CREDIT AGREEMENT dated as of August 7, 2017 among VALIDUS REINSURANCE, LTD., as Borrower, VALIDUS HOLDINGS, LTD., as Holdings, and BARCLAYS BANK PLC, as Lender
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CREDIT AGREEMENT
dated as of
August 7, 2017
among
VALIDUS REINSURANCE, LTD.,
as Borrower,
VALIDUS HOLDINGS, LTD.,
as Holdings,
and
BARCLAYS BANK PLC,
as Lender
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TABLE OF CONTENTS
(continued)
Page
iv
SCHEDULES
SCHEDULE 3.12 – Subsidiaries
SCHEDULE 3.13 – Capitalization
SCHEDULE 3.14 – Existing Indebtedness
SCHEDULE 6.03 – Existing Liens
SCHEDULE 6.09 – Existing Affiliate Transactions
SCHEDULE 6.12 – Limitation on Certain Restrictions on Subsidiaries
SCHEDULE 9.01 – Information for Notices
EXHIBITS
EXHIBIT A - Assignment and Assumption
EXHIBIT B - Borrowing Request
EXHIBIT C - Interest Election Request
EXHIBIT D - Prepayment Notice
EXHIBIT E - U.S. Tax Compliance Certificate
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CREDIT AGREEMENT dated as of August 7, 2017, among VALIDUS
REINSURANCE, LTD., a reinsurance company organized under the laws of Bermuda (the
“Borrower”), VALIDUS HOLDINGS, LTD., a holding company organized under the laws of
Bermuda (“Holdings”), and BARCLAYS BANK PLC, as lender (in such capacity, and together
with any Transferee permitted under Section 9.04(b), the “Lender”).
The Borrower has requested that the Lender extend credit to the Borrower, and the
Lender is willing to do so on the terms and conditions set forth herein. In consideration of the
mutual covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:
“Acquired Indebtedness” means Indebtedness of the Borrower or a Subsidiary
acquired pursuant to an acquisition not prohibited under this Agreement (or Indebtedness assumed
at the time of such acquisition of an asset securing such Indebtedness); provided that such
Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such
acquisition.
“Adjusted Eurodollar Rate” means an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the Eurodollar Rate for such Interest Period
divided by (b) one minus the Eurodollar Reserve Percentage; provided that the Adjusted
Eurodollar Rate shall not be less than 0.00% per annum.
“Affiliate” means, with respect to a specified Person at any date, another Person
that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is
under common Control with the Person specified as of such date.
“Agreement” means this Credit Agreement.
“Anti-Corruption Laws” means the United States Foreign Corrupt Practices Act of
1977; the UK Bribery Act; and all laws, rules, and regulations of any jurisdiction applicable to
Holdings or its Subsidiaries from time to time concerning or relating to bribery or corruption.
“Applicable Insurance Regulatory Authority” means, when used with respect to
any Regulated Insurance Company, (x) the insurance department or similar administrative
authority or agency located in each state or jurisdiction (foreign or domestic) in which such
Regulated Insurance Company is domiciled or (y) to the extent asserting regulatory jurisdiction
over such Regulated Insurance Company, the insurance department, authority or agency in each
state or jurisdiction (foreign or domestic) in which such Regulated Insurance Company is licensed,
and shall include any Federal or national insurance regulatory department, authority or agency that
may be created and that asserts insurance regulatory jurisdiction over such Regulated Insurance
Company.
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“Applicable Rate” means a per annum rate equal to:
(a) with respect to Base Rate Loans, 0.125%; and
(b) with respect to Eurodollar Rate Loans 1.125%.
“Assignment and Assumption” means an assignment and assumption entered into
by the Lender and an assignee (with the consent of any party whose consent is required by the
terms hereof), in substantially the form of Exhibit A or any other form approved by the Lender.
“Authorized Officer” means, as to any Person, the Chief Executive Officer, the
President, the Chief Operating Officer, any Vice President, the Secretary, or the Chief Financial
Officer Finance Director of such Person or any other officer of such Person duly authorized by
such Person to act on behalf of such Person hereunder.
“Availability Period” means the period from and including the Closing Date to but
excluding the Maturity Date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers
by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial
Institution.
“Bail-In Legislation” means, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from time to time
which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy.”
“Base Rate” means, for any day, a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate (which, if negative, shall be deemed to be 0%) on such day plus 1/2
of 1%, (b) the Prime Rate on such day and (c) the Adjusted Eurodollar Rate published on such day
(or if such day is not a Business Day the next previous Business Day) for an Interest Period of one
month plus 1.00%; provided that for the purposes of clause (c), the Adjusted Eurodollar Rate for
any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London
time) by reference to the Screen Rate, as if the relevant Borrowing of Base Rate Loans were a
Eurodollar Rate Borrowing. If the Lender shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate for any
reason, the Base Rate shall be determined without regard to clause (a) above until the
circumstances giving rise to such inability no longer exist.
“Base Rate Borrowing” means, as to any Borrowing, the Base Rate Loans
comprising such Borrowing.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
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“Bermuda Companies Law” means the Companies Xxx 0000 of Bermuda and other
relevant Bermuda law.
“Borrower” has the meaning assigned to such term in the Preamble.
“Borrowing” means a borrowing consisting of simultaneous Loans of the same
Type and, in the case of Eurodollar Rate Loans, having the same Interest Period.
“Borrowing Request” means a request for a Borrowing, which, when in writing,
shall be substantially in the form of Exhibit B (or in such other form as the Lender may approve).
“Business Day” means any day that is not a Saturday, Sunday or other day which
is a legal holiday under the laws of the State of New York or is a day on which banking institutions
in such state are authorized or required by law to close; provided that, when used in connection
with a Eurodollar Rate Loan, the term “Business Day” means any such day that is also a day on
which dealings in Dollar deposits are conducted by and between banks in the London interbank
market.
“Capital Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Capital Markets Product” means, as to any Person, any security, commodity,
derivative transaction or other financial or similar product purchased, sold or entered into by such
Person for the purpose of a third-party undertaking or assuming one or more risks otherwise
assumed by such Person or entered into by such Person for the purpose of managing one or more
risks otherwise assumed by such Person or other agreements or arrangements entered into by such
Person designed to transfer credit risk from one party to another, including (i) any structured
insurance product, catastrophe bond, rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, commodity hedge, equity or equity index swap,
equity or equity index option, bond option, interest rate option or hedge, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-
currency rate swap transaction, currency option or swap transaction, credit protection transaction,
credit swap, credit default swap (including single default, single-name, basket and first-to-default
swaps), credit default option, equity default swap, total return swap, credit-linked notes, credit
spread transaction, repurchase transaction, reverse repurchase transaction, buy/sellback
transaction, securities lending transaction, weather index transaction, emissions allowance
transaction, or forward purchase or sale of a security, commodity or other financial instrument or
interest (including any option with respect to any of these transactions), (ii) any transaction which
is a type of transaction that is similar to any transaction referred to in clause (i) above that is
currently, or in the future becomes, recurrently entered into in the financial markets, (iii) any
combination of the transactions referred to in clauses (i) and (ii) above and (iv) any master
agreement relating to any of the transactions referred to in clauses (i), (ii) or (iii) above.
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“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Transferee, if later, the date on which such Transferee becomes a Lender), of any of
the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation, implementation or
application thereof by any Governmental Authority or (c) the making or issuance of any request,
rule, guideline or directive (whether or not having the force of law) by any Governmental
Authority; provided that, notwithstanding anything herein to the contrary, (i) the Xxxx-Xxxxx Xxxx
Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or foreign regulatory
authorities, in each case, pursuant to Basel III, shall in each case be deemed to be a “Change in
Law,” regardless of the date enacted, adopted or issued.
“Change of Control” means (a) the Borrower ceasing to be a Wholly-Owned
Subsidiary of Holdings, (b) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange Act of 1934, as
amended, and the rules of the SEC thereunder as in effect on the date hereof) (other than any
corporation owned, directly or indirectly, by the stockholders of Holdings in substantially the same
proportions as their ownership of stock in Holdings) of Equity Interests representing more than
50% of either the aggregate ordinary voting power or the aggregate equity value represented by
the issued and outstanding Equity Interests in Holdings, or (c) the occupation at any time of a
majority of the seats (other than vacant seats) on the board of directors of Holdings by Persons
who were not (i) directors of Holdings on the date of this Agreement, (ii) nominated or appointed
by the board of directors of Holdings or (iii) approved by the board of directors of Holdings as
director candidates prior to their election.
“Closing Date” means the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 9.02.
“Code” means the Internal Revenue Code of 1986.
“Commitment” means, as to the Lender, its commitment to make Loans in an
aggregate principal amount at any time outstanding not to exceed $65,000,000, as the amount of
such commitment may be changed from time to time pursuant to the terms hereof.
“Conditional Termination Notice” has the meaning provided in Section 2.07(c).
“Connection Income Taxes” means Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or branch profits
Taxes.
