Exhibit 10.37
================================================================================
CREDIT AGREEMENT
dated as of
August [__], 2006
between
SECURITY CAPITAL ASSURANCE LTD,
XL CAPITAL ASSURANCE INC.
and
XL FINANCIAL ASSURANCE LTD.,
as Account Parties,
The LENDERS Party Hereto
and
CITIBANK, N.A.,
as Administrative Agent
-------------
$500,000,000
-------------
CITIGROUP GLOBAL MARKETS INC.
and
X.X. XXXXXX SECURITIES INC.,
as Joint Lead Arrangers and Joint Bookrunners
-------------
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent
-------------
DEUTSCHE BANK AG, NEW YORK BRANCH,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
HSBC BANK USA, N.A.,
XXXXXXX XXXXX BANK USA
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Documentation Agents
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I......................................................................1
DEFINITIONS.................................................................1
SECTION 1.01. Defined Terms.............................................1
SECTION 1.02. Terms Generally..........................................16
SECTION 1.03. Accounting Terms; GAAP and SAP...........................17
ARTICLE II....................................................................17
THE CREDITS................................................................17
SECTION 2.01. Syndicated Letters of Credit.............................17
SECTION 2.02. Issuance and Administration..............................18
SECTION 2.03. Reimbursement of LC Disbursements, Etc...................19
SECTION 2.04. Non-Syndicated Letters of Credit.........................21
SECTION 2.05. Participated Letters of Credit...........................26
SECTION 2.06. Alternative Currency Letters of Credit...................30
SECTION 2.07. Loans and Borrowings.....................................31
SECTION 2.08. Requests for Borrowings..................................32
SECTION 2.09. Funding of Borrowings....................................33
SECTION 2.10. Interest Elections.......................................34
SECTION 2.11. Termination and Reduction of the Commitments.............35
SECTION 2.12. Repayment of Loans; Evidence of Debt.....................35
SECTION 2.13. Prepayment of Loans......................................36
SECTION 2.14. Fees.....................................................37
SECTION 2.15. Interest.................................................38
SECTION 2.16. Alternate Rate of Interest...............................39
SECTION 2.17. Increased Costs..........................................39
SECTION 2.18. Break Funding Payments...................................40
SECTION 2.19. Taxes....................................................41
SECTION 2.20. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs....................................43
SECTION 2.21. Mitigation Obligations; Replacement of Lenders...........45
ARTICLE III...................................................................46
REPRESENTATIONS AND WARRANTIES.............................................46
SECTION 3.01. Organization; Powers.....................................46
SECTION 3.02. Authorization; Enforceability............................46
SECTION 3.03. Governmental Approvals; No Conflicts.....................46
SECTION 3.04. Financial Condition; No Material Adverse Change..........46
SECTION 3.05. Properties...............................................47
SECTION 3.06. Litigation and Environmental Matters.....................47
SECTION 3.07. Compliance with Laws and Agreements......................47
SECTION 3.08. Investment Company Status................................48
SECTION 3.09. Taxes....................................................48
i
SECTION 3.10. ERISA....................................................48
SECTION 3.11. Disclosure...............................................48
SECTION 3.12. Use of Credit............................................48
SECTION 3.13. Subsidiaries.............................................49
SECTION 3.14. Withholding Taxes........................................49
SECTION 3.15. Stamp Taxes..............................................49
SECTION 3.16. Legal Form...............................................49
ARTICLE IV....................................................................49
CONDITIONS.................................................................49
SECTION 4.01. Effective Date...........................................49
SECTION 4.02. Each Credit Event........................................51
ARTICLE V.....................................................................51
AFFIRMATIVE COVENANTS......................................................51
SECTION 5.01. Financial Statements and Other Information...............51
SECTION 5.02. Notices of Material Events...............................53
SECTION 5.03. Preservation of Existence and Franchises.................53
SECTION 5.04. Insurance................................................53
SECTION 5.05. Maintenance of Properties................................54
SECTION 5.06. Payment of Taxes and Other Potential Charges
and Priority Claims; Payment of Other
Current Liabilities....................................54
SECTION 5.07. Financial Accounting Practices...........................54
SECTION 5.08. Compliance with Applicable Laws..........................55
SECTION 5.09. Use of Letters of Credit and Proceeds....................55
SECTION 5.10. Continuation of and Change in Businesses.................55
SECTION 5.11. Visitation...............................................55
ARTICLE VI....................................................................55
NEGATIVE COVENANTS.........................................................55
SECTION 6.01. Mergers..................................................55
SECTION 6.02. Dispositions.............................................56
SECTION 6.03. Liens....................................................56
SECTION 6.04. Transactions with Affiliates.............................58
SECTION 6.05. Ratio of Total Funded Debt to Total Capitalization.......58
SECTION 6.06. Consolidated Net Worth...................................58
SECTION 6.07. Indebtedness.............................................58
SECTION 6.08. Private Act..............................................59
ARTICLE VII...................................................................59
EVENTS OF DEFAULT..........................................................59
ARTICLE VIII..................................................................62
THE ADMINISTRATIVE AGENT...................................................62
SECTION 8.01. Authorization and Action.................................62
SECTION 8.02. Agent's Reliance, Etc....................................62
ii
SECTION 8.03. Citibank and Affiliates..................................63
SECTION 8.04. Lender Credit Decision...................................63
SECTION 8.05. Indemnification..........................................63
SECTION 8.06. Successor Agent..........................................63
SECTION 8.07. Arrangers, Etc...........................................64
ARTICLE IX....................................................................64
MISCELLANEOUS..............................................................64
SECTION 9.01. Notices..................................................64
SECTION 9.02. Waivers; Amendments......................................66
SECTION 9.03. Expenses; Indemnity; Damage Waiver.......................67
SECTION 9.04. Successors and Assigns...................................68
SECTION 9.05. Survival.................................................72
SECTION 9.06. Counterparts; Integration; Effectiveness.................72
SECTION 9.07. Severability.............................................72
SECTION 9.08. Right of Setoff..........................................72
SECTION 9.09. Governing Law; Jurisdiction; Etc.........................73
SECTION 9.10. WAIVER OF JURY TRIAL.....................................73
SECTION 9.11. Headings.................................................74
SECTION 9.12. Treatment of Certain Information; Confidentiality........74
SECTION 9.13. Judgment Currency........................................75
SECTION 9.14. USA PATRIOT Act..........................................75
iii
SCHEDULE I - Commitments
SCHEDULE II - Indebtedness and Liens
SCHEDULE III - Litigation
SCHEDULE IV - Environmental Matters
SCHEDULE V - Subsidiaries
EXHIBIT A - Form of Assignment and Assumption
EXHIBIT B-1 - Form of Opinion of Counsel to XLCA
EXHIBIT B-2 - Form of Opinion of Special U.S. Counsel to the Borrowers
EXHIBIT B-3 - Form of Opinion of Special Bermuda Counsel to SCA and XLFA
EXHIBIT C - Form of Opinion of Special New York Counsel to Citibank, N.A.
EXHIBIT D - Form of Confirming Lender Agreement
iv
CREDIT AGREEMENT dated as of August [__], 2006, between SECURITY
CAPITAL ASSURANCE LTD, a Bermuda limited liability company ("SCA"), XL CAPITAL
ASSURANCE INC., a New York corporation ("XLCA") and XL FINANCIAL ASSURANCE LTD.,
a Bermuda limited liability company ("XLFA" and, together with SCA and XLCA,
each an "Account Party" and collectively, the "Account Parties"), the LENDERS
party hereto, and CITIBANK, N.A., as Administrative Agent.
