d).
"Tranche 1 Letter of Credit Outstandings" shall mean, at any
time, the sum of, without duplication (i) the aggregate Stated Amount of all
Tranche 1 Letters of Credit plus (ii) the aggregate amount of all Tranche 1
Unpaid Drawings in respect of all Tranche 1 Letters of Credit.
"Tranche 1 Letter of Credit Request" shall have the meaning
provided in Section 2A.02(a).
"Tranche 1 Percentage" shall mean, at any time for each
Tranche 1 Lender, the percentage obtained by dividing such Tranche 1 Lender's
Tranche 1 Commitment at such time
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by the Total Tranche 1 Commitment then in effect, provided that, if the Total
Tranche 1 Commitment has been terminated, the Tranche 1 Percentage of each
Tranche 1 Lender shall be determined by dividing such Tranche 1 Lender's Tranche
1 Commitment as in effect immediately prior to such termination by the Total
Tranche 1 Commitment as in effect immediately prior to such termination (but
also giving effect to any assignments made in accordance with Section 12.04(b)
after the date on which the Total Tranche 1 Commitment has terminated).
"Tranche 1 Unpaid Drawings" shall have the meaning provided in
Section 2A.03(a).
"Tranche 2 Commitment" shall mean, with respect to each
Tranche 2 Lender, the amount set forth opposite such Tranche 2 Lender's name on
Annex I hereto under the heading "Tranche 2 Commitment", as the same may be (x)
reduced or terminated pursuant to Sections 3.02, 3.03 and/or 9 or (y) adjusted
from time to time as a result of assignment to or from such Tranche 2 Lender
pursuant to Section 12.04(b).
"Tranche 2 Facility Fee" shall have the meaning provided in
Section 3.01(b).
"Tranche 2 Lenders" shall mean each Lender with a Tranche 2
Commitment or with Tranche 2 Letter of Credit Outstandings.
"Tranche 2 Letter of Credit" shall have the meaning provided
in Section 2B.01(a).
"Tranche 2 Letter of Credit Fee" shall have the meaning
provided in Section 3.01(e).
"Tranche 2 Letter of Credit Outstandings" shall mean, at any
time, the sum of, without duplication, (i) the aggregate Stated Amount of all
Tranche 2 Letters of Credit plus (ii) the aggregate amount of all Tranche 2
Unpaid Drawings in respect of all Tranche 2 Letters of Credit.
"Tranche 2 Letter of Credit Request" shall have the meaning
provided in Section 2B.02(a).
"Tranche 2 Percentage" shall mean, at any time for each
Tranche 2 Lender, the percentage obtained by dividing such Tranche 2 Lender's
Tranche 2 Commitment at such time by the Total Tranche 2 Commitment then in
effect, provided that, if the Total Tranche 2 Commitment has been terminated,
the Tranche 2 Percentage of each Tranche 2 Lender shall be determined by
dividing such Tranche 2 Lender's Tranche 2 Commitment as in effect immediately
prior to such termination by the Total Tranche 2 Commitment as in effect
immediately prior to such termination (but also giving effect to any assignments
made in accordance with Section 12.04(b) after the date on which the Total
Tranche 2 Commitment has terminated).
"Transaction" shall mean, collectively, (i) the entering into
of the Credit Documents, (ii) the entering into of the Three-Year Term Loan
Documents, (iii) the consummation of the Capital Optimization and (iv) the
payment of all fees and expenses in connection with the foregoing.
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"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unpaid Drawings" shall mean, collectively, the Tranche 1
Unpaid Drawings and the Tranche 2 Unpaid Drawings.
"U.S. Borrower" shall have the meaning provided in Section
4.04(b).
"Utilization Fee" shall have the meaning provided in Section
3.01(c).
"Wholly-Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person to the extent all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
"Zurich" shall mean, collectively, BG Investments, Ltd.,
Farmers Group, Inc. and Centre Strategic Investments Holdings Limited.
SECTION 11. The Administrative Agent.
11.01 Appointment. Each Lender hereby irrevocably designates
and appoints JPMorgan Chase Bank as Administrative Agent (such term as used in
this Section 11 to include JPMorgan Chase Bank, acting as Issuing Agent under
this Agreement and each Letter of Credit), to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes
JPMorgan Chase Bank as the Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this Section 11. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Credit Documents, nor any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this Section 11 are solely for the
benefit of the Administrative Agent and the Lenders, and no Borrower shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Administrative
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligation or relationship of agency or trust with
or for any Borrower.
11.02 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement or any other Credit Document by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.
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The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision)) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Parent Borrower
or any Subsidiary or any of their respective officers contained in this
Agreement, any other Credit 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 Credit Document
or for any failure of the Parent Borrower or any of its Subsidiaries or any of
their respective officers to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Parent Borrower or any of its Subsidiaries.
The Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of any Borrower to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.04 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order 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, without
limitation, counsel to the Borrowers), 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 under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or 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 and the other Credit
Documents in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
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11.05 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 hereunder unless the Administrative Agent has received notice from a
Lender or a Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders, provided that unless and until
the Administrative Agent shall have received such directions, 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 in the best interests of the Lenders.