“Consolidated Indebtedness” means, as of any date of determination, all
Indebtedness described in clause (a) of the definition thereof plus any Indebtedness for borrowed
money of any other Person as to which Holdings and/or any of its Subsidiaries has created a
guarantee or other contingent obligation (but only to the extent of such guarantee or contingent
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obligation). For the avoidance of doubt, “Consolidated Indebtedness” shall not include obligations
(contingent or otherwise) in respect of undrawn letters of credit.
“Consolidated Net Worth” means, as of any date of determination, the Net Worth
of Holdings and its Subsidiaries determined on a consolidated basis in accordance with GAAP
after appropriate deduction for any minority interests in Subsidiaries including for the avoidance
of doubt the aggregate principal amount of all outstanding preferred (including without limitation
trust preferred) or preference securities or Hybrid Capital of Holdings and its Subsidiaries,
provided that the aggregate outstanding amount of such preferred or preference securities or
Hybrid Capital of Holdings and its Subsidiaries shall only be included in Consolidated Net Worth
to the extent such amount would be included in a determination of the Net Worth of Holdings and
its Subsidiaries in accordance with GAAP.
“Consolidated Total Capital” means, as of any date of determination, the sum of
(i) Consolidated Indebtedness and (ii) Consolidated Net Worth at such time.
“Control” means, with respect to any Person, the possession, directly or indirectly,
of the power (i) to vote 10% or more of the voting power of the securities having ordinary voting
power for the election of the directors of such Person or (ii) to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become an Event of
Default.
“Default Rate” means an interest rate (before as well as after judgment) equal to
(a) with respect to overdue principal, the applicable interest rate plus 2.00% per annum (provided
that, with respect to a Eurodollar Rate Loan, the determination of the applicable interest rate is
subject to Section 2.05(e) to the extent that Eurodollar Rate Loans may not be converted to, or
continued as, Eurodollar Rate Loans, pursuant thereto) and (b) with respect to any other overdue
amount (including overdue interest), the interest rate applicable to Base Rate Loans in the case of
overdue interest or fee or otherwise plus 2.00% per annum.
“Dispositions” has the meaning provided in Section 6.02.
“Dividends” has the meaning provided in Section 6.08.
“Dollar” and “$” mean lawful money of the United States.
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent of an institution
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described in clause (a) of this definition, or (c) any financial institution established in an EEA
Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this
definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country (including any
delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” means any Person that is (a) an Affiliate of the Lender or (b) a
commercial bank, insurance company, investment or mutual fund or other entity that is an
“accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended)
and which extends credit or buys loans in the ordinary course of business; provided that in no event
shall “Eligible Assignee” include (i) the Borrower or any of its Affiliates or Subsidiaries or (ii) a
natural person.
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the environment, preservation
or reclamation of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise (including
any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of
Holdings or any Subsidiary directly or indirectly resulting from or based upon (a) its violation of
any Environmental Law, (b) its generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) its exposure to any Hazardous Materials, (d) its release
or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing, but in each of (a) through (e) excluding liabilities arising out of
Capital Markets Products and insurance and reinsurance contracts, agreements and arrangements
in each case entered into in the ordinary course of business and not for speculative purposes.
“Equity Interests” means, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such shares (or such other interests), and
other ownership or profit interests in such Person (including 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; provided that
“Equity Interests” shall not include Indebtedness for borrowed money which is convertible into
Equity Interests.
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“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time and the regulations promulgated and rulings issued thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” means any corporation or trade or business which is a member
of the same controlled group of corporations (within the meaning of Section 414(b) of the Code)
as Holdings or any of its Subsidiaries or is under common control (within the meaning of
Section 414(c) of the Code) with Holdings or any of its Subsidiaries.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect from time to
time.
“Eurodollar Rate” means, for any Interest Period as to any Eurodollar Rate Loan,
(i) the rate per annum determined by the Lender to be the offered rate which appears on the page
of the Reuters Screen (or any successor thereto) which displays the London interbank offered rate
administered by ICE Benchmark Administration Limited (or any other person which takes over
administration of that rate) (such page currently being the LIBOR01 page) for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time), two Business Days prior to the first
day of such Interest Period, (ii) in the event the rate referenced in the preceding clause (i) does not
appear on such page or service or if such page or service shall cease to be available, the rate
determined by the Lender to be the offered rate on such other page or other service which displays
the Screen Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with
a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period or (iii) if Screen Rates are
quoted under either of the preceding clauses (i) or (ii), but there is no such quotation for the Interest
Period elected, the Screen Rate shall be equal to the applicable Interpolated Rate.
“Eurodollar Rate Borrowing” means, as to any Borrowing, the Eurodollar Rate
Loans comprising such Borrowing.
“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
definition of “Eurodollar Rate.”
“Eurodollar Reserve Percentage” means, for any day during any Interest Period, the
reserve percentage in effect on such day, whether or not applicable to the Lender, under regulations
issued from time to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, special, supplemental or other marginal reserve
requirement) with respect to eurocurrency funding (currently referred to as “Eurocurrency
liabilities” in Regulation D). The Adjusted Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the Closing Date of any change in the Eurodollar
Reserve Percentage.
“Event of Default” has the meaning assigned to such term in Article VII.
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“Excluded Taxes” means, with respect to the Lender, or any other recipient of any
payment to be made by or on account of any obligation of any Loan Party hereunder or under any
of the other Credit Documents, (a) Taxes imposed on (or measured by) its net income or net profits
(however denominated), franchise Taxes and branch profits Taxes, in each case, (i) imposed by
any jurisdiction (or political subdivision thereof) in or under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, or (ii) that are Other Connection Taxes, (b) in the case of a
Foreign Lender, any withholding Tax that is imposed by the United States of America or Bermuda
on amounts payable to or for the account of such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from any Loan Party with respect to
such withholding Tax pursuant to Section 2.11(a), (c) Taxes attributable to such recipient’s failure
to comply with Section 2.11(e) and (d) any U.S. Federal withholding Taxes imposed under
FATCA.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version of such Sections that is substantively comparable
and not materially more onerous to comply with), any current or future regulations or official
interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Effective Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next succeeding Business
Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to the Lender on such day on such transactions as determined by
the Lender.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System of the United States.
“Fee Letter” means the engagement letter dated June 16, 2017 between Holdings
and the Lender.
“Financial Officer” means, as to any Person, the chief financial officer, principal
accounting officer, treasurer or controller of such Person.
“Fitch” means Fitch Ratings, Inc.
“Five-Year Secured Letter of Credit Facility” means the $300,000,000 five-year
secured letter of credit facility among Holdings, the Borrower, various Designated Subsidiary
Account Parties (as defined therein), JPMorgan Chase Bank, N.A., as administrative agent, and
one or more lenders entered into on December 9, 2015, including the related collateral and security
documents and other instruments and agreements executed in connection therewith, and
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amendments, renewals, replacements, refinancings and restatements to any of the foregoing
(provided that the principal amount thereof shall not exceed $300,000,000 or, if increased in
accordance with its terms, $400,000,000, plus reasonable refinancing costs, fees and expenses).
“Five-Year Unsecured Revolving Credit Facility” means the $85,000,000 five-year
unsecured revolving credit and letter of credit facility among Holdings, the Borrower, various
Designated Subsidiary Account Parties (as defined therein), JPMorgan Chase Bank, N.A., as
administrative agent, and one or more lenders entered into on December 9, 2015, including the
related collateral and security documents and other instruments and agreements executed in
connection therewith, and amendments, renewals, replacements, refinancings and restatements to
any of the foregoing.
“Foreign Lender” means any Lender that is resident for tax purposes or organized
under the laws of a jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
“Foreign Pension Plan” means any plan, fund (including any superannuation fund)
or other similar program established or maintained outside the United States of America by
Holdings or any one or more of its Subsidiaries primarily for the benefit of employees of Holdings
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.
“Fronting Arrangement” means an agreement or other arrangement by a Regulated
Insurance Company pursuant to which an insurer or insurers agree to issue insurance policies at
the request or on behalf of such Regulated Insurance Company and such Regulated Insurance
Company assumes the obligations in respect thereof pursuant a Reinsurance Agreement or
otherwise.
“GAAP” means generally accepted accounting principles in the United States of
America.
“Governmental Authority” means any nation or government, or state or political
subdivision thereof, and any agency, authority, instrumentality, regulatory body, court,
administrative tribunal, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” of or by any Person (the “guarantor”) means any obligation
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations
(“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including 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 or lease property,
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securities or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary obligation or
(d) otherwise to assure or hold harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Guarantee shall not include (x) endorsements of
instruments for deposit or collection in the ordinary course of business and (y) obligations of any
Regulated Insurance Company under Insurance Contracts, Reinsurance Agreements, Fronting
Arrangements or Retrocession Agreements (including any Liens with respect thereto). The
amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good faith.
“Guaranty” means the guaranty of Holdings provided in Article VIII.
“Hazardous Materials” means all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes, and all other substances or wastes of any nature regulated pursuant
to any Environmental Law.
“Holdings” has the meaning assigned to such term in the Preamble.
“Hybrid Capital” means any security that affords equity benefit to the issuer thereof
(under the procedures and guidelines of S&P) by having ongoing payment requirements that are
more flexible than interest payments associated with conventional indebtedness for borrowed
money and by being contractually subordinated to such indebtedness. For the avoidance of doubt,
Holding’s Junior Subordinated Deferrable Debentures constitute Hybrid Capital.