The Account Parties have requested that the Lenders issue letters
of credit for their account and make loans to them in an aggregate face or
principal amount not exceeding $500,000,000 at any one time outstanding, and the
Lenders are prepared to issue such letters of credit and make such loans upon
the terms and conditions hereof. Accordingly, the parties hereto agree as
follows:
CREDIT AGREEMENT dated as of August [__], 2006, between SECURITY
CAPITAL ASSURANCE LTD, a Bermuda limited liability company ("SCA"), XL CAPITAL
ASSURANCE INC., a New York corporation ("XLCA") and XL FINANCIAL ASSURANCE LTD.,
a Bermuda limited liability company ("XLFA" and, together with SCA and XLCA,
each an "ACCOUNT PARTY" and collectively, the "ACCOUNT PARTIES"), the LENDERS
party hereto, and CITIBANK, N.A., as Administrative Agent.
The Account Parties have requested that the Lenders issue letters
of credit for their account and make loans to them in an aggregate face or
principal amount not exceeding $500,000,000 at any one time outstanding, and the
Lenders are prepared to issue such letters of credit and make such loans upon
the terms and conditions hereof. Accordingly, 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:
"ACCOUNT PARTIES" means each of SCA, XLCA and XLFA.
"ACCOUNT PARTY JURISDICTION" means (a) Bermuda and (b) any other
country (i) where any Account Party is licensed or qualified to do business or
(ii) from or through which payments hereunder are made by any Account Party.
"ADJUSTED LIBO RATE" means, for the Interest Period for any
Eurodollar Borrowing, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
MULTIPLIED BY (b) the Statutory Reserve Rate for such Interest Period.
"ADMINISTRATIVE AGENT" means Citibank, in its capacity as
administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly, Controls or is Controlled by or is under
common Control with the Person specified.
"ALTERNATIVE CURRENCY" means euros or Pounds Sterling, as
applicable.
"ALTERNATIVE CURRENCY LC EXPOSURE" means, at any time, the sum of
(a) the Dollar Equivalent of the aggregate undrawn amount of all outstanding
Alternative Currency Letters of Credit at such time PLUS (b) the Dollar
Equivalent of the aggregate amount of all LC Disbursements under Alternative
Currency Letters of Credit that have not been reimbursed by or on behalf of the
relevant Account Party at such time. The Alternative Currency LC Exposure of
- 2 -
any Lender shall at any time be such Lender's share of the total Alternative
Currency LC Exposure at such time.
"ALTERNATIVE CURRENCY LETTER OF CREDIT" means a letter of credit
issued by a Lender in an Alternative Currency pursuant to Section 2.06.
"ALTERNATIVE CURRENCY LETTER OF CREDIT REPORT" has the meaning
set forth in Section 2.06(b).
"APPLICABLE ADDITIONAL MARGIN", with respect to any Loan for any
period during which the aggregate outstanding principal amount of the Loans is
greater than 50% of the Revolving Credit Commitments then in effect, the rate
per annum specified under the caption "Applicable Additional Margin" in the
table contained in the definition of "Applicable Rate" in this Section or
otherwise determined in accordance with such definition.
"APPLICABLE MARGIN" means, with respect to any Eurodollar Loan,
the rate per annum specified under the caption "Applicable Margin" in the table
contained in the definition of "Applicable Rate" in this Section or otherwise
determined in accordance with such definition.
"APPLICABLE PERCENTAGE" means (a) with respect to any Lender
under the Letter of Credit Tranche in relation to its obligations to issue or
participate in Letters of Credit (or related matters), the percentage of the
Letter of Credit Commitments of all the Lenders represented by such Lender's
Letter of Credit Commitment, (b) with respect to any Lender under the Revolving
Credit Tranche, the percentage of the Revolving Credit Commitments of all the
Lenders represented by such Lender's Revolving Credit Commitment and (c)
otherwise, with respect to any Lender, the percentage of the Commitments of all
the Lenders represented by such Lender's Commitment(s). If the Commitments have
terminated or expired, the Applicable Percentages shall be determined based upon
the Commitments most recently in effect, giving effect to any assignments.
"APPLICABLE RATE" means, for any day, with respect to the
facility fees payable hereunder, interest margins applicable to Eurodollar
Loans, letter of credit fees applicable to Letters of Credit or additional
interest margins applicable to Loans , as the case may be, the applicable rate
per annum set forth in first column of the table below under the caption
"Applicable Facility Fee Rate", "Applicable Margin", "Applicable Letter of
Credit Fee Rate", or "Applicable Additional Margin" , respectively, based upon
the applicable Financial Strength Rating for the Relevant Account Party as
determined below:
--------------------------------------------------------------------------------
S&P/Xxxxx'x
Financial Strength Level 3
Ratings for Relevant Xxxxx 0 Xxxxx 0 Ratings Below
Account Party AAA / Aaa AA+ / Aa1 Level 2
--------------------------------------------------------------------------------
Applicable Facility Fee 0.04% 0.05% 0.06%
Rate
--------------------------------------------------------------------------------
Applicable Margin 0.11% 0.125% 0.14%
--------------------------------------------------------------------------------
Applicable Letter of 0.11% 0.125% 0.14%
Credit Fee Rate
--------------------------------------------------------------------------------
Applicable Additional 0.00% 0.025% 0.05%
Margin
--------------------------------------------------------------------------------
- 3 -
For purposes of the foregoing:
(i) (except as provided in clause (iii) below in the case of SCA)
if either S&P or Xxxxx'x shall not have in effect a Financial Strength
Rating for the Relevant Account Party (other than by reason of the
circumstances referred to in the penultimate sentence of this
definition), then the Financial Strength Rating of such rating agency
for such Relevant Account Party shall be deemed to fall within Level 3
above;
(ii) if the Financial Strength Ratings of S&P and Xxxxx'x for the
Relevant Account Party shall fall within different Levels, the
Applicable Rate for such Relevant Account Party shall be based on the
lower of the two ratings unless one of the two ratings is two or more
Levels lower than the other, in which case the Applicable Rate shall be
determined by referencing the ratings level next above that of the lower
of the two ratings;
(iii) if both S&P and Xxxxx'x shall not have in effect a
Financial Strength Rating for SCA (other than by reason of the
circumstances referred to in the penultimate sentence of this
definition), then the Financial Strength Ratings of such rating agencies
for SCA shall be deemed to be one Level below the applicable Financial
Strength Ratings of such rating agencies for XLCA and XLFA (and if the
Applicable Rate for XLCA and XLFA shall fall within different Levels,
the Applicable Rate for SCA shall be based on the lower of the two
Levels); and
(iv) if the Financial Strength Rating established or deemed to
have been established by Xxxxx'x or S&P shall be changed (other than as
a result of a change in the rating system of Xxxxx'x or S&P), such
change shall be effective as of the date on which it is first announced
by the applicable rating agency.
Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the financial strength rating
system of Xxxxx'x or S&P shall change, or if either such rating agency shall
cease to be in the business of providing insurance ratings, SCA and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Rate shall be
determined by reference to the rating of such rating agency most recently in
effect prior to such change or cessation. For purposes of this definition,
"RELEVANT ACCOUNT PARTY" means (A) with respect to the applicable Level for
purposes of determining the Facility Fee Rate, (I) payable on the unused portion
of the Commitments on any date, the Account Party that falls within the highest
Level on such date, and (II) payable on any drawn portion of the Commitment with
respect to any Loan made to an Account Party or any Letter of Credit issued for
an Account Party, the relevant Account Party of such Loan or Letter of Credit
and (B) otherwise, the relevant Account Party of the applicable Loan or Letter
of Credit.
- 4 -
"APPROVED FUND" means any Person (other than a natural person)
that is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"ASSIGNMENT AND ASSUMPTION" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"AVAILABILITY PERIOD" means the period from and including the
Effective Date to but not including the Commitment Termination Date.
"BASE RATE" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of (a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate and (b) 0.50% per annum
above the Federal Funds Effective Rate.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWING" means, with respect to any Account Party, (a) all BR
Loans of such Account Party made, converted or continued on the same date or (b)
all Eurodollar Loans of such Account Party that have the same Interest Period.
"BORROWING REQUEST" has the meaning assigned to such term in
Section 2.08(a).
"BR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Base Rate.