11.06 Non-Reliance. Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Parent Borrower or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Parent Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall 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 to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Parent Borrower and its Subsidiaries. The Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial and
other conditions, prospects or creditworthiness of the Parent Borrower or any
Subsidiary which may come into the possession of the Administrative Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.
11.07 Indemnification. Each Lender agrees to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective "percentages" as used in determining the Required Lenders at such
time from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Administrative Agent in its capacity as such
in any way relating to or arising out of this Agreement or any other Credit
Document, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Administrative Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by the Parent Borrower
or any of its Subsidiaries, provided that no Lender shall be liable to the
Administrative Agent for the payment of any portion of such
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liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision). If any indemnity
furnished to the Administrative Agent for any purpose shall, in the opinion of
the Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section 11.07 shall survive the payment of all Obligations.
11.08 The Administrative Agent in its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Parent Borrower and its
Subsidiaries as though not acting as Administrative Agent hereunder. With
respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
11.09 Successor Administrative Agent. The Administrative Agent
may resign as the Administrative Agent upon 20 days' notice to the Lenders and
the Borrowers. Upon such resignation, the Required Lenders shall, with the
consent of the Parent Borrowers (such consent not to be unreasonably withheld),
appoint from among the Lenders a successor Administrative Agent for the Lenders,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this Section 11 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.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrowers hereby jointly
and severally agree to: (i) whether or not the transactions herein contemplated
are consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the negotiation, preparation,
syndication, execution, delivery and administration of the Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and of
consultants and advisors to the Administrative Agent and its counsel); (ii)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with any amendment, waiver or consent relating to this Agreement or
any other Credit Document; (iii) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent and each of the Lenders in connection with
the enforcement of the Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
disbursements of counsel and consultants for the Administrative Agent
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and for each of the Lenders); (iv) pay and hold each of the Lenders harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission to pay such taxes; and (v) indemnify the Administrative Agent and
each Lender, and their respective officers, directors, employees,
representatives and agents (each, an "indemnified person") from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses (collectively, "Claims") incurred by any of them as a result of, or
arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Lender is a party thereto) related to the entering into and/or performance of
any Credit Document or the use of the proceeds of any Loans hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified (as determined by a court of
competent jurisdiction in a final and non-appealable decision)).
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and continuance of an Event
of Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Borrower
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches and agencies of such Lender wherever located) to
or for the credit or the account of any Borrower against and on account of the
Obligations and liabilities of any such Borrower to such Lender or any other
Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of any such Borrower
purchased by such Lender or any other Lender pursuant to Section 12.06(b), and
all other claims of any nature or description arising out of or connected with
this Agreement or any other Credit Document, irrespective of whether or not such
Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured. Each
Lender is hereby designated the agent of all other Lenders for purposes of
effecting set off pursuant to this Section 12.02 and each Borrower hereby grants
to each Lender for such Lender's own benefit and as agent for all other Lenders
a continuing security interest in any and all deposits, accounts or moneys of
the Borrowers maintained from time to time with such Lender.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to a Borrower, at the
address specified opposite its signature below; if to any Lender, at its address
specified for such Lender on Annex II hereto; or, at such other address as shall
be designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, cabled or sent by overnight courier and shall be effective when
received.
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12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, no Borrower may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Lenders. Each Lender may at any time grant participations
in any of its rights hereunder or under any of its Notes to any bank or other
financial institution; provided that in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents, including rights of consent, approval or waiver (the
participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto) and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation, except
that the participant shall be entitled to receive the additional amounts under
Sections 1.10, 1.11, 2.04 and 4.04 of this Agreement to, and only to, the extent
that such Lender would be entitled to such benefits if the participation had not
been entered into or sold; and provided, further, that no Lender shall transfer,
grant or assign any participation under which the participant shall have rights
to approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Loan or Note in which such participant is
participating or reduce the rate or extend the time of payment of interest
thereon or Fees, or reduce the principal amount thereof, or increase such
participant's participating interest in any Commitment or Loan over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of any Commitment and that an increase in any
Commitment shall be permitted without the consent of any participant if such
participant's participation is not increased as a result thereof) or (ii)
consent to the assignment or transfer by any Borrower of any of its rights and
obligations under this Agreement or any other Credit Document except in
accordance with the terms hereof and thereof.