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to property acquired by such Person, (d) all obligations
of such Person in respect of the deferred purchase price of property or services (excluding current
ordinary course trade accounts payable deferred compensation and any purchase price adjustment,
earnout, contingent payment or deferred payment of a similar nature incurred in connection with
an acquisition), (e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness secured thereby has been
assumed, provided that the amount of Indebtedness of such Person shall be the lesser of (i) the fair
market value of such property at such date of determination (determined in good faith by the
Borrower) and (ii) the amount of such Indebtedness of such other Person, (f) all Guarantees by
such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all
obligations (or to the extent netting is permitted under the applicable agreement governing such
Capital Markets Products and such netting is limited with respect to the counterparty or
counterparties of such agreement, all net termination obligations) of such Person under
transactions in Capital Markets Products and (i) all reimbursement obligations of such Person in
respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;
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provided that, Indebtedness shall not include any preferred (including without limitation trust
preferred) or preference securities or Hybrid Capital, in each case issued by Holdings, to the extent
such preferred or preference securities or Hybrid Capital would be treated as equity issued by
Holdings under the applicable procedures and guidelines of S&P as of the date hereof. The
Indebtedness of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable therefor. For the
avoidance of doubt, Indebtedness shall not include (v) current trade payables (including current
payables under insurance contracts and current reinsurance payables) and accrued expenses, in
each case arising in the ordinary course of business, (w) obligations and Guarantees of Regulated
Insurance Companies with respect to Policies, (x) obligations and Guarantees with respect to
products underwritten by Regulated Insurance Companies in the ordinary course of business,
including insurance and reinsurance policies, annuities, performance and surety bonds,
assumptions of liabilities and any related contingent obligations and (y) Reinsurance Agreements
and Fronting Arrangements and Guarantees thereof entered into by any Regulated Insurance
Company in the ordinary course of business.
“Indemnified Liabilities” has the meaning assigned to such term in Section 9.03(b).
“Indemnified Taxes” means Taxes, other than Excluded Taxes and Other Taxes,
imposed on or with respect to any payment made by or on account of any obligation of the Loan
Parties under this Agreement.
“Indemnitee” has the meaning assigned to such term in Section 9.03(b).
“Insurance Business” means one or more aspects of the business of selling, issuing
or underwriting insurance or reinsurance and other businesses reasonably related thereto.
“Insurance Contract” means any insurance contract or policy issued by a Regulated
Insurance Company but shall not include any Reinsurance Agreement, Fronting Arrangement or
Retrocession Agreement.
“Insurance Licenses” means the material licenses (including licenses or certificates
of authority from Applicable Insurance Regulatory Authorities), permits or authorizations to
transact insurance and reinsurance business held by any Regulated Insurance Company.
“Interest Election Request” means a request by the Borrower to convert or continue
a Borrowing in accordance with Section 2.05, which, when in writing, shall be substantially in the
form of Exhibit C (or such other form as the Lender may approve).
“Interest Payment Date” means (a) as to any Base Rate Loan, the last Business Day
of each March, June, September and December and the Maturity Date and (b) as to any Eurodollar
Rate Loan, the last day of each Interest Period therefor and, in the case of any Interest Period of
more than three months’ duration, each day prior to the last day of such Interest Period that occurs
at three-month intervals after the first day of such Interest Period, and the Maturity Date.
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“Interest Period” means, as to any Eurodollar Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in
the calendar month that is one, two, three or six months (or, if agreed to by the Lender, twelve
months) thereafter, as specified in the applicable Borrowing Request or Interest Election Request;
provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day, (ii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period and (iii) no Interest Period shall extend beyond the Maturity Date.
For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing
is made and thereafter shall be the effective date of the most recent conversion or continuation of
such Borrowing.
“Interpolated Rate” means, with respect to any Eurodollar Rate Borrowing for any
Interest Period, a rate per annum which results from interpolating on a linear basis between (a) the
applicable Screen Rate for the longest maturity for which a Screen Rate is available that is shorter
than such Interest Period and (b) the applicable Screen Rate for the shortest maturity for which a
Screen Rate is available that is longer than such Interest Period, in each case as of 11:00 a.m.,
London time on the day two Business Days prior to the first day of such Interest Period.
“IPC” means Validus Amalgamation Subsidiary, Ltd., a company organized under
the laws of Bermuda and successor by amalgamation to IPC Holdings, Ltd.
“IPC Facility” means the letters of credit master agreement between IPCRe Limited
and Citibank N.A., providing for letters of credit and any modifications, amendments,
restatements, waivers, extensions, renewals, replacements or refinancings thereof; provided that
any such modifications, amendments, waivers, extensions, renewals, replacements or refinancings
be on terms which, when taken together as a whole, are not adverse in any material respect to the
interests of the Lender, as compared to those contained in the IPC Facility as of the date hereof.
“IPCRe Limited” means IPCRe Limited, a company organized under the laws of
Bermuda.
“IRS” means the Internal Revenue Service, or any Governmental Authority
succeeding to any of its principal functions.
“Junior Subordinated Deferrable Debentures” mean Holdings’s Junior
Subordinated Deferrable Interest Debentures due 2036 issued under the Junior Subordinated
Indenture dated as of June 15, 2006 between Holdings and JPMorgan Chase Bank, National
Association, as Trustee, as the same has been and may be amended from time to time, and any
substantially similarly structured security issued by Holdings or any of its Subsidiaries, including
for the avoidance of doubt Holdings’s Junior Subordinated Deferrable Interest Debentures due
2037 issued under the Junior Subordinated Indenture dated June 21, 2007 between Holdings and
Wilmington Trust Company, as Trustee, Flagstone Reinsurance Holdings Limited’s (now
Flagstone) Junior Subordinated Deferrable Interest Notes due 2036 issued under the Junior
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Subordinated Indenture dated August 23, 2006 between Flagstone Reinsurance Holdings Limited
and JPMorgan Chase Bank, National Association, as Trustee, Flagstone Reinsurance Holdings
Limited’s (now Flagstone) Junior Subordinated Deferrable Interest Notes due 2037 issued under
the Junior Subordinated Indenture dated September 20, 2007 between Flagstone Reinsurance
Holdings Limited and The Bank of New York Trust Company, National Association, as Trustee,
and Flagstone Finance S.A.’s Junior Subordinated Deferrable Interest Notes due 2037 issued under
the Junior Subordinated Indenture dated June 8, 2007 between Flagstone Finance S.A. and
Wilmington Trust Company, as Trustee.
“Legal Requirements” means all applicable laws, rules and regulations and
interpretations thereof made by any governmental body or regulatory authority (including any
Applicable Insurance Regulatory Authority) having jurisdiction over Holdings or a Subsidiary.
“Lender” has the meaning assigned to such term in the Preamble.
“Lender’s Office” means the Lender’s address and, as appropriate, account as set
forth on Schedule 9.01, or such other address or account as the Lender may from time to time
notify to the Borrower.
“Leverage Ratio” means the ratio of (i) Consolidated Indebtedness to
(ii) Consolidated Total Capital.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
“Loan” means a revolving loan by the Lender to the Borrower under Section 2.01.
“Loan Documents” means, collectively, this Agreement and each Fee Letter.
“Loan Parties” means Holdings and the Borrower.
“Margin Stock” means margin stock within the meaning of Regulation U.
“Material Adverse Effect” means any material adverse condition or any material
adverse change in or affecting (x) the business, operations, assets, liabilities or financial condition
of Holdings and its Subsidiaries, taken as a whole, or (y) the rights and remedies of the Lender or
the ability of any Loan Party to perform its obligations to the Lender under this Agreement.
“Maturity Date” means: the earlier of (a) August 6, 2018 and (b) the date of
termination in whole of the Commitment pursuant to the terms hereof.
“Maximum Rate” has the meaning assigned to such term in Section 9.13.
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“Minimum Consolidated Net Worth Amount” means, at any time, an amount which
initially shall be equal to $2,789,131,000 and which amount shall be increased as follows: (i)
immediately following the last day of each fiscal quarter (commencing with the fiscal quarter
ended September 30, 2017) by an amount (if positive) equal to 25% of the Net Income for such
fiscal quarter and (ii) by 50% of the aggregate increases in the consolidated shareholders’ equity
of the Company during such fiscal quarter by reason of the issuance and sale of common Equity
Interests of the Company, including upon any conversion of debt securities of the Company into
such Equity Interests.
“Multiemployer Plan” means any multiemployer plan as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there is an obligation
to contribute of) Holdings, any of its Subsidiaries or any ERISA Affiliate, and each such plan for
the five year period immediately following the latest date on which Holdings, such Subsidiary or
such ERISA Affiliate contributed to or had an obligation to contribute to such plan.
“Net Worth” means, as to any Person, the sum of its capital stock (including its
preferred stock), capital in excess of par or stated value of shares of its capital stock (including 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 amount of the
effects of Financial Accounting Statement No. 115 (which amount is shown on Holdings’
December 31, 2016 balance sheet under the caption “Accumulated other comprehensive income”
and which, after adoption of Financial Accounting Statements Nos. 157 and 159 will be measured
as the difference between investments carried at estimated fair value and investments carried at
amortized cost).
“Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, the Loan Parties arising under any Loan Document or otherwise with respect to any
Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising and including interest and fees that accrue
after the commencement by or against the Borrower or any Affiliate thereof of any proceeding
under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding. Without limiting the
foregoing, the Obligations include (a) the obligation to pay principal, interest, charges, expenses,
fees, indemnities and other amounts payable by the Borrower under any Loan Document and
(b) the obligation of the Borrower to reimburse any amount in respect of any of the foregoing that
the Lender, in each case in its sole discretion, may elect to pay or advance on behalf of the
Borrower.
“OFAC” means the office of Foreign Assets Control of the U.S. Department of
Treasury.
“Other Connection Taxes” means, with respect to the Lender or any other recipient
of any payment to be made by or on account of any obligation of the Loan Parties hereunder or
under any of the other Credit Documents, Taxes imposed as a result of a present or former
connection between such Person and the jurisdiction imposing such Tax (other than connections
arising from such Person having executed, delivered, become a party to, performed its obligations
under, received payments under, received or perfected a security interest under, engaged in any
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other transaction pursuant to or enforced this Agreement, or sold or assigned any Loan or an
interest in any obligation of the Loan Parties under this Agreement).
“Other Taxes” means any and all present or future stamp, registration, court or
documentary taxes or any other similar excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement of, or
performance under, or otherwise in connection with this Agreement other than any Taxes that are
Other Connection Taxes imposed with respect to an assignment.
“Outstanding Amount” means, on any date, the aggregate outstanding principal
amount of Loans after giving effect to any borrowings and prepayments or repayments of thereof,
occurring on such date.
“Participant” has the meaning assigned to such term in Section 9.04(d).
“Participant Register” has the meaning assigned to such term in Section 9.04(d).
“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)).
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined
in ERISA and any successor entity performing similar functions.
“Permitted Subsidiary Indebtedness” means:
(a) Indebtedness of the Borrower or any other Subsidiary of Holdings under
this Agreement or existing on the date hereof and listed on Schedule 3.14 and extensions, renewals
and replacements of any such Indebtedness, provided that such extending, renewal or replacement
Indebtedness (i) shall not be Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or replaced, (ii) shall not be in a principal amount that
exceeds the principal amount of the Indebtedness being extended, renewed or replaced (plus any
accrued but unpaid interest and redemption premium payable by the terms of such Indebtedness
thereon and reasonable refinancing or renewal fees, costs and expenses), (iii) shall not have an
earlier maturity date or shorter weighted average life than the Indebtedness being extended,
renewed or replaced and (iv) shall be subordinated to the Indebtedness incurred hereunder on terms
(if any) at least as favorable to the Lender as the Indebtedness being extended, renewed or replaced;
(b) Indebtedness of the Borrower or any other Subsidiary of Holdings incurred
in the ordinary course of business in connection with any Capital Markets Product that are not
entered into for speculative purposes;
(c) Indebtedness owed by Subsidiaries of Holdings to Holdings or any of its
Subsidiaries;
(d) Indebtedness of the Borrower or any other Subsidiary of Holdings incurred
to finance the acquisition, construction or improvement of any fixed or capital assets, including
Capital Lease Obligations and any Indebtedness assumed by the Borrower or any other Subsidiary
of Holdings in connection with the acquisition of any such assets or secured by a Lien on any such
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assets prior to the acquisition thereof, provided that (i) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this clause (d) shall not exceed
$10,000,000 at any time outstanding;
(e) Indebtedness of the Borrower or any other Subsidiary of Holdings in respect
of letters of credit issued to reinsurance cedents, or to lessors of real property in lieu of security
deposits in connection with leases of the Borrower or any other Subsidiary of Holdings, in each
case in the ordinary course of business;
(f) Indebtedness of the Borrower or any other Subsidiary of Holdings incurred
in the ordinary course of business in connection with workers’ compensation claims, self-insurance
obligations, unemployment insurance or other forms of governmental insurance or benefits and
pursuant to letters of credit or other security arrangements entered into in connection with such
insurance or benefit; and
(g) Indebtedness under the Five-Year Secured Letter of Credit Facility and the
Five-Year Unsecured Revolving Credit Facility;
(h) Indebtedness representing installment insurance premiums owing by the
Borrower or any other Subsidiary of Holdings in the ordinary course of business in respect of the
liability insurance, casualty insurance or business interruption insurance maintained by the
Borrower or any other Subsidiary of Holdings, in each case in respect of their properties and assets
(but excluding, for the avoidance of doubt, any insurance or reinsurance provided or obtained by
the Borrower or any other Subsidiary of Holdings in connection with performing its Insurance
Business or managing risk in respect thereof);
(i) Acquired Indebtedness of the Borrower and other Subsidiaries of Holdings
in an aggregate principal amount not exceeding $250,000,000 at any time outstanding;
(j) without duplication, additional Indebtedness of the Borrower and other
Subsidiaries of Holdings not otherwise permitted under clauses (a) through (i) of this definition
which, when added to the aggregate amount of all Liens (other than with respect to Indebtedness
incurred pursuant to this clause (j)) incurred by Holdings pursuant to Section 6.03(w), shall not
exceed at any time outstanding 10% of Consolidated Net Worth at the time of incurrence of any
new Indebtedness under this clause (j); provided that immediately after giving effect (including
pro forma effect) to the incurrence of any Indebtedness pursuant to this clause (j), no Event of
Default shall have occurred and be continuing;
(k) Indebtedness arising from Guarantees made by the Borrower or any
Subsidiary of Holdings of the type described in the definition hereof;
(l) Indebtedness of the Borrower or any Subsidiary of Holdings in connection
with the Junior Subordinated Deferrable Debentures, including the sale, assignment or transfer of
such Indebtedness among the Borrower and other Subsidiaries of Holdings; and
(m) Indebtedness of Validus Holdings (UK) plc created in connection with its
acquisition of Validus Reinsurance (Switzerland) Ltd.
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“Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any pension plan as defined in Section 3(2) of ERISA and subject to
Title IV of ERISA, which is maintained or contributed to by (or to which there is an obligation to
contribute of) Holdings or any of its Subsidiaries or any of their ERISA Affiliates, and each such
plan for the five year period immediately following the latest date on which Holdings, any of its
Subsidiaries or any of their ERISA Affiliates maintained, contributed to or had an obligation to
contribute to such plan.
“Policies” means all insurance policies, annuity contracts, guaranteed interest
contracts and funding agreements (including riders to any such policies or contracts, certificates
issued with respect to group life insurance or annuity contracts and any contracts issued in
connection with retirement plans or arrangements) and assumption certificates issued or to be
issued (or filed pending current review by applicable Governmental Authorities) by any Regulated
Insurance Company and any coinsurance agreements entered into or to be entered into by any
Regulated Insurance Company.
“Preferred Securities” means any preferred Equity Interests (or capital stock) of any
Person that has preferential rights with respect to dividends or redemptions or upon liquidation or
dissolution of such Person over shares of common Equity Interests (or capital stock) of any other
class of such Person.
“Prepayment Notice” means a notice by the Borrower to prepay Loans, which,
when in writing, shall be substantially in the form of Exhibit D (or such other form as the Lender
may approve).
“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as
the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest
per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical
Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no
longer quoted therein, any similar rate quoted therein (as determined by the Lender) or any similar
release by the Federal Reserve Board (as determined by the Lender).
“Private Act” means separate legislation enacted in Bermuda with the intention that
such legislation apply specifically to the Borrower, in whole or in part.
“Protected Cell Company” means a Subsidiary that has created segregated accounts
pursuant to the provisions of the Segregated Account Companies Act 2000 of Bermuda.
“Register” has the meaning assigned to such term in Section 9.04(c).
“Regulated Insurance Company” means any Subsidiary of Holdings, whether now
owned or hereafter acquired, that is authorized or admitted to carry on or transact Insurance
Business in any jurisdiction (foreign or domestic) and is regulated by any Applicable Insurance
Regulatory Authority.
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“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from
time to time and all official rulings and interpretations thereunder or thereof.
“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from
time to time and all official rulings and interpretations thereunder or thereof.
“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from
time to time and all official rulings and interpretations thereunder or thereof.
“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from
time to time and all official rulings and interpretations thereunder or thereof.
“Reinsurance Agreement” means any agreement, contract, treaty, certificate or
other arrangement whereby any Regulated Insurance Company agrees to transfer, cede or
retrocede to another insurer or reinsurer all or part of the liability assumed or assets held by such
Regulated Insurance Company under a policy or policies of insurance issued by such Regulated
Insurance Company or under a reinsurance agreement assumed by such Regulated Insurance
Company.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisers of such Person and
such Person’s Affiliates.
“Restricted Margin Stock” means Margin Stock owned by Holdings or any of its
Subsidiaries the value of which (determined as required under clause 2(i) of the definition of
“Indirectly Secured” set forth in Regulation U) represents not more than 33% of the aggregate
value (determined as required under clause (2)(i) of the definition of “Indirectly Secured” set forth
in Regulation U), on a consolidated basis, of the property and assets of Holdings and its
Subsidiaries (excluding any Margin Stock) that is subject to the provisions of Sections 6.02 and
6.03.