"BUSINESS DAY" means any day (a) that is not a Saturday, Sunday
or other day on which commercial banks in New York City, London or Bermuda are
authorized or required by law to remain closed and (b) if such day relates to a
borrowing of, a payment or prepayment of principal of or interest on, a
continuation or conversion of or into, or the Interest Period for, a Eurodollar
Loan, or to a notice by an Account Party with respect to any such borrowing,
payment, prepayment, continuation, conversion, or Interest Period, that is also
a day on which dealings in Dollar deposits are carried out 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.
"CHANGE IN CONTROL" means the occurrence of any of the following
events or conditions: (a) any Person (other than XL Capital Ltd), including any
syndicate or group deemed to be a Person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended,
- 5 -
acquires beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions, of shares of
capital stock of SCA entitling such Person to exercise 40% or more of the total
voting power of all shares of capital stock of SCA that is entitled to vote
generally in elections of directors, other than an acquisition by SCA, any of
its Subsidiaries or any employee benefit plans of SCA; or (b) SCA merges or
consolidates with or into any other Person (other than a Subsidiary), another
Person (other than a Subsidiary) merges into SCA or SCA conveys, sells,
transfers or leases all or substantially all of its assets to another Person
(other than a Subsidiary), other than any transaction: (i) that does not result
in a reclassification, conversion, exchange or cancellation of the outstanding
shares of capital stock of SCA (other than the cancellation of any outstanding
shares of capital stock of SCA held by the Person with whom it merges or
consolidates) or (ii) which is effected solely to change the jurisdiction of
incorporation of SCA and results in a reclassification, conversion or exchange
of outstanding shares of capital stock of SCA solely into shares of capital
stock of the surviving entity; or (c) a majority of the members of SCA's board
of directors are persons who are then serving on the board of directors without
having been elected by the board of directors or having been nominated for
election by its shareholders.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.17(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CITIBANK" means Citibank, N.A.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT" means, with respect to any Lender, the Letter of
Credit Commitment and/or the Revolving Credit Commitment of such Lender, as
applicable. The initial aggregate amount of the Lenders' Commitments is
$500,000,000.
"COMMITMENT TERMINATION DATE" means August [__], 2011.
"CONFIRMING LENDER" means, with respect to any Lender, any other
Person which is listed on the NAIC Approved Bank List that has agreed, by
delivery of an agreement between such Lender and such other Person in
substantially the form of Exhibit D or any other form satisfactory to the
Administrative Agent, to honor the obligations of such Lender in respect of a
draft complying with the terms of a Syndicated Letter of Credit or a
Non-Syndicated Letter of Credit, as the case may be, as if, and to the extent,
such other Person were the "issuing lender" (in place of such Lender) named in
such Syndicated Letter of Credit or Non-Syndicated Letter of Credit, as the case
may be.
"CONSOLIDATED NET WORTH" means, at any time, the consolidated
stockholders' equity of SCA and its Subsidiaries, PROVIDED that the calculation
of such consolidated stockholders' equity shall exclude (a) the effect thereon
of any adjustments required under Statement
- 6 -
of Financial Accounting Standards No. 115 ("Accounting for Certain Investments
in Debt and Equity Securities"), (b) the effect thereon of any adjustments
required under Statement of Financial Accounting Standards No. 133 ("Accounting
for Derivative Instruments and Hedging Activities") and (c) any Exempt
Indebtedness (and the assets relating thereto) in the event such Exempt
Indebtedness is consolidated on the consolidated balance sheet of SCA and its
consolidated Subsidiaries in accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CREDIT DOCUMENTS" means, collectively, this Agreement and the
Letter of Credit Documents.
"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.
"DOLLAR EQUIVALENT" means, as used in each Alternative Currency
Letter of Credit Report and in respect of any Alternative Currency Letter of
Credit, the amount of Dollars obtained by converting the Alternative Currency LC
Exposure with respect to such Alternative Currency Letter of Credit, as
specified in such Alternative Currency Letter of Credit Report, into Dollars at
the spot rate for the purchase of Dollars with such currency as quoted by the
Administrative Agent at approximately 11:00 a.m. (London time) on the second
Business Day before the date of such Alternative Currency Letter of Credit
Report (unless another rate or time is agreed to by SCA and the Administrative
Agent).
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"EFFECTIVE DATE" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"ENVIRONMENTAL LAWS" means any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection of the
environment, including natural resources, (b) exposure of Persons, including but
not limited to employees, to Hazardous Materials, (c) protection of the public
health or welfare from the effects of products, by-products, wastes, emissions,
discharges or releases of Hazardous Materials or (d) regulation of the
manufacture, use or introduction into commerce of Hazardous Materials, including
their manufacture, formulation, packaging, labeling, distribution,
transportation, handling, storage or disposal.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of an Account Party or any
Subsidiary resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract or agreement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.
- 7 -
"EQUITY RIGHTS" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any shareholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with any Account Party, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Account Party or any of such
Account Party's ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by any Account Party or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by any Account Party or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by any Account Party or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
any Account Party or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
"EURO" means the single currency of Participating Member States
of the European Union.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans constituting such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Account Party hereunder, (a) Taxes imposed on (or measured
by) its net income, net profits or overall gross receipts (including, without
limitation, branch profits or similar taxes) by the United States of America, or
by any jurisdiction under the laws of which such recipient is organized or
resident, in which such recipient has an office or with which such recipient has
any other connection (other than a connection that is deemed to arise solely by
reason of both (I) the transactions contemplated by this Agreement and (II) an
Account Party being organized in,
- 8 -
maintaining an office in, conducting business in, or having a connection with,
such jurisdiction), (b) any Taxes not described in clause (a) above (other than
Other Taxes) that are imposed as a result of a connection the Administrative
Agent or any Lender, as the case may be, has with the relevant jurisdiction
(other than a connection that is deemed to arise solely by reason of both (I)
the transactions contemplated by this Agreement and (II) an Account Party being
organized or resident in, maintaining an office in, conducting business in, or
having a connection with, such jurisdiction) and (c) any Tax imposed pursuant to
a law in effect at the time such Lender first becomes a party to this Agreement
except to the extent that such Lender's assignor, if any, was entitled at the
time of the assignment to receive additional amounts from any Account Party with
respect to such Tax under Section 2.19(a) or 2.19(c) and (d) any Tax that is
attributable to such Lender's failure or inability (other than as a result of a
Change in Law formally announced after such Lender becomes a party to this
Agreement) to comply with Section 2.19(e).
"EXEMPT INDEBTEDNESS" means any Indebtedness of any Person (other
than SCA or any of its Affiliates) that is consolidated on the balance sheet of
SCA and its consolidated Subsidiaries in accordance with GAAP (whether or not
required to be so consolidated); PROVIDED that (a) at the time of the incurrence
of such Indebtedness by such Person, the cash flows from the assets of such
Person shall reasonably be expected by such Person to liquidate such
Indebtedness and all other liabilities (contingent or otherwise) of such Person
and (b) no portion of such Indebtedness of such Person shall be Guaranteed
(other than guarantees of the type referred to in clause (a) or (b) of the
definition of Indebtedness) by, or shall be secured by a Lien on any assets
owned by, SCA or any of its Subsidiaries and neither such Person nor any of the
holders of such Indebtedness shall have any direct or indirect recourse to SCA
or any of its Subsidiaries (other than in respect of liabilities and guarantees
of the type referred to in clause (a) or (b) of the definition of Indebtedness).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means, with respect to any Account Party, a
principal financial officer of such Account Party.
"FINANCIAL STRENGTH RATING" means, at any time, with respect to
any Account Party, the then current financial strength rating of such Account
Party issued by Moody's and/or or S&P.
"GAAP" means generally accepted accounting principles in the
United States of America.
"GIC" means a guaranteed investment contract or funding agreement
or other similar agreement issued by an Account Party or any of its Subsidiaries
that guarantees to a counterparty a rate of return on the invested capital over
the life of such contract or agreement.