(b) Notwithstanding the foregoing, any Lender may assign all
or a portion of its rights and obligations hereunder to a NAIC approved bank or
other financial institution (unless otherwise agreed by the Parent Borrower and
the Administrative Agent) with the prior written consent of the Administrative
Agent and the Issuing Agent (such consent not to be unreasonably withheld or
delayed). No assignment of less than all of a Lender's rights and obligations
hereunder pursuant to the immediately preceding sentence shall, to the extent
such transaction represents an assignment to an institution other than one or
more Lenders hereunder, be in an aggregate amount less than the minimum of
$5,000,000 unless otherwise agreed to by the Administrative Agent and the Parent
Borrower in writing and no assignment shall be effective until all the then
outstanding Tranche 1 Letters of Credit or Tranche 2 Letters of Credit, as the
case may be, are returned by each respective beneficiary to the Issuing Agent
either for cancellation and/or to be exchanged for new or amended Letters of
Credit which give effect to such assignment. If any Lender so sells or assigns
all or a part of its rights hereunder or under the Notes, any reference in this
Agreement or the Notes to such assigning Lender shall thereafter refer to such
Lender and to the respective assignee to the extent of their respective
interests and the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits as
it would if it were such assigning Lender. Each assignment pursuant to this
Section 12.04(b) shall be effected by the assigning Lender and the assignee
Lender executing an Assignment Agreement (appropriately completed). At the time
of any such assignment, (i) Annex I shall be deemed to be amended to reflect the
Commitments, if
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any, and outstanding Loans, if any, of the respective assignee (which shall
result in a direct reduction to the Commitments, if any, and outstanding Loans,
if any, of the assigning Lender) and of the other Lenders, (ii) if any such
assignment occurs after the Effective Date, at the request of the assignor or
the assignee, the Parent Borrower will issue new Notes to the respective
assignee and to the assigning Lender in conformity with the requirements of
Section 1.05, (iii) all then outstanding Tranche 1 Letters of Credit or Tranche
2 Letters of Credit, as the case may be, shall be returned by each respective
beneficiary to the Issuing Agent either for cancellation and/or to be exchanged
for new or amended Letters of Credit to reflect such assignment (it being
understood that to the extent the respective beneficiaries do not consent to
such assignment, such assignment cannot occur) and (iv) the Administrative Agent
shall receive from the assigning Lender and/or the assignee Lender or financial
institution at the time of each assignment the payment of a nonrefundable
assignment fee of $3,500, provided that such transfer or assignment will not be
effective until recorded by the Administrative Agent on the Register pursuant to
Section 12.16 hereof. At the time of each assignment pursuant to this Section
12.04(b) to a Person which (x) is not already a Lender hereunder, (y) is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes and (z) is issuing Letters of Credit for
the account of a U.S. Borrower, the respective assignee Lender shall provide to
the Borrowers and the Administrative Agent the appropriate Internal Revenue
Service forms (and, if applicable a Section 4.04(b)(ii) Certificate) described
in Section 4.04(b). Each Lender and each Borrower agrees to execute such
documents (including, without limitation, amendments to this Agreement and the
other Credit Documents) as shall be necessary to effect the foregoing. Promptly
following any assignment pursuant to this Section 12.04(b), the assigning Lender
shall promptly notify the Borrowers and the Administrative Agent thereof.
Nothing in this Section 12.04 shall prevent or prohibit any Lender from pledging
its Loans or Notes hereunder to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this Section
12.04, no transfer or assignment of the interests or obligations of any Lender
hereunder or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require any Borrower to file a registration
statement with the SEC or to qualify the Loans under the "Blue Sky" laws of any
State of the United States.
(d) Each Lender initially party to this Agreement hereby
represents, and each Person that becomes a Lender pursuant to an assignment
permitted by clause (b) above will upon its becoming party to this Agreement
represent, that it is a commercial lender, other financial institution or other
"accredited investor" (as defined in SEC Regulation D) which makes loans in the
ordinary course of its business or is acquiring the Loans without a view to
distribution of the Loans within the meaning of the federal securities laws, and
that it will make or acquire Loans for its own account in the ordinary course of
such business, provided that, subject to the preceding clauses (a) through (c),
the disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Lender in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between any Borrower and the Administrative Agent or any Lender shall
operate as a waiver thereof; nor shall any single or
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partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Borrower in any case shall entitle such
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of each
Borrower in respect of any Obligations of such Borrower, it shall distribute
such payment to the Lenders (other than any Lender that has consented in writing
to waive its pro rata share of such payment) pro rata based upon their
respective shares, if any, of the Obligations with respect to which such payment
was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Borrower to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such amount,
provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP or SAP, as the case may be, consistently applied throughout
the periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by the Borrowers to the Lenders). In addition, except as
otherwise specifically provided herein, all computations determining compliance
with Section 8, including definitions used therein, shall utilize accounting
principles and policies in effect from time to time; provided that (i) if any
such accounting principle or policy (whether GAAP or SAP or both) shall change
after the Effective Date, the Borrowers shall give reasonable notice thereof to
the Administrative Agent and each of the Lenders and if within 30 days following
such notice any Borrower, the Administrative Agent or the Required Lenders shall
elect by giving written notice of such election to the other parties hereto,
such computations shall not give effect to such change unless and until this
Agreement shall be amended pursuant to Section 12.11 to give effect to such
change, and (ii) if at any time the computations determining compliance with
Section 8 utilize accounting principles different from those utilized in the
financial statements then being furnished to the Lenders pursuant to Section
7.01, such financial statements shall be accompanied by reconciliation
work-sheets.