“Retrocession Agreement” means any agreement, contract, treaty or other
arrangement whereby one or more insurers or reinsurers, as retrocessionaires, assume liabilities of
reinsurers under a Reinsurance Agreement or other retrocessionaires under another Retrocession
Agreement.
“S&P” means S&P Global Ratings, a division of S&P Global Inc., and any
successor to its rating agency business.
“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any comprehensive Sanctions (at the time of this Agreement, Crimea,
Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-
related list of designated Persons maintained by OFAC, the U.S. Department of State, the United
Nations Security Council, the European Union, Her Majesty’s Treasury of the United Kingdom or
other relevant and applicable sanctions authority, (b) any Person located, organized or resident in
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a Sanctioned Country or (c) any Person owned 50% or more or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b).
“Sanctions” means all economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including those
administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council,
the European Union, Her Majesty’s Treasury of the United Kingdom or other relevant and
applicable sanctions authority.
“SAP” means, with respect to any Regulated Insurance Company, the statutory
accounting principles and accounting procedures and practices prescribed or permitted by the
Applicable Insurance Regulatory Authority of the state or jurisdiction in which such Regulated
Insurance Company is domiciled; it being understood and agreed that determinations in
accordance with SAP for purposes of Article VII, including defined terms as used therein, are
subject (to the extent provided therein) to Section 1.03.
“Screen Rate” means with respect to the Eurodollar Rate for any Interest Period,
the London interbank offered rate administered by ICE Benchmark Administration Limited (or
any other person which takes over administration of that rate) for Dollars and the relevant Interest
Period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement
Reuters page which displays that rate). If such page or service ceases to be available, the Lender
may specify another page or service, displaying the relevant rate after consultation with the
Borrower; provided that, in the event such rate does not appear on a page of the Reuters screen, on
the appropriate page of such other information service that publishes such rate as shall be selected
by the Lender from time to time in its reasonable discretion. If, as to any currency, no Screen Rate
shall be available for a particular Interest Period but Screen Rates shall be available for maturities
both longer and shorter than such Interest Period, then the Screen Rate for such Interest Period
shall be the Interpolated Rate. Notwithstanding the foregoing, if the Screen Rate, determined as
provided above, would otherwise be less than zero, then the Screen Rate shall be deemed to be
zero for all purposes.
“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
“Service of Process Agent” means CT Corporation Systems, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
“Significant Insurance Subsidiary” means a Regulated Insurance Company which
is also a Significant Subsidiary.
“Significant Subsidiary” means the Borrower, each Subsidiary of other Holdings
that either (i) as of the end of the most recently completed fiscal year of Holdings for which audited
financial statements are available, has assets that exceed 10% of the total consolidated assets of
Holdings and all of its Subsidiaries as of the last day of such period or (ii) for the most recently
completed fiscal year of Holdings for which audited financial statements are available, has
revenues that exceed 10% of the consolidated revenue of Holdings and all of its Subsidiaries for
such period; provided that, if at any time the aggregate amount of the total consolidated assets of
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Holdings and all of its Subsidiaries or the consolidated revenue of Holdings and all of its
Subsidiaries attributable to Subsidiaries that are not Significant Subsidiaries exceeds 15% of the
total consolidated assets of Holdings and all of its Subsidiaries as of the end of any such fiscal year
or 15% of the consolidated revenue of Holdings and all of its Subsidiaries for any such fiscal
quarter, Holdings (or, in the event Holdings has failed to do so within ten days, the Lender) shall
designate sufficient Subsidiaries as “Significant Subsidiaries” to eliminate such excess, and such
designated Subsidiaries shall for all purposes of this Agreement constitute Significant Subsidiaries.
“Solvent” means, with respect to any Person on a particular date, that on such date
(a) the amount of the “present fair saleable value” of each of the business and assets of such Person
will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”,
as of such date, as such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value
of each of the business and assets of such Person is greater than the amount that will be required
to be paid on or in respect of the probable “liability” on the existing debts and other “liabilities
contingent or otherwise” of such Person, (c) the assets of such Person do not constitute
unreasonably small capital for such Person to carry out its business as now conducted and as
proposed to be conducted including the capital needs of such Person, taking into account the
particular capital requirements of the business conducted by such Person and projected capital
requirements and capital availability thereof, (d) such Person does not intend to incur debts beyond
their ability to pay such debts as they mature (taking into account the timing and amounts of cash
to be received by such Person, and of amounts to be payable on or in respect of debt of such Person)
and (e) such Person does not believe that final judgments against such Person in actions for money
damages presently pending will be rendered at a time when, or in an amount such that, they will
be unable to satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered) and such Person believes that its cash
flow, after taking into account all other anticipated uses of the cash of such Person (including the
payments on or in respect of debt referred to in paragraph (d) of this definition), will at all times
be sufficient to pay all such judgments promptly in accordance with their terms. For purposes of
this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (A) right to
payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
“Statutory Statements” means, with respect to any Regulated Insurance Company
for any fiscal year, the annual or quarterly financial statements of such Regulated Insurance
Company as required to be filed with the Insurance Regulatory Authority of its jurisdiction of
domicile and in accordance with the laws of such jurisdiction, together with all exhibits, schedules,
certificates and actuarial opinions required to be filed or delivered therewith.
“Subsidiary” means any subsidiary of Holdings.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
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ARTICLE II
COMMITMENTS AND CREDIT EXTENSIONS
SECTION 2.01 Revolving Commitment. Subject to and upon the terms and conditions
herein set forth, the Lender agrees, at any time and from time to time during the Availability Period,
to make a loan or loans (each, a “Loan” and, collectively, the “Loans”) to the Borrower, which
Loans (i) may be made and maintained only in Dollars; (ii) may be repaid and reborrowed in
accordance with the provisions hereof; (iii) except as hereinafter provided, may, at the option of
the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that all Loans made as part of the same Borrowing shall, unless otherwise
specified herein, consist of Loans of the same Type; and (iv) shall not be made (and shall not be
required to be made) by the Lender if the making of same would cause the aggregate Outstanding
Amount of the Loans to exceed the Lender’s Commitment as then in effect.
SECTION 2.02 Loans and Borrowings.
(a) Type of Loans. Subject to Section 2.16, each Borrowing shall be comprised
entirely of Base Rate Loans or Eurodollar Rate Loans as the Borrower may request in accordance
herewith. The Lender at its option may make any Eurodollar Rate Loan by causing any domestic
or foreign branch or Affiliate of the Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Eurodollar Rate Loan in
accordance with the terms of this Agreement.
(b) Minimum Amounts; Limitation on Number of Borrowings. Each
Eurodollar Rate Borrowing shall be in an aggregate amount of $5,000,000 or a larger multiple of
$100,000. Each Base Rate Borrowing shall be in an aggregate amount equal to $1,000,000 or a
larger multiple of $100,000; provided that a Base Rate Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the Commitment. Borrowings of more than one Type
may be outstanding at the same time; provided that there shall not be more than a total of 10
Eurodollar Rate Borrowings outstanding at any time.
SECTION 2.03 Borrowing Requests.
(a) Notice by Borrower. Each Borrowing shall be made upon the Borrower’s
irrevocable notice to the Lender. Each such notice shall be in the form of a written Borrowing
Request, appropriately completed and signed by an Authorized Officer of the Borrower and must
be received by the Lender not later than 11:00 a.m. (New York City time) (i) in the case of a
Eurodollar Rate Borrowing, three Business Days prior to the date of the requested Borrowing or
(ii) in the case of a Base Rate Borrowing, one Business Day prior to the date of the requested
Borrowing.
(b) Content of Borrowing Requests. Each Borrowing Request pursuant to this
Section shall specify the following information in compliance with Section 2.02: (i) the aggregate
amount of the requested Borrowing; (ii) the date of such Borrowing (which shall be a Business
Day); (iii) whether such Borrowing is to be a Base Rate Borrowing or Eurodollar Rate Borrowing;
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(iv) in the case of a Eurodollar Rate Borrowing, the Interest Period therefor; and (v) the location
and number of the Borrower’s account to which funds are to be disbursed.
(c) Failure to Elect. If no election as to the Type of a Borrowing is specified in
the applicable Borrowing Request, then the requested Borrowing shall be a Base Rate Borrowing.
If no Interest Period is specified with respect to any requested Eurodollar Rate Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month’s duration.
SECTION 2.04 Funding of Borrowings. The Lender shall make the amount of each
Borrowing available to the Borrower in immediately available funds not later than 12:00 noon
(New York City time) on the proposed date thereof, by wire transfer of such funds in accordance
with the instructions provided in the applicable Borrowing Request.
SECTION 2.05 Interest Elections.
(a) Elections by Borrower for Borrowings. The Loans comprising each
Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Rate Borrowing, shall have the Interest Period specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a
different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of
a Eurodollar Rate Borrowing, may elect the Interest Period therefor, all as provided in this
Section 2.05. The Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) Notice of Elections. Each such election pursuant to this Section shall be
made upon the Borrower’s irrevocable notice to the Lender. Each such notice shall be in the form
of a written Interest Election Request, appropriately completed and signed by an Authorized
Officer of the Borrower and must be received by the Lender not later than the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the
Type resulting from such election to be made on the Closing Date of such election.