- 9 -
"GOVERNMENTAL AUTHORITY" means the government of the United
States of America, or of any other nation (including the European Union), or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GRANTING LENDER" has the meaning assigned to such term in
Section 9.04.
"GUARANTEE" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including any obligation, whether or
not contingent, (i) to purchase any such Indebtedness or any property
constituting security therefor for the purpose of assuring the holder of such
Indebtedness, (ii) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital, solvency or
other balance sheet condition of such other Person (including keepwell
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guarantee hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount of the Indebtedness in respect of which such
Guarantee is made. The terms "GUARANTEE" and "GUARANTEED" used as a verb shall
have a correlative meaning.
"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.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" means, for any Person, without duplication: (i)
all indebtedness or liability for or on account of money borrowed by, or for or
on account of deposits with or advances to (but not including accrued pension
costs, deferred income taxes or accounts payable of) such Person; (ii) all
obligations (including contingent liabilities) of such Person evidenced by
bonds, debentures, notes, banker's acceptances or similar instruments; (iii) all
indebtedness or liability for or on account of property or services purchased or
acquired by such Person; (iv) any amount secured by a Lien on property owned by
such Person (whether or not assumed) and Capital Lease Obligations of such
Person (without regard to any limitation of the rights and remedies of the
holder of such Lien or the lessor under such capital lease to repossession or
sale of such property); (v) the maximum available amount of all standby letters
of credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed); and (vi) all Guarantees of
such Person; PROVIDED that the following shall be excluded from Indebtedness of
SCA and any of its Subsidiaries for purposes of this Agreement: (a) all payment
liabilities of any such Person under insurance and reinsurance policies from
time
- 10 -
to time issued by such Person, including guarantees of any such payment
liabilities; (b) all other liabilities (or guarantees thereof) arising in the
ordinary course of any such Person's business as an insurance or reinsurance
company (including GICs and Stable Value Instruments and any Specified
Transaction Agreement relating thereto), or as a corporate member of The Council
of Lloyd's, or as a provider of financial or investment services or contracts
(including GICs and Stable Value Instruments and any Specified Transaction
Agreement relating thereto); and (c) any Exempt Indebtedness.
"INDEMNIFIED TAXES" means, with respect to any Account Party,
Taxes imposed on the Administrative Agent or any Lender on or with respect to
any payment by such Account Party hereunder, other than Excluded Taxes and Other
Taxes.
"INSURANCE SUBSIDIARY" means any Subsidiary which is subject to
the regulation of, and is required to file statutory financial statements with,
any governmental body, agency or official in any State or territory of the
United States or the District of Columbia which regulates insurance companies or
the doing of an insurance business therein.
"INTEREST ELECTION REQUEST" has the meaning assigned to such term
in Section 2.10.
"INTEREST PAYMENT DATE" means (a) with respect to any BR Loan,
each Quarterly Date and (b) with respect to any Eurodollar 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.
"INTEREST PERIOD" means, for any Eurodollar Loan or Borrowing,
the period commencing on the date of such Loan or 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 all of the Lenders) nine or 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, and (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. For purposes hereof, the date of a Loan initially shall be the
date on which such Loan is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Loan, and the date of a
Borrowing comprising Loans that have been converted or continued shall be the
effective date of the most recent conversion or continuation of such Loans.
"ISDA" has the meaning assigned to such term in Section 6.03(f).
"ISSUING LENDER" means (a) with respect to any Participated
Letter of Credit, Citibank, in its capacity as the issuer of such Participated
Letter of Credit hereunder, and its successors in such capacity as provided in
Section 2.05(j), (b) with respect to any Syndicated Letter of Credit, each
Lender, in its capacity as the issuer of such Syndicated Letter of Credit and
- 11 -
(c) with respect to any Non-Syndicated Letter of Credit, the Lender named
therein as the issuer thereof.
"LAW" means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Governmental Authority.
"LC DISBURSEMENT" means (a) with respect to any Participated
Letter of Credit or Non-Syndicated Letter of Credit, a payment made by the
Issuing Lender thereof pursuant thereto and (b) with respect to any Syndicated
Letter of Credit or Alternative Currency Letter of Credit, a payment made by a
Lender pursuant thereto.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time PLUS (b) the
aggregate amount of all LC Disbursements under Letters of Credit that have not
yet been reimbursed by or on behalf of the relevant Account Party at such time.
The LC Exposure of any Lender at any time shall be the sum of (i) its Applicable
Percentage of the total LC Exposure (excluding any Alternative Currency LC
Exposure) PLUS (ii) the Alternative Currency LC Exposure (if any) of such Lender
at such time.
"LENDERS" means the Persons listed on Schedule I and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. For purposes of Sections 2.01, 2.02, 2.03,
2.04, 2.05 and 2.06, any reference to the term "Lender" or "Lenders" shall mean
a Lender or the Lenders under the Letter of Credit Tranche.
"LETTER OF CREDIT COMMITMENT" means, with respect to any Lender,
the commitment of such Lender, if any, to issue Syndicated Letters of Credit and
Non-Syndicated Letters of Credit and acquire participations in Participated
Letters of Credit and Non-Syndicated Letters of Credit, expressed as an amount
representing the maximum aggregate amount of such Lender's LC Exposure
hereunder, as such commitment may be (i) reduced from time to time pursuant to
Section 2.11 and (ii) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Letter of Credit Commitment is set forth on Schedule I or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Letter of Credit Commitment, as applicable. The initial aggregate amount of the
Lenders' Letter of Credit Commitments is $250,000,000.
"LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of
Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for the rights
and obligations of the parties concerned or at risk with respect to such Letter
of Credit.
"LETTER OF CREDIT TRANCHE" means the tranche hereunder relating
to the Letter of Credit Commitments, the Letters of Credit issued thereunder and
the Lenders having Letter of Credit Commitments or LC Exposure.
- 12 -
"LETTERS OF CREDIT" means each of the Syndicated Letters of
Credit, the Non-Syndicated Letters of Credit, the Participated Letters of Credit
and the Alternative Currency Letters of Credit.
"LIBO RATE" means, for the Interest Period for any Eurodollar
Borrowing, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for the offering of Dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the LIBO Rate for such Interest Period shall
be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIEN" means, with respect to any asset, any mortgage, deed of
trust, pledge, lien, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever, including but not limited to any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"LOANS" means the loans made by the Lenders under any Tranche to
the Account Parties pursuant to Section 2.07.
"MARGIN STOCK" means "margin stock" within the meaning of
Regulations T, U and X of the Board.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on: (a)
the assets, business, financial condition or operations of an Account Party and
its Subsidiaries taken as a whole; or (b) the ability of an Account Party to
perform any of its payment or other material obligations under this Agreement.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any successor
thereto.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
"NAIC APPROVED BANK" means (a) any Person that is a bank listed
on the most current "Bank List" of banks approved by the NAIC (the "NAIC
APPROVED BANK LIST") or (b) any Lender as to which its Confirming Lender is a
bank listed on the NAIC Approved Bank List.
"NAIC APPROVED BANK LIST" has the meaning assigned to such term
in the definition of "NAIC Approved Bank" in this Section.
- 13 -
"NON-SYNDICATED LETTERS OF CREDIT" means letters of credit issued
under Section 2.04.
"NON-U.S. BENEFIT PLAN" means any plan, fund (including any
superannuation fund) or other similar program established or maintained outside
the United States by any Account Party or any of their Subsidiaries, with
respect to which such Account Party or such Subsidiary has an obligation to
contribute, for the benefit of employees of such Account Party or such
Subsidiary, which plan, fund or other similar program provides, or results in,
the type of benefits described in Section 3(1) or 3(2) of ERISA, and which plan
is not subject to ERISA or the Code.