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(b) All computations of interest on Loans and Fees hereunder
shall be made on the actual number of days elapsed over (i) a year of 365/366
days for interest on Loans maintained as Base Rate Loans when the Base Rate is
based on the Prime Lending Rate and (ii) a year of 360 days in all cases other
than that set forth in the preceding clause (i).
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT 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 THIS AGREEMENT, EACH
BORROWER AND EACH LENDER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH BORROWER AND EACH LENDER HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH BORROWER OR SUCH LENDER,
AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID
COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH BORROWER OR SUCH
LENDER. EACH BORROWER AND EACH LENDER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH BORROWER OR SUCH LENDER, AS THE CASE MAY BE, AT ITS
ADDRESS FOR NOTICES PURSUANT TO SECTION 12.03, SUCH SERVICE TO BECOME EFFECTIVE
30 DAYS AFTER SUCH MAILING. EACH BORROWER AND EACH LENDER, AS THE CASE MAY BE,
HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY
WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
EACH BORROWER IN ANY OTHER JURISDICTION.
(b) EACH BORROWER AND EACH LENDER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH
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ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the Parent
Borrower and the Administrative Agent.
12.10 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
12.11 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by each Borrower and the Required Lenders, provided that no
such change, waiver, discharge or termination shall, without the consent of each
Lender (other than a Defaulting Lender) directly affected thereby, (i) extend
the scheduled final maturity of any Loan or Note, or extend the required payment
date of a reimbursement obligation in respect of any Letter of Credit, or extend
the Commitment Termination Date, or extend the stated expiration date of any
Letter of Credit beyond the Final Maturity Date, or reduce the rate or extend
the time of payment of interest on any Loan or Note (except in connection with
the waiver of applicability of any post-default increase in interest rates), or
reduce the principal amount of any Loan or Note, or reduce the amount or extend
the time of payment of any Fee (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section
12.07(a) shall not constitute a reduction in the rate of interest or reduction
in the amount of Fees for purposes of this clause (i)), (ii) except as set forth
in Section 1.15, increase the Commitment of any Lender over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment shall not constitute
a change in the terms of any Commitment of any Lender), (iii) amend, modify or
waive any provision of this Section 12.11 (except for technical amendments with
respect to additional extensions of credit pursuant to this Agreement which
afford the protections to such additional extensions of credit of the type
provided to the Loans and the Commitments on the Effective Date), (iv) reduce
any percentage specified in, or otherwise modify, the definition of Required
Lenders (it being understood that (A) the Additional Tranche 1 Commitments (and
the additional Revolving Loans incurred in connection therewith) and (B) with
the consent of the Required Lenders, other additional extensions of credit
pursuant to this Agreement, in each case, may be included in the determination
of the Required Lenders on substantially the same basis as the extensions of
Loans and Commitments are included on the Effective Date), (v) release the
Parent Borrower from its obligations under the Parent Borrower Guaranty or (vi)
consent to the assignment or transfer by any Borrower of any of its rights and
obligations under this Agreement. No provision of Section 2 or any other
provision relating to the rights and/or obligations of the Issuing Agent may be
amended without the consent of the Issuing Agent. No provision of Section 11 or
any other provision relating to the rights and/or obligations of the
Administrative Agent may be amended without the consent of the Administrative
Agent.
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12.12 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.04, 4.04, 11.07 or 12.01 shall
survive the execution and delivery of this Agreement and the making of the
Loans, the repayment of the Obligations and the termination of the Total
Commitment.
12.13 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any branch, office, Subsidiary or
affiliate of such Lender. Notwithstanding anything to the contrary contained
herein, to the extent that a transfer of Loans pursuant to this Section 12.13
would, at the time of such transfer, result in increased costs under Section
1.10, 1.11, 2.04 or 4.04 from those being charged by the respective Lender prior
to such transfer, then the Parent Borrower shall not be obligated to pay such
increased costs (although the Parent Borrower shall be obligated to pay any
other increased costs of the type described above resulting from changes after
the date of the respective transfer).
12.14 Confidentiality. Each Lender shall (i) hold all
non-public information (including, without limitation, all financial projections
and analyses) furnished by any Borrower in connection with such Lender's
evaluation of whether to become a Lender hereunder or obtained by such Lender
pursuant to the requirements of this Agreement ("Confidential Information")
confidential, (ii) use Confidential Information only for purposes related to
this Agreement and its position as a Lender hereunder and (iii) not disclose
such Confidential Information other than as provided herein; provided that any
Lender and/or its affiliates may disclose any such Confidential Information (a)
as has become generally available to the public other than as a result of
disclosure in violation of this Section 12.14, (b) as has become available to
such Lender or any such affiliate on a non-confidential basis from a source
other than the Borrowers and their respective affiliates, provided that the
source is not known by such Lender to be prohibited from transmitting such
information to such Lender by a contractual, legal or fiduciary obligation, (c)
as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having or claiming
to have jurisdiction over such Lender and/or its affiliates, (d) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation or other judicial process (it being understood that, to the
extent reasonably practicable under the circumstances, each Borrower shall be
given prior notice and an opportunity to contest any proposed disclosure
pursuant to this clause (d)), (e) in order to comply with any law, order,
regulation or ruling applicable to such Lender and/or its affiliates, and (f) to
any permitted prospective or actual syndicate member or participant in any
Loans, provided that such prospective or actual syndicate member or participant
agrees with the respective assigning Lender to be bound by the provisions of
this Section 12.14. The provisions of this Section 12.14 shall survive any
termination of this Agreement.