(c) Content of Interest Election Requests. Each Interest Election Request
pursuant to this Section shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing or
Eurodollar Rate Borrowing; and
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(ii) Without limiting the generality of the foregoing, in the event that any Loan
Party is a U.S. Person, or, if not a U.S. Person, upon and Loan Party’s request,
(A) if the Lender is a U.S. Person, it shall deliver to such Loan Party on or
prior to the date on which the Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the reasonable request of such Loan Party),
executed originals of IRS Form W-9 certifying that the Lender is exempt from U.S.
federal backup withholding tax;
(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to such Loan Party (in such number of copies as shall be requested) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of such
Loan Party), whichever of the following is applicable:
(1) in the case of a Foreign Lender claiming the benefits of an
income tax treaty to which the United States is a party (x) with respect to payments
of interest under any Credit Document, executed originals of IRS Form W-8BEN
or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such
tax treaty and (y) with respect to any other applicable payments under any Credit
Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable,
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed originals of IRS Form W-8ECI;
(3) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit E-1 to the effect that such Foreign Lender is not
a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of such Loan Party within the meaning of Section 881(c)(3)(B) of the
Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable; or
(4) to the extent a Foreign Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN or IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate
substantially in the form of Exhibit E-2 or Exhibit E-3, IRS Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided that if
the Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form of
Exhibit E-4 on behalf of each such direct and indirect partner; and
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(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to such Loan Party (in such number of copies as shall be requested) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of such
Loan Party), executed originals of any other form prescribed by applicable law as
a basis for claiming exemption from or a reduction in U.S. federal withholding Tax,
duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit such Loan Party to determine the
withholding or deduction required to be made.
The Lender agrees that if any form or certification it previously delivered expires or becomes
obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify
the Loan Parties in writing of its legal inability to do so.
(f) If the Lender determines, in its sole discretion exercised in good faith, that it is
entitled to claim or receive a refund from a Governmental Authority in respect of Indemnified
Taxes or Other Taxes paid by any Loan Party pursuant to this Section 2.11, the Lender shall
promptly notify such Loan Party of the availability of such refund claim and, if the Lender
determines, in its sole discretion exercised in good faith, that making a claim for refund will not
have an adverse effect on its Taxes or business operations, shall, within 60 days after receipt of a
request by such Loan Party and at the Holdings’ expense, make a claim to such Governmental
Authority for such refund. If the Lender determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party
or with respect to which any Loan Party has paid additional amounts pursuant to this Section 2.11,
it shall pay over such refund to such Loan Party (but only to the extent of indemnity payments
made, or additional amounts paid, by such Loan Party under this Section 2.11 with respect to the
Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of
such Loan Party incurred in obtaining such refund and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund); provided that such Loan
Party, upon the request of the Lender, agrees to repay the amount paid over to such Loan Party
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to
the Lender in the event the Lender is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this Section 2.11(f) in no event will the
Lender be required to pay any amount to an indemnifying party pursuant to this Section 2.11(f)
the payment of which would place the Lender in a less favorable net after-Tax position than it
would have been in if the Tax subject to indemnification and giving rise to such refund had not
been deducted, withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid. This Section shall not be construed to
require the Lender to make available its Tax returns (or any other information relating to its Taxes
which it deems confidential) to any Loan Party or any other Person.
(g) If a payment made to the Lender under this Agreement or any Credit Document
would be subject to U.S. Federal withholding Tax imposed by FATCA if the Lender were to fail
to comply with the applicable reporting requirements of FATCA (including those contained in
Section 1471(b) or 1472(b) of the Code, as applicable), the Lender shall deliver to the applicable
Loan Party at the time or times prescribed by law and at such time or times reasonably requested
by the Borrower such documentation prescribed by applicable law (including as prescribed by
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Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by
such Loan Party as may be necessary for such Loan Party to comply with its obligations under
FATCA and to determine that the Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this Section 2.11(g), “FATCA” shall include any amendments made to FATCA after
the date of this Agreement.
(h) For purposes of this Section 2.11, the term “applicable law” includes FATCA.
SECTION 2.12 Payments Generally.
(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or of amounts payable under Section 2.06 or 2.11 or otherwise)
prior to 12:00 noon (or, in the case of any prepayment or repayment in full of all outstanding
Loans, 2:00 p.m.), New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim in Dollars. Any amounts received after such time on any date may,
in the discretion of the Lender, be deemed to have been received on the next succeeding Business
Day for purposes of calculating interest thereon. All such payments shall be made to the Lender
at the Lender’s Office. If any payment hereunder shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding Business Day, and, in the case of
any payment accruing interest, interest thereon shall be payable for the period of such extension.
(b) If at any time insufficient funds are received by and available to the Lender
to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder, and (ii) second, towards
payment of principal then due hereunder.
SECTION 2.13 Mitigation Obligations. If the Lender requests compensation under
Section 2.06, or if any Loan Party is required to pay any additional amount to the Lender or any
Governmental Authority for the account of the Lender pursuant to Section 2.06 or Section 2.11, or
the Lender determines it can no longer make or maintain Eurodollar Rate Loans pursuant to
Section 2.18, then the Lender shall use reasonable efforts to designate a different lending office
for funding its Loans hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of the Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.06 or 2.11, as the case may
be, in the future, or mitigate the impact of Section 2.18 and (ii) would not subject the Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous to the Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by the Lender in
connection with any such designation or assignment.
SECTION 2.14 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the Lender the
then unpaid principal amount of all Loans on the Maturity Date.
(b) The Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to the Lender resulting from each Loan,
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including the amounts of principal and interest payable and paid to the Lender from time to time
hereunder.
(c) The entries made in the accounts maintained pursuant to paragraph (b) of
this Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of the Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the
terms of this Agreement.
SECTION 2.15 Voluntary Prepayment of Loans.
(a) The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, without premium or penalty, except as provided in
Section 2.17, subject to prior notice in accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Lender by telephone (confirmed a written
Prepayment Notice, appropriately completed and signed by an Authorized Officer of the
Borrower) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Rate
Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date
of prepayment or (ii) in the case of prepayment of a Base Rate Borrowing, not later than 12:00
noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable
(unless given in connection with a Conditional Termination Notice, as set forth in Section 2.07, in
which case, subject to Section 2.17, such notice of prepayment may be revoked if such Conditional
Termination Notice is revoked in accordance with Section 2.07) and shall specify the prepayment
date, the Borrowing or Borrowings which are to be prepaid and the principal amount of each
Borrowing or portion thereof to be prepaid. Each partial prepayment of any Borrowing shall be in
an amount that would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.09.
SECTION 2.16 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Rate Borrowing:
(a) the Lender reasonably determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Lender reasonably determines that the Eurodollar Rate for such Interest
Period will not adequately and fairly reflect the cost to the Lender of making or maintaining its
Loan included in such Borrowing for such Interest Period;
then the Lender shall give notice thereof to the Borrower by telephone (followed by written or
facsimile notice) or facsimile or in writing as promptly as practicable thereafter and, until the
Lender notifies the Borrower that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Rate Borrowing shall be ineffective and (ii) if
any Borrowing Request requests a Eurodollar Rate Borrowing, such Borrowing shall be made as
a Base Rate Borrowing.
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SECTION 3.02 Corporate Power and Authority. Each Loan Party has the corporate power
and authority to execute, deliver and carry out the terms and provisions of this Agreement and has
taken all necessary corporate action to authorize the execution, delivery and performance of this
Agreement. Each Loan Party has duly executed and delivered this Agreement and this Agreement
constitutes the legal, valid and binding obligation of each Loan Party enforceable against each
Loan Party in accordance with its terms, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’
rights generally and general principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
SECTION 3.03 No Contravention of Agreements or Organizational Documents. Neither
the execution, delivery and performance by any Loan Party of this Agreement nor compliance with
the terms and provisions hereof, nor the consummation of the transactions contemplated herein,
(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 any Loan Party 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 any Loan Party 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
Holdings or any of its Subsidiaries, except to the extent that, in the case of each of the immediately
preceding clauses (i) and (ii), would reasonably be expected to have a Material Adverse Effect.
SECTION 3.04 Litigation and Environmental Matters. There are no actions, suits or
proceedings pending or, to the best knowledge of Holdings or any of its Significant Subsidiaries,
threatened involving Holdings or any of its Subsidiaries (including with respect to this Agreement)
that, either individually or in the aggregate, have had, or would reasonably be expected to have, a
Material Adverse Effect. Except for any matters that, either individually or in the aggregate, have
not had, and would not reasonably be expected to have, a Material Adverse Effect, neither
Holdings nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
SECTION 3.05 Use of Proceeds; Margin Regulations.
(a) All proceeds of the Loans shall be utilized for the general corporate
(including acquisitions) and working capital purposes of the Borrower.
(b) Neither the making of any Loan hereunder nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulation T, U or X and, to the extent
such use entails a violation of the provisions of Regulations T, U or X, no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock.