"OTHER TAXES" means, with respect to any Account Party, any and
all present or future stamp or documentary taxes or any other similar excise or
property Taxes, arising from any payment made by such Account Party hereunder or
from its execution, delivery or enforcement of this Agreement, but excluding
property or similar Taxes other than any such Taxes imposed in such
circumstances solely as a result of such Account Party being organized or
resident in, maintaining an office in, conducting business in or maintaining
property located in the taxing jurisdiction in question.
"PARTICIPANT" has the meaning assigned to such term in Section
9.04.
"PARTICIPATED LETTERS OF CREDIT" means letters of credit issued
under Section 2.05.
"PARTICIPATING MEMBER STATE" means any member state of the
European Community that adopts or has adopted the euro as its lawful currency in
accordance with the legislation of the European Union relating to the European
Monetary Union.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which any Account
Party or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PRIVATE ACT" means separate legislation enacted in Bermuda with
the intention that such legislation apply specifically to an Account Party, in
whole or in part.
"QUARTERLY DATE" means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date hereof.
"REGISTER" has the meaning assigned to such term in Section 9.04.
"REGISTRATION STATEMENT" means the registration statement filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, by SCA on April 7, 2006
- 14 -
(together with any amendments thereto), which shall have become effective on or
prior to the Effective Date.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"RELEVANT ACCOUNT PARTY" has the meaning assigned to such term in
the last sentence of the definition of "Applicable Rate" in this Section.
"REQUIRED LENDERS" means, at any time, Lenders having Commitments
representing more than 50% of the aggregate amount of the Commitments at such
time; PROVIDED that, if the Commitments have expired or been terminated,
"Required Lenders" means Lenders having more than 50% of the sum of the
aggregate LC Exposure and the aggregate Revolving Credit Exposure of the Lenders
at such time. The "Required Lenders" of a particular Tranche means Lenders
having Commitments under such Tranche representing more than 50% of the
aggregate Commitments of all the Lenders under such Tranche at such time;
PROVIDED that, if the Commitments under such Tranche have expired or been
terminated, "Required Lenders" means Lenders under such Tranche having more than
50% of the aggregate LC Exposure or the aggregate Revolving Credit Exposure, as
applicable, of the Lenders under such Tranche at such time.
"REVOLVING CREDIT COMMITMENT" means, with respect to any Lender,
the commitment of such Lender, if any, to make Loans under Section 2.07, as such
commitment may be (a) reduced from time to time pursuant to Section 2.11 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of a Lender's Revolving
Credit Commitment, if any, is set forth on Schedule I or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Revolving Credit
Commitment, as applicable. The initial aggregate amount of the Lenders'
aggregate Revolving Credit Commitments is $250,000,000.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at
any time, the outstanding principal amount of such Lender's Loans.
"REVOLVING CREDIT TRANCHE" means the tranche hereunder relating
to the Revolving Credit Commitments, the Loans made thereunder and the Lenders
having Revolving Credit Commitments or Revolving Credit Exposure.
"S&P" means Standard & Poor's Ratings, or any successor thereto.
"SAP" means, as to each Account Party and each Subsidiary that
offers insurance products, the statutory accounting practices prescribed or
permitted by the relevant Governmental Authority for such Account Party's or
such Subsidiary's domicile for the preparation of its financial statements and
other reports by insurance corporations of the same type as such Account Party
or such Subsidiary in effect on the date such statements or reports are to be
prepared, except if otherwise notified by SCA as provided in Section 1.03.
"SCA" means Security Capital Assurance Ltd, a Bermuda limited
liability company.
- 15 -
"SEC" means the Securities and Exchange Commission or any
successor entity.
"SIGNIFICANT SUBSIDIARY" means, at any time, each Subsidiary of
SCA that, as of such time, meets the definition of a "significant subsidiary"
under Regulation S-X of the SEC.
"SPECIFIED TRANSACTION AGREEMENT" means any agreement, contract
or documentation with respect to the following types of transactions: rate swap
transaction, swap option, basis swap, asset swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, current swap
transaction, cross-currency rate swap transaction, currency option, credit
protection transaction, credit swap, credit default swap, credit default option,
total return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending or
borrowing transaction, weather index transaction or forward purchase or sale of
a security, commodity or other financial instrument or interest, and
transactions on any commodity futures or other exchanges, markets and their
associated clearing houses (including any option with respect to any of these
transactions).
"SPV" has the meaning assigned to such term in Section 9.04.
"STABLE VALUE INSTRUMENT" means any insurance, derivative or
similar financial contract or instrument designed to mitigate the volatility of
returns during a given period on a specified portfolio of securities held by one
party (the "CUSTOMER") through the commitment of the other party (the "SVI
PROVIDER") to provide the customer with a credited rate of return on the
portfolio, typically determined through an interest-crediting mechanism (and in
exchange for which the SVI provider typically receives a fee).
"STATUTORY RESERVE RATE" means, for any day (or for the Interest
Period for any Eurodollar Borrowing), a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one MINUS the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject on such
day (or, with respect to an Interest Period, the denominator of which is the
number one MINUS the arithmetic mean of such aggregates for the days in such
Interest Period) with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT"), at
any date, any corporation (or similar entity) of which a majority of the shares
of outstanding capital stock normally entitled to vote for the election of
directors (regardless of any contingency which does or may suspend or dilute the
voting rights of such capital stock) is at such time owned directly or
indirectly by the parent or one or more subsidiaries of the parent. Unless
otherwise specified, "Subsidiary" means a Subsidiary of an Account Party.
- 16 -
"SYNDICATED LETTERS OF CREDIT" means letters of credit issued
under Section 2.01.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TOTAL CAPITALIZATION" means, at any time, the sum of Total
Funded Debt PLUS Consolidated Net Worth at such time.
"TOTAL FUNDED DEBT" means, at any time, all Indebtedness of SCA
and its Subsidiaries and any other Person which would at such time be classified
in whole or in part as a liability on the consolidated balance sheet of SCA and
its consolidated Subsidiaries in accordance with GAAP (it being understood for
avoidance of doubt that any liability or obligation excluded from the definition
of Indebtedness shall not constitute Indebtedness for purposes of this
definition).
"TRANCHE" means the Letter of Credit Tranche or the Revolving
Credit Tranche, as applicable.
"TRANSACTIONS" means the execution, delivery and performance by
the Account Parties of this Agreement and the other Credit Documents to which
any Account Party is intended to be a party, the issuance of Letters of Credit,
the borrowing of Loans and the use of the proceeds thereof.
"TYPE", when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans constituting such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base
Rate.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
- 17 -
SECTION 1.03. ACCOUNTING TERMS; GAAP AND SAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP or SAP, as the context requires, each as in
effect from time to time; PROVIDED that, if SCA notifies the Administrative
Agent that the Account Parties request an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or
SAP, as the case may be, or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Account Parties that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or SAP, as the case may be, or in the application thereof, then such
provision shall be interpreted on the basis of GAAP or SAP, as the case may be,
as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. SYNDICATED LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth
herein, at the request of any Account Party the Lenders agree at any time and
from time to time during the Availability Period to issue Syndicated Letters of
Credit for the account of such Account Party (it being understood that
Syndicated Letters of Credit may be issued, or be outstanding, for the account
of more than one of the Account Parties at any time). Each Syndicated Letter of
Credit shall be in such form as is consistent with the requirements of the
applicable regulatory authorities in the relevant jurisdiction as requested by
the relevant Account Party or as otherwise agreed to by the Administrative Agent
and such Account Party; PROVIDED that, without the prior consent of each Lender,
no Syndicated Letter of Credit may be issued that would vary the several (and
not joint) nature of the obligations of the Lenders thereunder as provided in
the next succeeding sentence. Each Syndicated Letter of Credit shall be issued
by all of the Lenders, acting through the Administrative Agent, at the time of
issuance as a single multi-bank letter of credit, but the obligation of each
Lender thereunder shall be several and not joint, based upon its Applicable
Percentage of the aggregate undrawn amount of such Syndicated Letter of Credit.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION. To
request the issuance of a Syndicated Letter of Credit (or the amendment, renewal
or extension of an outstanding Syndicated Letter of Credit), an Account Party
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Administrative Agent) to the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a
Syndicated Letter of Credit, or identifying the Syndicated Letter of Credit to
be amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension, as the case may be (which shall be a Business Day), the
date on which such Syndicated Letter of Credit is to expire (which shall comply
with paragraph (d) of this Section), the amount of such Syndicated Letter of
Credit, the name and address of the beneficiary thereof and the terms and
conditions of (and such other information as shall be necessary to prepare,
amend, renew or extend, as the case may be) such Syndicated Letter of Credit.