12.15 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.16 Register. Each Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section
12.16, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Lenders,
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the Loans made by each of the Lenders and each repayment in respect of the
principal amount of the Loans of each Lender. Failure to make any such
recordation, or any error in such recordation shall not affect the obligations
of the Parent Borrower in respect of such Loans. With respect to any Lender, the
transfer of the Commitments of such Lender and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Administrative Agent with respect to ownership of such Commitments and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and any
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to Section 12.04(b). Coincident with the delivery
of such an Assignment Agreement to the Administrative Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender. Each Borrower agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 12.16 (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Administrative Agent (as determined by a court of competent jurisdiction in a
final and non-appealable decision)).
SECTION 13. Parent Borrower Guaranty.
13.01 The Guaranty. In order to induce the Lenders to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by the Parent Borrower from the proceeds of the
Loans and the issuance of the Letters of Credit, the Parent Borrower hereby
agrees with the Lenders as follows: the Parent Borrower hereby unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, the
full and prompt payment when due, whether upon maturity, acceleration or
otherwise, of any and all of the Parent Borrower Guaranteed Obligations of each
Designated Subsidiary Borrower to the Guaranteed Creditors. If any or all of the
Parent Borrower Guaranteed Obligations of any Designated Subsidiary Borrower to
the Guaranteed Creditors becomes due and payable hereunder, the Parent Borrower
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, together with any and all expenses which may be incurred by
the Guaranteed Creditors in collecting any of the Parent Borrower Guaranteed
Obligations. This Parent Borrower Guaranty is a guaranty of payment and not of
collection. If a claim is ever made upon any Guaranteed Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any of
the Parent Borrower Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property or (ii) any settlement or compromise of any such claim effected
by such payee with any such claimant, then and in such event the Parent Borrower
agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon the Parent Borrower, notwithstanding any revocation of this Parent
Borrower Guaranty or any other instrument evidencing any liability of any
Designated Subsidiary Borrower, and the Parent Borrower
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shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
13.02 Bankruptcy. Additionally, the Parent Borrower
unconditionally and irrevocably guarantees the payment of any and all of the
Parent Borrower Guaranteed Obligations of each Designated Subsidiary Borrower
hereunder to the Guaranteed Creditors whether or not due or payable by any
Designated Subsidiary Borrower upon the occurrence of any of the events
specified in Section 9.05 with respect to such Designated Subsidiary Borrower,
and unconditionally promises to pay such indebtedness to the Guaranteed
Creditors, or order, on demand, in lawful money of the United States.
13.03 Nature of Liability. The liability of the Parent
Borrower hereunder is exclusive and independent of any security for or other
guaranty of the Parent Borrower Guaranteed Obligations of any Designated
Subsidiary Borrower whether executed by the Parent Borrower, any other guarantor
or by any other party, and the liability of the Parent Borrower hereunder is not
affected or impaired by (a) any direction as to application of payment by each
Designated Subsidiary Borrower or by any other party (other than a direction by
the Guaranteed Creditor receiving such payment), or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Parent Borrower Guaranteed Obligations of each Designated
Subsidiary Borrower, or (c) any payment on or in reduction of any such other
guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by any Designated Subsidiary Borrower, or (e)
any payment made to the Guaranteed Creditors on the Parent Borrower Guaranteed
Obligations which any such Guaranteed Creditor repays to any Designated
Subsidiary Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and the Parent
Borrower waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding or (f) any action or inaction of the
type described in Section 13.05.
13.04 Independent Obligation. The obligations of the Parent
Borrower under this Section 13 are independent of the obligations of any other
guarantor, any other party or any Designated Subsidiary Borrower, and a separate
action or actions may be brought and prosecuted against the Parent Borrower
whether or not action is brought against any other guarantor, any other party or
any Designated Subsidiary Borrower and whether or not any other guarantor, any
other party or any Designated Subsidiary Borrower be joined in any such action
or actions. The Parent Borrower waives, to the full extent permitted by law, the
benefit of any statute of limitations affecting its liability under this Section
13 or the enforcement thereof. Any payment by any Designated Subsidiary Borrower
or other circumstance which operates to toll any statute of limitations as to
any Designated Subsidiary Borrower shall operate to toll the statute of
limitations as to the Parent Borrower.