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(b) Anti-Corruption Laws and Sanctions. Holdings has implemented and
maintains in effect policies and procedures reasonably designed to promote compliance in all
material respects by Holdings, its Subsidiaries and their respective directors, officers and
employees with Anti-Corruption Laws and applicable Sanctions, and Holdings, its Subsidiaries
and to the knowledge of Holdings, their respective officers, directors and employees, are in
compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and, in
the case of any Loan Party, is not knowingly engaged in any activity that could reasonably be
expected to result in such Loan Party being designated as a Sanctioned Person. None of (a)
Holdings, any Subsidiary or to the knowledge of Holdings or such Subsidiary and any of their
respective directors, officers or employees, or (b) to the knowledge of Holdings, any agent of
Holdings or any Subsidiary that will act in any capacity in connection with or benefit from the
credit facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds or other
Transactions will violate any Anti-Corruption Law or applicable Sanctions.
ARTICLE IV
CONDITIONS
SECTION 4.01 Closing Date. The obligation of the Lender to make Borrowings
hereunder is subject to the satisfaction (or waiver in accordance with Section 9.02) of the following
conditions:
(a) On or prior to the Closing Date, (i) each Loan Party and the Lender shall
have signed a copy hereof (whether the same or different copies).
(b) On the Closing Date, the Lender shall have received (i) an opinion, in form
and substance reasonably satisfactory to the Lender, addressed to the Lender and dated the Closing
Date, from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special New York counsel to the Loan
Parties and (ii) an opinion, in form and substance reasonably satisfactory to the Lender, addressed
to the Lender and dated the Closing Date, from Xxxxxxx, special Bermuda counsel to the Loan
Parties.
(c) (i) On the Closing Date, the Lender shall have received from each Loan
Party, a certificate, dated the Closing Date, signed by an Authorized Officer of such Loan Party,
and attested to by the Secretary or any Assistant Secretary of such Loan Party, together with
(x) copies of its certificate of incorporation, by-laws or other organizational documents and (y) the
resolutions of the board of directors of such Loan Party relating to this Agreement which shall be
satisfactory to the Lender; (ii) On or prior to the Closing Date, all corporate and legal proceedings
and all instruments and agreements in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to the Lender, and the Lender
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 Lender reasonably may have
requested in connection therewith, such documents and papers where appropriate to be certified
by proper corporate or governmental authorities.
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(d) The Lender shall have received evidence reasonably satisfactory to it that
since December 31, 2016, nothing shall have occurred or become known to the Lender which,
either individually or in the aggregate, has had, or would reasonably be expected to have, a
Material Adverse Effect.
(e) The Lender shall have received evidence reasonably satisfactory to it that
on the Closing Date, no actions, suits or proceedings by any entity (private or governmental) shall
be pending against Holdings or any of its Significant Subsidiaries (i) with respect to this
Agreement or the Transaction or (ii) which, either individually or in the aggregate, has had, or
would reasonably be expected to have, a Material Adverse Effect.
(f) The Lender shall have received evidence reasonably satisfactory to it that
on the Closing Date, all governmental and third party approvals, permits and licenses required to
be obtained in connection with the Transaction on or prior to the Closing Date shall have been
obtained and remain in full force and effect.
(g) The Lender shall have received evidence reasonably satisfactory to it that
on the Closing Date, Holdings and its Significant Subsidiaries shall have no outstanding preferred
stock or Hybrid Capital or Indebtedness for borrowed money except preferred stock or Hybrid
Capital or Indebtedness set forth on Schedule 3.14 or set forth on the balance sheet referred to in
Section 3.09(a).
(h) The Lender shall have received evidence reasonably satisfactory to it that
on the Closing Date, there shall exist no Default or Event of Default, and all representations and
warranties made by each Loan Party contained herein shall be true and correct in all material
respects (or, in the case of any representation or warranty qualified by materiality or Material
Adverse Effect, in all respects) (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
(i) The Lender shall have received evidence reasonably satisfactory to it that
on the Closing Date, each Significant Insurance Subsidiary (other than Talbot 2002 Underwriting
Capital Ltd., AlphaCat Reinsurance Ltd. and Validus Holdings (UK) Plc) shall have an A.M. Best
financial strength rating of at least “A-”.
(j) On the Closing Date, Holdings shall have paid the Lender all fees,
reasonable out-of-pocket expenses (including legal fees and expenses of the Lender) and other
compensation, in each case, to the extent invoiced and due and payable on or prior to the Closing
Date.
(k) On the Closing Date, the Lender shall have received a letter from the
Service of Process Agent, presently located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
indicating its consent to its appointment by each Loan Party as its agent to receive service of
process as specified in this Agreement is in full force and effect and applies to this Agreement in
all respects.
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merger, no Default shall have occurred and be continuing, (ii) any Subsidiary may merge,
consolidate or amalgamate with or into another Person, if (x) such Subsidiary survives (or, in the
case of an amalgamation, continues immediately following) such merger, consolidation or
amalgamation and (y) immediately after giving effect to such merger, consolidation or
amalgamation, no Default shall have occurred and be continuing, (iii) Wholly-Owned Subsidiaries
of Holdings (other than the Borrower) may merge, consolidate or amalgamate with one another
and (iv) a Subsidiary of Holdings (other than the Borrower) may merge, consolidate or amalgamate
with any other Person if immediately after giving effect to such merger no Default shall have
occurred and be continuing. In addition, Holdings will not, nor will it permit any of its Subsidiaries
to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible (each, a “Disposition”) (other
than Unrestricted Margin Stock), except (a) (1) such dispositions by Holdings or any of its
Subsidiaries of any of their respective properties or assets to Holdings or any Subsidiary of
Holdings and (2) such dispositions by IPC or any of its Subsidiaries of any of their respective
properties or assets to IPC or any of its other Subsidiaries; (b) subject to Section 5.05, the
dissolution, liquidation or winding up of any Subsidiary (other than the Borrower); (c) Dispositions
of used, worn out, obsolete or surplus property of Holdings or any Subsidiary in the ordinary course
of business and the assignment, cancellation, abandonment or other disposition of intellectual
property that is, in the reasonable judgment of Holdings, no longer economically practicable to
maintain or useful in the conduct of the business of Holdings and the Subsidiaries, taken as a
whole; (d) licenses (as licensor) of intellectual property so long as such licenses do not materially
interfere with the business of Holdings or any of its Subsidiaries, taken as a whole; (e) Dispositions
of cash, cash equivalents and investment securities (including pursuant to any securities lending
arrangements permitted by clause (u) of Section 6.03 and including in connection with the posting
of collateral (or the realization thereof) under the Five-Year Secured Letter of Credit Facility, the
IPC Facility or any other secured Indebtedness permitted hereunder); (f) releases, surrenders or
waivers of contracts, torts or other claims of any kind as a result of the settlement of any litigation
or threatened litigation; (g) the granting or existence of Liens permitted under this Agreement; (h)
licenses, sublicenses, leases or subleases of property so long as such licenses, sublicenses, leases
or subleases do not materially interfere with the business of Holdings and its Subsidiaries, taken
as a whole; (i) Dividends permitted under Section 6.08; (j) ceding of insurance or reinsurance in
the ordinary course of business; (k) other Dispositions of assets with a fair market value (as
reasonably determined by the board of directors or senior management of Holdings) which in the
aggregate do not exceed 10% of the lesser of the book or fair market value of the property and
assets of Holdings determined on a consolidated basis as of the last day of the previous fiscal year
of Holdings; provided that immediately after giving effect (including pro forma effect) to any
Disposition made pursuant to this clause (k), no Event of Default under Section 7.01(c) relating
solely to a breach of Section 6.10 shall have occurred and be continuing; (l) dispositions of
property as a result of a casualty event involving such property or any disposition of real property
to a Governmental Authority as a result of a condemnation of such real property; (m) sales or other
Dispositions of non-core assets acquired in an acquisition permitted under this agreement;
provided that such sales shall be consummated within 360 days of such acquisition; and (n) any
Disposition of property or series of related Dispositions of or in respect of which the fair market
value of such property and the consideration payable to Holdings or any of its Subsidiaries is equal
to or less than $100,000.