The Administrative Agent shall give prompt notice of each such request to the
Lenders under the Letter of Credit Tranche. If any Syndicated Letter of Credit
- 18 -
shall provide for the automatic extension of the expiry date thereof unless the
Administrative Agent gives notice that such expiry date shall not be extended,
then the Administrative Agent will give such notice if requested to do so by the
Required Lenders of the Letter of Credit Tranche in a notice given to the
Administrative Agent not more than 60 days, but not less than 45 days, prior to
the current expiry date of such Syndicated Letter of Credit. If requested by the
Administrative Agent, such Account Party also shall submit a letter of credit
application on Citibank's standard form in connection with any request for a
Syndicated Letter of Credit. In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by any Account Party
to, or entered into by any Account Party with, the Administrative Agent relating
to any Syndicated Letter of Credit, the terms and conditions of this Agreement
shall control.
(c) LIMITATIONS ON AMOUNTS. A Syndicated Letter of Credit shall
be issued, amended, renewed or extended only if (and upon such issuance,
amendment, renewal or extension of each Syndicated Letter of Credit the Account
Parties shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension, (i) the aggregate LC Exposure of
the Lenders under the Letter of Credit Tranche shall not exceed the Letter of
Credit Commitments and (ii) the LC Exposure (excluding any Alternative Currency
LC Exposure) of each Lender under the Letter of Credit Tranche shall not exceed
its Applicable Percentage of the Letter of Credit Commitments.
(d) EXPIRY DATE. Each Syndicated Letter of Credit shall expire at
or prior to the close of business on the date one year after the date of the
issuance of such Syndicated Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension); PROVIDED that in
no event shall any Syndicated Letter of Credit have an expiry date after the
first anniversary of the Commitment Termination Date.
(e) OBLIGATION OF LENDERS. The obligation of any Lender under any
Syndicated Letter of Credit shall be several and not joint and shall at any time
be in an amount equal to such Lender's Applicable Percentage of the aggregate
undrawn amount of such Syndicated Letter of Credit, and each Syndicated Letter
of Credit shall expressly so provide.
(f) ADJUSTMENT OF APPLICABLE PERCENTAGES. Upon the assignment by
a Lender of all or a portion of its Letter of Credit Commitment and its
interests in the Syndicated Letters of Credit pursuant to an Assignment and
Assumption, the Administrative Agent shall promptly notify each beneficiary
under an outstanding Syndicated Letter of Credit of the Lenders that are parties
to such Syndicated Letter of Credit and their respective Applicable Percentages
as of the effective date of, and after giving effect to, such assignment.
SECTION 2.02. ISSUANCE AND ADMINISTRATION. Each Syndicated Letter
of Credit shall be executed and delivered by the Administrative Agent in the
name and on behalf of, and as attorney-in-fact for, each Lender party to such
Syndicated Letter of Credit, and the Administrative Agent shall act under each
Syndicated Letter of Credit, and each Syndicated Letter of Credit shall
expressly provide that the Administrative Agent shall act, as the agent of each
Lender to (a) receive drafts, other demands for payment and other documents
presented by the beneficiary under such Syndicated Letter of Credit, (b)
determine whether such drafts, demands and documents are in compliance with the
terms and conditions of such Syndicated Letter of Credit and (c) notify such
Lender and the relevant Account Party that a valid drawing
- 19 -
has been made and the date that the related LC Disbursement is to be made;
PROVIDED that the Administrative Agent (in its capacity as such) shall have no
obligation or liability for any LC Disbursement under such Syndicated Letter of
Credit, and each Syndicated Letter of Credit shall expressly so provide. Each
Lender hereby irrevocably appoints and designates the Administrative Agent as
its attorney-in-fact, acting through any duly authorized officer of Citibank, to
execute and deliver in the name and on behalf of such Lender each Syndicated
Letter of Credit to be issued by such Lender hereunder. Promptly upon the
request of the Administrative Agent, each Lender will furnish to the
Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Syndicated Letter of Credit may reasonably request in order
to demonstrate that the Administrative Agent has the power to act as
attorney-in-fact for such Lender to execute and deliver such Syndicated Letter
of Credit. Notwithstanding anything in this Agreement to the contrary, the
Administrative Agent has no responsibility hereunder with respect to the
issuance, renewal, extension, amendment or other administration of any
Alternative Currency Letter of Credit, except as expressly set forth in Section
2.06.
SECTION 2.03. REIMBURSEMENT OF LC DISBURSEMENTS, ETC.
(a) REIMBURSEMENT. If any Lender shall make any LC Disbursement
in respect of any Syndicated Letter of Credit or Alternative Currency Letter of
Credit issued for the account of any Account Party, such Account Party agrees
that it shall reimburse such Lender in respect of such LC Disbursement under (x)
a Syndicated Letter of Credit by paying to the Administrative Agent an amount
equal to such LC Disbursement not later than noon, New York City time, on the
Business Day immediately following the day that such Account Party receives
notice of such LC Disbursement and (y) an Alternative Currency Letter of Credit,
by paying such Lender on the date, in the currency and amount thereof, together
with interest thereon (if any), and in the manner (including the place of
payment) as such Lender and such Account Party shall have separately agreed
pursuant to Section 2.06.
(b) REIMBURSEMENT OBLIGATIONS ABSOLUTE. Each Account Party's
obligations to reimburse LC Disbursements as provided in paragraph (a) of this
Section shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Syndicated Letter of Credit or any term or provision
therein, (ii) any draft or other document presented under a Syndicated Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment under
a Syndicated Letter of Credit against presentation of a draft or other document
that does not comply strictly with the terms of such Syndicated Letter of Credit
(PROVIDED that no Account Party shall be obligated to reimburse such LC
Disbursements unless payment is made against presentation of a draft or other
document that at least substantially complies with the terms of such Syndicated
Letter of Credit), (iv) at any time or from time to time, without notice to any
Account Party, the time for any performance of or compliance with any of such
reimbursement obligations of any other Account Party shall be waived, extended
or renewed, (v) any of such reimbursement obligations of any other Account Party
being amended or otherwise modified in any respect, or any guarantee of any such
reimbursement obligations being released, substituted or exchanged in whole or
in part or otherwise dealt with, (vi) the occurrence of any Default, (vii) the
existence of any proceedings of the type described in clause (g) or (h) of
Article VII with respect to any other Account Party or any guarantor of any of
such reimbursement obligations, (viii) any lack of validity or enforceability of
any of such
- 20 -
reimbursement obligations against any other Account Party or any guarantor of
any of such reimbursement obligations, or (ix) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of the
obligations of any Account Party hereunder.
Neither the Administrative Agent, nor any Lender nor any of their
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Syndicated Letter of Credit or
any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Syndicated Letter of
Credit (including any document required to make a drawing thereunder), any error
in interpretation of technical terms or any consequence arising from causes
beyond their control; PROVIDED that the foregoing shall not be construed to
excuse the Administrative Agent or a Lender from liability to any Account Party
to the extent of any direct damages (as opposed to consequential damages, claims
in respect of which are hereby waived by each Account Party to the extent
permitted by applicable law) suffered by such Account Party that are caused by
the gross negligence or willful misconduct of the Administrative Agent or a
Lender. The parties hereto expressly agree that:
(i) the Administrative Agent may accept documents that appear on
their face to be in substantial compliance with the terms of a
Syndicated Letter of Credit without responsibility for further
investigation, regardless of any notice or information to the contrary,
and may make payment upon presentation of documents that appear on their
face to be in substantial compliance with the terms of such Syndicated
Letter of Credit;
(ii) the Administrative Agent shall have the right, in its sole
discretion, to decline to accept such documents and to make such payment
if such documents are not in strict compliance with the terms of such
Syndicated Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Administrative Agent when determining whether drafts
and other documents presented under a Syndicated Letter of Credit comply
with the terms thereof (and the parties hereto hereby waive, to the
extent permitted by applicable law, any standard of care inconsistent
with the foregoing).