13.05 Authorization. The obligations of the Parent Borrower
under this Section 13 shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by any action taken by any Guaranteed Creditor to:
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(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Parent Borrower Guaranteed Obligations (including any
increase or decrease in the rate of interest thereon), any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the Parent Borrower Guaranty herein made shall apply to
the Parent Borrower Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) take and hold security for the payment of the Parent
Borrower Guaranteed Obligations and sell, exchange, release, impair,
surrender, realize upon or otherwise deal with in any manner and in any
order any property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Parent Borrower Guaranteed
Obligations or any liabilities (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and/or
any offset there against;
(c) exercise or refrain from exercising any rights against any
Designated Subsidiary Borrower or others or otherwise act or refrain
from acting;
(d) release or substitute any one or more endorsers,
guarantors, any Designated Subsidiary Borrower or other obligors;
(e) settle or compromise any of the Parent Borrower Guaranteed
Obligations, any security therefor or any liability (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of any Designated
Subsidiary Borrower to its creditors other than the Guaranteed
Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of any Designated Subsidiary Borrower to
the Guaranteed Creditors regardless of what liability or liabilities of
any Designated Subsidiary Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any other Credit Document or any of
the instruments or agreements referred to herein or therein, or
otherwise amend, modify or supplement this Agreement, any other Credit
Document or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of the Parent Borrower from its liabilities under this Parent
Borrower Guaranty.
13.06 Reliance. It is not necessary for the Guaranteed
Creditors to inquire into the capacity or powers of any Designated Subsidiary
Borrower or the officers, directors, partners or agents acting or purporting to
act on their behalf, and any Parent Borrower Guaranteed Obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
13.07 Subordination. Any indebtedness of any Designated
Subsidiary Borrower now or hereafter owing to the Parent Borrower is hereby
subordinated to the Parent Borrower Guaranteed Obligations of any Designated
Subsidiary Borrower owing to the Guaranteed
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Creditors; and if the Administrative Agent so requests at a time when an Event
of Default exists, no Designated Subsidiary Borrower shall make, or be permitted
to make, any payment to the Parent Borrower in respect of such indebtedness owed
to the Parent Borrower, but without affecting or impairing in any manner the
liability of the Parent Borrower under the other provisions of this Parent
Borrower Guaranty. Prior to the transfer by the Parent Borrower of any note or
negotiable instrument evidencing any of the indebtedness of any Designated
Subsidiary Borrower to the Parent Borrower, the Parent Borrower shall xxxx such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, the Parent
Borrower hereby agrees with the Guaranteed Creditors that it will not exercise
any right of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Parent Borrower Guaranteed Obligations have been
irrevocably paid in full in cash.
13.08 Waiver. (a) The Parent Borrower waives any right (except
as shall be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against each Designated Subsidiary Borrower,
any other guarantor or any other party, (ii) proceed against or exhaust any
security held from any Designated Subsidiary Borrower, any other guarantor or
any other party or (iii) pursue any other remedy in any Guaranteed Creditor's
power whatsoever. The Parent Borrower waives any defense based on or arising out
of any defense of any Designated Subsidiary Borrower, any other guarantor or any
other party, other than payment in full of the Parent Borrower Guaranteed
Obligations, based on or arising out of the disability of each Designated
Subsidiary Borrower, any other guarantor or any other party, or the
unenforceability of the Parent Borrower Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of any
Designated Subsidiary Borrower other than payment in full of the Parent Borrower
Guaranteed Obligations. The Guaranteed Creditors may, at their election,
foreclose on any security held by the Administrative Agent or any other
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against any Designated Subsidiary Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of the Parent Borrower hereunder except to the extent the Parent
Borrower Guaranteed Obligations have been paid. The Parent Borrower waives any
defense arising out of any such election by the Guaranteed Creditors, even
though such election operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of the Parent Borrower against any
Designated Subsidiary Borrower or any other party or any security.
(b) The Parent Borrower waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Parent Borrower Guaranty, and notices of the existence, creation or
incurring of new or additional Parent Borrower Guaranteed Obligations. The
Parent Borrower assumes all responsibility for being and keeping itself informed
of each Designated Subsidiary Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Parent
Borrower Guaranteed Obligations and the nature, scope and extent of the risks
which the Parent Borrower assumes and incurs hereunder,
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and agrees that the Guaranteed Creditors shall have no duty to advise the Parent
Borrower of information known to them regarding such circumstances or risks.
(c) The Parent Borrower warrants and agrees that each of the
waivers set forth above in this Section 13 is made with full knowledge of its
significance and consequences, and such waivers shall be effective to the
maximum extent permitted by law.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address:
Xxxxx Xxxxx, 0 Xxx-xx-Xxxxx Xxxx XXXXXXXXX SPECIALTY HOLDINGS LTD.
Xxxxxxxx XX 08
Bermuda
By:
Name:
Title:
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxx Xxxxx, 0 Xxx-xx-Xxxxx Xxxx ENDURANCE SPECIALTY INSURANCE LTD.