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(j) Licenses, sublicenses, leases, or subleases granted to other Persons not
materially interfering with the conduct of the business of Holdings or any of its Subsidiaries;
(k) easements, rights-of-way, restrictions, encroachments and other similar
charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and
not materially interfering with the conduct of the business of Holdings or any of its Subsidiaries;
(l) Liens arising out of the existence of judgments or awards not constituting
an Event of Default under Section 7.01(g);
(m) Liens (other than Liens imposed under ERISA) incurred in the ordinary
course of business in connection with workers compensation claims, unemployment insurance and
social security benefits and Liens securing the performance of bids, reinsurance obligations,
tenders, leases and contracts in the ordinary course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in the ordinary course of
business (exclusive of obligations in respect of payment for borrowed money);
(n) bankers’ Liens, rights of setoff and other similar Liens existing solely with
respect to cash and cash equivalents on deposit in one or more accounts maintained by Holdings
or any of its Subsidiaries, in each case granted in the ordinary course of business in favor of the
bank or banks with which such accounts are maintained;
(o) Liens arising out of the refinancing, replacement, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the clauses of this
Section 6.03, provided that such Indebtedness is not increased (other than with respect to unpaid
accrued interest and premium thereon, any committed or undrawn amounts and underwriting
discounts, fees, commissions and expenses, associated with such Indebtedness) and is not secured
by any additional assets;
(p) Liens created pursuant to the Five-Year Secured Letter of Credit Facility
(including the security documents thereunder) and (ii) Liens created to cash collateralize a
Defaulting Lender’s Letter of Credit Outstandings pursuant to Section 2.26 of the Five-Year
Unsecured Revolving Credit Facility;
(q) Liens in respect of property or assets of any Subsidiary of Holdings securing
Indebtedness of the type described in clause (e) of the definition of “Permitted Subsidiary
Indebtedness”;
(r) Liens in respect of property or assets of any Subsidiary of Holdings securing
Indebtedness of the type described in clause (h) of the definition of “Permitted Subsidiary
Indebtedness”; provided that (i) the aggregate amount of such Liens (measured, as to each such
Lien permitted under this clause (r), as the greater of the amount secured by such Lien and the fair
market value at such time of the assets subject to such Lien) shall not, when added to the aggregate
amount of all Liens (measured as set forth in this clause (r) above) incurred pursuant to
Section 6.03(w) and the aggregate amount of outstanding unsecured Indebtedness of Subsidiaries
incurred pursuant to clause (j) of the definition of “ Permitted Subsidiary Indebtedness”, exceed at
any time 10% of Consolidated Net Worth at the time of incurrence of any new Liens under this
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clause (r) and (ii) immediately after giving effect to the incurrence of any Lien pursuant to this
Section 6.03(r), no Event of Default shall have occurred and be continuing;
(s) Liens on assets received by or of Holdings or its Subsidiaries and held in
trust in respect of, or deposited or segregated to secure, liabilities assumed in the course of the
reinsurance business or under any Insurance Contracts, Reinsurance Agreements, Fronting
Arrangements or other indemnity arrangements entered in the ordinary course of business;
(t) Liens not securing indebtedness for borrowed money on cash and securities
arising in the ordinary course of business in connection with the structured risk insurance and
reinsurance product lines of Holdings and its Subsidiaries;
(u) Liens arising in connection with securities lending arrangements entered
into by Holdings or any of its Subsidiaries with financial institutions in the ordinary course of
business so long as any securities subject to any such securities lending arrangement do not
constitute Collateral as defined in the Five-Year Secured Letter of Credit Facility;
(v) Liens on insurance policies and the proceeds thereof securing Indebtedness
permitted by clause (h) of the definition of “ Permitted Subsidiary Indebtedness”;
(w) without duplication of the Liens described in clauses (a) through (v) above
and clauses (x) through (dd) below, additional Liens securing obligations of Holdings; provided
that (i) the aggregate amount of such Liens (measured, as to each such Lien permitted under this
clause (w), as the greater of the amount secured by such Lien and the fair market value at such
time of the assets subject to such Lien) shall not, when added to the aggregate amount of all Liens
(measured as set forth in this clause (w) above) incurred pursuant to Section 6.03(r) and the
aggregate amount of outstanding unsecured Indebtedness of Subsidiaries incurred pursuant to
clause (j) of the definition of “ Permitted Subsidiary Indebtedness”, exceed at any time 10% of
Consolidated Net Worth at the time of incurrence of any new Liens under this clause (w) and (ii)
immediately after giving effect to the incurrence of any Lien pursuant to this Section 6.03(w), no
Event of Default shall have occurred and be continuing;
(x) Liens on assets arising in connection with the sale or transfer of such assets
in a transaction permitted under Section 6.02 and customary rights and restrictions contained in
agreements relating to such sale or transfer pending the completion thereof;
(y) Liens arising in the case of any joint venture, any put and call arrangements
related to its Equity Interests set forth in its organizational documents or any related joint venture
or similar agreement;
(z) Liens in respect of any interest or title of a lessor under any lease or sublease
entered into by Holdings or any Subsidiary in the ordinary course of its business and other statutory
and common law landlords’ liens under leases;
(aa) Liens arising in connection with any interest or title of a licensor under any
license or sublicense entered into by Holdings or any Subsidiary as a licensee or sublicensee (A)
existing on the date hereof or (B) in the ordinary course of its business;
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or overnight courier service, mailed by certified or registered mail or sent by facsimile to the
applicable party hereto, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as provided in
Schedule 9.01. Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when received; notices
and other communications sent by facsimile shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be deemed to have been
given at the opening of business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent provided in
paragraph (b) below shall be effective as provided therein.
(b) Electronic Communications. Notices and other communications to the
Lender hereunder may be delivered or furnished by electronic communication (including e-mail
and Internet or intranet websites) pursuant to procedures approved by the Lender; provided that
the foregoing shall not apply to notices to the Lender pursuant to Article II if the Lender has
notified the relevant Loan Party that it is incapable of receiving, or is unwilling to receive, notices
under Article II by electronic communication. The Lender or any Loan Party may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures may be limited
to particular notices or communications.
Unless the Lender otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available, return
e-mail or other written acknowledgement); and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by the intended
recipient, at its e-mail address as described in the foregoing clause (i), of notification that such
notice or communication is available and identifying the website address therefor; provided that,
for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice or communication shall be deemed to have
been sent at the opening of business on the next business day for the recipient.
(c) Change of Address, etc. Each Loan Party and the Lender may change its
address, facsimile number, telephone number or electronic mail address for notices and other
communications hereunder by notice to the other parties hereto.
(d) Reliance by Lender. The Lender shall be entitled to rely and act upon any
notices (including telephonic Borrowing Requests and other telephonic notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of notice specified
herein or (ii) the terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Borrower shall indemnify the Lender and the Related Parties of each of them for all
losses, costs, expenses and liabilities resulting from the reliance of such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and telephonic
communications with the Lender may be recorded by the Lender, and each of the parties hereby
consents to such recording.
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(ii) Required Consents. No consent shall be required for any
assignment except the consent of the Borrower (such consent not to be
unreasonably withheld or delayed) shall be required for assignments unless
(x) any Event of Default under Section 7.01(a) or (e) has occurred and is
continuing at the time of such assignment or (y) such assignment is to an
Affiliate of a Lender; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Lender within ten Business Days after having received notice
thereof.
(iii) Amendments. If the Lender assigns any portion of the Loan, the
Borrower and the Lender agree that the parties hereto, including the
Transferee, will, as necessary, enter into an amendment to this agreement
to provide for agency and other related provisions.
(c) Register. The Lender, acting solely for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at the Lender’s Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amounts and stated interest of the Loans owing to the Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall
be conclusive absent manifest error, and the Borrower and the Lender shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a “Lender” hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior
notice.
(d) Participations. The Lender may at any time, without the consent of, or
notice to, Holdings, sell participations to any Person (other than a natural person, the Borrower or
any of its Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of the Lender’s rights
and/or obligations under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Loan Parties shall continue to deal solely and directly
with the Lender in connection with the Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which the Lender sells such a participation shall provide that
the Lender shall retain the sole right to enforce this Agreement and to approve any amendment,
modification, waiver or consent in respect of any provision of this Agreement. The Loan Parties
agree that each Participant shall be entitled to the benefits of Sections 2.11 and 2.06 (subject to the
requirements and limitations of such Sections) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that (x) such
Participant agrees to be subject to the provisions of Section 2.11 as if it were an assignee under
paragraph (b) of this Section and (y) a Participant shall not be entitled to receive any greater
payments under Sections 2.06, 2.11 and 2.17 than the Lender would have been entitled to receive
with respect to the participation sold to such Participant, except to the extent such entitlement to
receive a greater payment results from a Change in Law that occurs after the Participant acquired
the applicable participation. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.08 as though it were a Lender.
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and their respective successors and assigns. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective
as delivery of a manually executed counterpart of this Agreement.
(b) Electronic Execution of Assignments and Certain Other Documents. The
words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to
any document to be signed in connection with this Agreement and the transactions contemplated
hereby shall be deemed to include include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping
system, as the case may be, to the extent and as provided for in any applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act; provided that nothing herein shall require the Lender to accept
electronic signatures in any form or format withoug its prior written consent.
SECTION 9.07 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final, in whatever currency) at any time held,
and other obligations (in whatever currency) at any time owing, by the Lender or any such
Affiliate, to or for the credit or the account of the Borrower against any and all of the Obligations
now or hereafter existing under this Agreement or any other Loan Document, irrespective of
whether or not the Lender shall have made any demand under this Agreement or any other Loan
Document and although such Obligations may be unmatured. The rights of the Lender and its
Affiliates under this Section are in addition to other rights and remedies (including other rights of
setoff) that the Lender or its Affiliates may have.
SECTION 9.09 Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement and the other Loan Documents and any
claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based
upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any
other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and
thereby shall be governed by, and construed in accordance with, the law of the State of New York.
(b) Jurisdiction. Each of the Loan Parties irrevocably and unconditionally
agrees that it will not commence any action, litigation or proceeding of any kind or description,
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(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.
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LENDER
BARCLAYS BANK PLC,
as Lender
By /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Vice President, Debt Finance