(c) DISBURSEMENT PROCEDURES. The Administrative Agent shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under any Syndicated Letter of
Credit. The Administrative Agent shall promptly after such examination (i)
notify each of the Lenders and the relevant Account Party by telephone
(confirmed by telecopy) of such demand for payment and (ii) deliver to each
Lender a copy of each document purporting to represent a demand for payment
under such Syndicated Letter of Credit. With respect to any drawing properly
made under a Syndicated Letter of Credit, each Lender will make an LC
Disbursement in respect of such Syndicated Letter of Credit in accordance with
its liability under such Syndicated Letter of Credit and this Agreement, such LC
Disbursement to be made to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make any such LC Disbursement available to the beneficiary of such
Syndicated Letter of Credit by promptly crediting the amounts so received, in
like funds, to the account identified by such beneficiary in
- 21 -
connection with such demand for payment. Promptly following any LC Disbursement
by any Lender in respect of any Syndicated Letter of Credit, the Administrative
Agent will notify the relevant Account Party of such LC Disbursement; PROVIDED
that any failure to give or delay in giving such notice shall not relieve any
Account Party of its obligation to reimburse the Lenders with respect to any
such LC Disbursement.
(d) INTERIM INTEREST. If any LC Disbursement with respect to a
Syndicated Letter of Credit is made, then, unless the relevant Account
Party shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that such Account Party reimburses such LC
Disbursement, at the rate per annum equal to (i) 1% PLUS the Base Rate
to but excluding the date three Business Days after such LC Disbursement
is made and (ii) from and including the date three Business Days after
such LC Disbursement is made, 3% PLUS the Base Rate.
SECTION 2.04. NON-SYNDICATED LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth
herein, at the request of any Account Party the Lenders agree at any time and
from time to time during the Availability Period to issue Non-Syndicated Letters
of Credit for the account of such Account Party (it being understood that
Non-Syndicated Letters of Credit may be issued, or be outstanding, for the
account of more than one of the Account Parties at any time). Each
Non-Syndicated Letter of Credit shall be in such form as is consistent with the
requirements of the applicable regulatory authorities in the relevant
jurisdiction as requested by the relevant Account Party or as otherwise agreed
to by the Administrative Agent and such Account Party. Each Non-Syndicated
Letter of Credit shall be issued by the respective Issuing Lender thereof,
through the Administrative Agent as provided in Section 2.04(c), in the amount
of such Issuing Lender's Applicable Percentage of the aggregate amount of
Non-Syndicated Letters of Credit being requested by such Account Party at such
time (it being understood that in connection with each such request for the
issuance of Non-Syndicated Letters of Credit, a Non-Syndicated Letter of Credit
will be issued, through the Administrative Agent as provided herein, by each
Lender under the Letter of Credit Tranche), and (notwithstanding anything herein
or in any other Letter of Credit Document to the contrary) such Non-Syndicated
Letter of Credit shall be the sole responsibility of such Issuing Lender (and of
no other Person, including any other Lender or the Administrative Agent).
Notwithstanding anything to the contrary in this Agreement, no Non-Syndicated
Letter of Credit may be requested hereunder for any jurisdiction unless SCA
provides evidence reasonably satisfactory to the Administrative Agent that
Syndicated Letters of Credit do not comply with the insurance laws of such
jurisdiction.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION. To
request the issuance of Non-Syndicated Letters of Credit (or the amendment,
renewal or extension of outstanding Non-Syndicated Letters of Credit), an
Account Party shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Administrative Agent) to the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of Non-Syndicated Letters of Credit, or identifying the
Non-Syndicated Letters of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension, as the case
may be (which shall be a Business Day), the date on which such Non-Syndicated
Letters of Credit are to expire (which shall comply with paragraph (e) of this
Section), the aggregate
- 22 -
amount of all Non-Syndicated Letters of Credit to be issued in connection with
such request, the name and address of the beneficiary thereof and the terms and
conditions of (and such other information as shall be necessary to prepare,
amend, renew or extend, as the case may be) such Non-Syndicated Letters of
Credit. The Administrative Agent shall give prompt notice of each such request
to the Lenders under the Letter of Credit Tranche. If Non-Syndicated Letters of
Credit issued in connection with the same request shall provide for the
automatic extension of the expiry date thereof unless the Issuing Lender thereof
or the Administrative Agent gives notice that such expiry date shall not be
extended, then the Administrative Agent (acting on behalf of the relevant
Issuing Lenders) will give such notice for all such Non-Syndicated Letters of
Credit if requested to do so by the Required Lenders of the Letter of Credit
Tranche in a notice given to the Administrative Agent not more than 60 days, but
not less than 45 days, prior to the current expiry date of such Non-Syndicated
Letter of Credit. If requested by the Administrative Agent, such Account Party
also shall submit a letter of credit application on Citibank's standard form in
connection with any request for a Non-Syndicated Letter of Credit. In the event
of any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by any Account Party to, or entered into by any Account
Party with, the Administrative Agent (acting on behalf of the relevant Issuing
Lenders) relating to any Non-Syndicated Letter of Credit, the terms and
conditions of this Agreement shall control.
(c) ISSUANCE AND ADMINISTRATION. Each Non-Syndicated Letter of
Credit shall be executed and delivered by the Administrative Agent (which term,
for purposes of this Section 2.04 and any other provisions of this Agreement,
including Article VIII and Section 9.03, relating to Non-Syndicated Letters of
Credit, shall be deemed to refer to, unless the context otherwise requires,
Citibank acting in its capacity as the Administrative Agent or in its individual
capacity, in either case as attorney-in-fact for the respective Issuing Lender),
acting through any duly authorized officer of Citibank, in the name and on
behalf of, and as attorney-in-fact for, the Issuing Lender party to such
Non-Syndicated Letter of Credit. With respect to each Non-Syndicated Letter of
Credit, the Administrative Agent shall act in the name and on behalf of, and as
attorney-in-fact for, the Lender issuing such Non-Syndicated Letter of Credit
and in that capacity shall, and each Lender hereby irrevocably appoints and
designates the Administrative Agent, acting through any duly authorized officer
of Citibank, to so act in the name and on behalf of, and as attorney-in-fact
for, each Lender with respect to each Non-Syndicated Letter of Credit to be
issued by such Lender hereunder and, without limiting any other provision of
this Agreement, to, (i) execute and deliver in the name and on behalf of such
Lender each Non-Syndicated Letter of Credit to be issued by such Lender
hereunder, (ii) receive drafts, other demands for payment and/or other documents
presented by the beneficiary thereunder, (iii) determine whether such drafts,
demands and/or documents are in compliance with the terms and conditions
thereof, (iv) notify the beneficiary of any such Non-Syndicated Letter of Credit
of the expiration or non-renewal thereof in accordance with the terms thereof,
(v) advise such beneficiary of any change in the office for presentation of
drafts under any such Non-Syndicated Letter of Credit, (vi) enter into with the
relevant Account Party any such letter of credit application or similar
agreement with respect to any such Non-Syndicated Letter of Credit as the
Administrative Agent shall require, (vii) remit to the beneficiary of any such
Non-Syndicated Letter of Credit any payment made by such Lender and received by
the Administrative Agent in connection with a drawing thereunder, (viii) perform
any and all other acts which in the sole opinion of the Administrative Agent may
be necessary or incidental to the performance of the powers herein granted with
respect to such Non-Syndicated Letter of Credit, (ix) notify such
- 23 -
Lender and the relevant Account Party that a valid drawing has been made and the
date that the related LC Disbursement is to be made; PROVIDED that the
Administrative Agent shall have no obligation or liability for any LC
Disbursement under such Non-Syndicated Letter of Credit and (x) delegate to any
agent of Citibank and such agent's Related Parties, or any of them, the
performance of any of such powers. Each Lender hereby ratifies and confirms (and
undertakes to ratify and confirm from time to time upon the request of the
Administrative Agent) whatsoever the Administrative Agent (or any Related Party
thereof) shall do or purport to do by virtue of the power herein granted.