Xxxxxxxx XX 08
Bermuda
By:
Name:
Title:
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
JPMORGAN CHASE BANK,
as Administrative Agent and
Issuing Agent
By:
Name:
Title:
THE BANK OF NEW YORK
By:
Name:
Title:
BARCLAYS BANK PLC
By:
Name:
Title:
COMERICA BANK
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
ING BANK N.V., LONDON BRANCH
By:
Name:
Title:
ANNEX I
LIST OF LENDERS AND COMMITMENTS
Lender Name Tranche 1 Commitments Tranche 2 Commitments
----------- --------------------- ---------------------
The Bank of New York $21,500,000.00
Barclays Bank Plc $21,500,000.00
Comerica Bank $15,000,000.00
Credit Lyonnais New York Branch $15,000,000.00
ING Bank N.V., London Branch $35,000,000.00
-------------- --------------
Total: $73,000,000.00 $35,000,000.00
============== ==============
ANNEX II
LENDER ADDRESSES
Lender Address
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Barclays Bank Plc
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
England
Attention: Xxxxx Xxx
Tel: (00) 000-000-0000
Fax: (00) 000-000-0000
Comerica Bank
One Detroit Center
000 Xxxxxxxx Xxxxxx XX 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Credit Lyonnais New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
ING Bank N.V., London Branch
60 London Wall, Insurance Banking Group
Xxxxxx, XX0X 0XX
Attention: Xxxx Xxxxxxx
Tel: (00) 000-000-0000
Fax: (00) 000-000-0000
ANNEX III
SUBSIDIARIES
NAME OWNER PERCENTAGE
---- ----- ----------
ANNEX IV
CAPITALIZATION
--------------
ANNEX V
INDEBTEDNESS
------------
DESCRIPTION AND LENDER BORROWING ENTITY PRINCIPAL AMOUNT
---------------------- ---------------- ----------------
ANNEX VI
INSURANCE LICENSES
------------------
ANNEX VII
LIENS
-----
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit....................................................................1
1.01 Tranche 1 Commitments.........................................................................1
1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings................................2
1.03 Notice of Borrowing...........................................................................2
1.04 Disbursement of Funds.........................................................................2
1.05 Notes.........................................................................................3
1.06 Conversions...................................................................................4
1.07 Pro Rata Borrowings...........................................................................4
1.08 Interest......................................................................................5
1.09 Interest Periods..............................................................................5
1.10 Increased Costs, Illegality, etc..............................................................6
1.11 Compensation..................................................................................9
1.12 Change of Lending Office......................................................................9
1.13 Replacement of Lenders........................................................................9
1.14 Designated Subsidiary Borrowers..............................................................10
1.15 Additional Tranche 1 Commitments.............................................................11
SECTION 2. A. Tranche 1 Letters of Credit..............................................................13
2A.01 Tranche 1 Letters of Credit.......................................................13
2A.02 Tranche 1 Letter of Credit Requests...............................................15
2A.03 Agreement to Repay Tranche 1 Letter of Credit Drawings............................15
2A.04 Increased Costs...................................................................16
2A.05 Tranche 1 Letter of Credit Expiration Extensions..................................17
2A.06 Changes to Stated Amount..........................................................17
2A.07 Representations and Warranties of Tranche 1 Lenders...............................17
SECTION 2B Tranche 2 Letters of Credit......................................................17
2B.01 Tranche 2 Letters of Credit.......................................................17
2B.02 Tranche 2 Letter of Credit Requests...............................................19
2B.03 Agreement to Repay Tranche 2 Letter of Credit Drawings............................20
2B.04 Increased Costs...................................................................21
2B.05 Tranche 2 Letter of Credit Expiration Extensions..................................21
2B.06 Changes to Stated Amount..........................................................21
2B.07 Representations and Warranties of Tranche 2 Lenders...............................22
SECTION 3. Fees; Commitments............................................................................22
3.01 Fees.........................................................................................22
3.02 Voluntary Reduction of Commitments...........................................................23
3.03 Mandatory Reduction of Commitments...........................................................24
SECTION 4. Payments.....................................................................................24
4.01 Voluntary Prepayments........................................................................24
4.02 Mandatory Repayments.........................................................................25
4.03 Method and Place of Payment..................................................................25
4.04 Net Payments.................................................................................26
SECTION 5. Conditions Precedent.........................................................................28
5.01 Conditions Precedent to the Effective Date...................................................28
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TABLE OF CONTENTS
(continued)
Page
----
5.02 Conditions Precedent to All Loans and Letters of Credit......................................30
SECTION 6. Representations, Warranties and Agreements...................................................30
6.01 Corporate Status.............................................................................31
6.02 Corporate Power and Authority................................................................31
6.03 No Contravention of Laws, Agreements or Organizational Documents.............................31
6.04 Litigation and Contingent Liabilities........................................................31
6.05 Use of Proceeds; Margin Regulations..........................................................32
6.06 Approvals....................................................................................32
6.07 Investment Company Act.......................................................................32
6.08 Public Utility Holding Company Act...........................................................32
6.09 True and Complete Disclosure; Projections and Assumptions....................................32
6.10 Financial Condition; Financial Statements....................................................33
6.11 Tax Returns and Payments.....................................................................33
6.12 Compliance with ERISA........................................................................33
6.13 Subsidiaries.................................................................................34
6.14 Capitalization...............................................................................34
6.15 Indebtedness.................................................................................34
6.16 Compliance with Statutes, etc................................................................35
6.17 Insurance Licenses...........................................................................35
6.18 Insurance Business...........................................................................35
6.19 Reinsurance Agreements.......................................................................35
6.20 The Transaction..............................................................................35
SECTION 7. Affirmative Covenants........................................................................36
7.01 Information Covenants........................................................................36
7.02 Books, Records and Inspections...............................................................38
7.03 Insurance....................................................................................38
7.04 Payment of Taxes.............................................................................38
7.05 Maintenance of Existence.....................................................................39
7.06 Compliance with Statutes, etc................................................................39
7.07 ERISA........................................................................................39
7.08 Maintenance of Property......................................................................40
7.09 Maintenance of Licenses and Permits..........................................................40
7.10 Claims Paying Ratings........................................................................40
7.11 End of Fiscal Years; Fiscal Quarters.........................................................40
SECTION 8. Negative Covenants...........................................................................40
8.01 Changes in Business..........................................................................40
8.02 Consolidations, Mergers, Sales of Assets and Acquisitions....................................40
8.03 Liens........................................................................................41
8.04 Indebtedness.................................................................................42
8.05 Issuance of Stock............................................................................42
8.06 Dissolution..................................................................................43
8.07 Restricted Payments..........................................................................43
8.08 Transactions with Affiliates.................................................................43
8.09 Maximum Leverage Ratio.......................................................................43
8.10 Minimum Consolidated Tangible Net Worth......................................................43
8.11 Minimum Consolidated Fixed Charge Coverage Ratio.............................................43
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TABLE OF CONTENTS
(continued)
Page
----
8.12 Private Act..................................................................................43
SECTION 9. Events of Default............................................................................43
9.01 Payments.....................................................................................43
9.02 Representations, etc.........................................................................43
9.03 Covenants....................................................................................44
9.04 Default Under Other Agreements...............................................................44
9.05 Bankruptcy, etc..............................................................................44
9.06 ERISA........................................................................................45
9.07 Judgments....................................................................................45
9.08 Revocation of Insurance License..............................................................45
9.09 Parent Borrower Guaranty.....................................................................45
9.10 Ownership....................................................................................45
SECTION 10. Definitions..................................................................................46
SECTION 11. The Administrative Agent.....................................................................63
11.01 Appointment..................................................................................63
11.02 Delegation of Duties.........................................................................63
11.03 Exculpatory Provisions.......................................................................64
11.04 Reliance by Administrative Agent.............................................................64
11.05 Notice of Default............................................................................65
11.06 Non-Reliance.................................................................................65
11.07 Indemnification..............................................................................65
11.08 The Administrative Agent in its Individual Capacity..........................................66
11.09 Successor Administrative Agent...............................................................66
SECTION 12. Miscellaneous................................................................................66
12.01 Payment of Expenses, etc.....................................................................66
12.02 Right of Setoff..............................................................................67
12.03 Notices......................................................................................67
12.04 Benefit of Agreement.........................................................................68
12.05 No Waiver; Remedies Cumulative...............................................................69
12.06 Payments Pro Rata............................................................................70
12.07 Calculations; Computations...................................................................70
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.............................................71
12.09 Counterparts.................................................................................72
12.10 Headings Descriptive.........................................................................72
12.11 Amendment or Waiver..........................................................................72
12.12 Survival.....................................................................................73
12.13 Domicile of Loans............................................................................73
12.14 Confidentiality..............................................................................73
12.15 WAIVER OF JURY TRIAL.........................................................................73
12.16 Register.....................................................................................73
SECTION 13. Parent Borrower Guaranty.....................................................................74
13.01 The Guaranty.................................................................................74
13.02 Bankruptcy...................................................................................75
13.03 Nature of Liability..........................................................................75
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TABLE OF CONTENTS
(continued)
Page
----
13.04 Independent Obligation.......................................................................75
13.05 Authorization................................................................................75
13.06 Reliance.....................................................................................76
13.07 Subordination................................................................................76
13.08 Waiver.......................................................................................77
-iv-
ANNEX I List of Lenders and Commitments
ANNEX II Lender Addresses
ANNEX III Subsidiaries
ANNEX IV Capitalization
ANNEX V Indebtedness
ANNEX VI Insurance Licenses
ANNEX VII Liens
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Note
EXHIBIT C-1 Form of Tranche 1 Letter of Credit Request
EXHIBIT C-2 Form of Tranche 2 Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
EXHIBIT E-2 Form of Opinion of Xxxxxxx, Xxxxxxxx & Xxxxx
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Assignment Agreement
EXHIBIT H Form of DSB Assumption Agreement
EXHIBIT I-1 Form of Opinion of Counsel to a Designated Subsidiary Borrower
Located in the United States
EXHIBIT I-2 Form of Opinion of Counsel to a Designated Subsidiary
Borrower Located in Bermuda
EXHIBIT J Form of Additional Commitment Agreement
-v-