Promptly upon the request of the Administrative Agent, each Lender will furnish
to the Administrative Agent such powers of attorney or other evidence as any
beneficiary of any Non-Syndicated Letter of Credit may reasonably request in
order to demonstrate that the Administrative Agent has the power to act as
attorney-in-fact for such Lender with respect to such Non-Syndicated Letter of
Credit (together with such evidence of the due authorization, execution,
delivery and validity of such power of attorney as the Administrative Agent may
reasonably request). Without limiting any provision of Article VIII, the
Administrative Agent may perform any and all of its duties and exercise any and
all of its rights and powers under this Section through its Related Parties.
(d) LIMITATIONS ON AMOUNTS. Non-Syndicated Letters of Credit
shall be issued, amended, renewed or extended only if (and upon such issuance,
amendment, renewal or extension of each Non-Syndicated Letter of Credit the
Account Parties shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension, (i) the aggregate LC
Exposure of the Lenders under the Letter of Credit Tranche shall not exceed the
Letter of Credit Commitments and (ii) the LC Exposure (excluding any Alternative
Currency LC Exposure) of each Lender under the Letter of Credit Tranche shall
not exceed its Applicable Percentage of the Letter of Credit Commitments.
(e) EXPIRY DATE. Each Non-Syndicated Letter of Credit shall
expire at or prior to the close of business on the date one year after the date
of the issuance of such Non-Syndicated Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension);
PROVIDED that in no event shall any Non-Syndicated Letter of Credit have an
expiry date after the first anniversary of the Commitment Termination Date.
(f) PARTICIPATIONS. By the issuance of a Non-Syndicated Letter of
Credit (or an amendment to a Non-Syndicated Letter of Credit increasing the
amount thereof) by the respective Issuing Lender, and without any further action
on the part of such Issuing Lender or the Lenders, such Issuing Lender hereby
grants to each Lender (other than the Issuing Lender itself), and each such
Lender hereby acquires from such Issuing Lender, a participation in such
Non-Syndicated Letter of Credit equal to such Lender's Applicable Percentage of
the aggregate amount available to be drawn under such Non-Syndicated Letter of
Credit. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Non-Syndicated Letter of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Non-Syndicated Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for account of the respective Issuing
Lender, such Lender's Applicable Percentage of each LC Disbursement made by an
Issuing Lender in respect of any Non-Syndicated Letter of Credit promptly upon
the request of the Administrative Agent at any time from the time such LC
- 24 -
Disbursement is made until such LC Disbursement is reimbursed by the relevant
Account Party or at any time after any reimbursement payment is required to be
refunded to such Account Party for any reason. Such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Promptly
following receipt by the Administrative Agent of any payment from the relevant
Account Party pursuant to the next following paragraph, the Administrative Agent
shall distribute such payment to the respective Issuing Lender or, to the extent
that the Lenders have made payments pursuant to this paragraph to reimburse such
Issuing Lender, then to such Lenders and such Issuing Lender as their interests
may appear. Any payment made by a Lender pursuant to this paragraph to reimburse
an Issuing Lender for any LC Disbursement shall not relieve any Account Party of
its obligation to reimburse such LC Disbursement.
(g) REIMBURSEMENT. If any Issuing Lender shall make any LC
Disbursement in respect of any Non-Syndicated Letter of Credit issued for the
account of any Account Party, such Account Party agrees that it shall reimburse
such Issuing Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
noon, New York City time, on the Business Day immediately following the day that
such Account Party receives such notice.
If any Account Party fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from such Account Party in respect thereof and such
Lender's Applicable Percentage thereof.
(h) OBLIGATIONS ABSOLUTE. Each Account Party's obligation to
reimburse LC Disbursements in respect of any Non-Syndicated Letter of Credit
issued for its account as provided in paragraph (g) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Non-Syndicated Letter of Credit, or any term or provision therein, (ii) any
draft or other document presented under a Non-Syndicated Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by the Issuing
Lender under a Non-Syndicated Letter of Credit against presentation of a draft
or other document that does not comply strictly with the terms of such
Non-Syndicated Letter of Credit (PROVIDED that no Account Party shall be
obligated to reimburse such LC Disbursements unless payment is made against
presentation of a draft or other document that at least substantially complies
with the terms of such Non-Syndicated Letter of Credit), (iv) at any time or
from time to time, without notice to any Account Party, the time for any
performance of or compliance with any of such reimbursement obligations of any
other Account Party being waived, extended or renewed, (v) any of such
reimbursement obligations of any other Account Party being amended or otherwise
modified in any respect, or any guarantee of any of such reimbursement
obligations being released, substituted or exchanged in whole or in part or
otherwise dealt with, (vi) the occurrence of any Default, (vii) the existence of
any proceedings of the type described in clause (g) or (h) of Article VII with
respect to any other Account Party or any guarantor of any of such reimbursement
obligations, (viii) any lack of validity or enforceability of any of such
reimbursement obligations against any other Account Party or any guarantor of
any of such reimbursement obligations, or (ix) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of the
obligations of any Account Party hereunder.
- 25 -
Neither the Administrative Agent, the Lenders nor any Issuing
Lender, nor any of their respective Related Parties, shall have any liability or
responsibility by reason of or in connection with the payment or failure to make
any payment under a Non-Syndicated Letter of Credit (irrespective of any of the
circumstances referred to in the preceding sentence) as a result of determining
whether drafts or other documents presented under a Non-Syndicated Letter of
Credit comply with the terms thereof, or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Non-Syndicated Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of an Issuing
Lender; PROVIDED that the foregoing shall not be construed to excuse the
Administrative Agent or a Lender from liability to any Account Party to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the relevant Account Party to the extent
permitted by applicable law) suffered by such Account Party that are caused by
the gross negligence or willful misconduct of the Administrative Agent or a
Lender when determining whether drafts and other documents presented under a
Non-Syndicated Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that:
(i) the Administrative Agent may accept documents that appear on
their face to be in substantial compliance with the terms of a
Non-Syndicated Letter of Credit without responsibility for further
investigation, regardless of any notice or information to the contrary,
and may make payment upon presentation of documents that appear on their
face to be in substantial compliance with the terms of such
Non-Syndicated Letter of Credit;
(ii) the Administrative Agent shall have the right, in its sole
discretion, to decline to accept such documents and to make such payment
if such documents are not in strict compliance with the terms of such
Non-Syndicated Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Administrative Agent when determining whether drafts
and other documents presented under a Non-Syndicated Letter of Credit
comply with the terms thereof (and the parties hereto hereby waive, to
the extent permitted by applicable law, any standard of care
inconsistent with the foregoing).
(i) DISBURSEMENT PROCEDURES. The Administrative Agent shall,
within a reasonable time following its receipt thereof, examine all documents
purporting to represent a demand for payment under any Non-Syndicated Letter of
Credit. The Administrative Agent shall promptly after such examination (i)
notify each of the Lenders and the relevant Account Party by telephone
(confirmed by telecopy) of such demand for payment and (ii) deliver to each
Lender (including the Issuing Lender) a copy of each document purporting to
represent a demand for payment under such Non-Syndicated Letter of Credit. With
respect to any drawing properly made under a Non-Syndicated Letter of Credit,
the Issuing Lender thereof will make an LC Disbursement in respect of such
Non-Syndicated Letter of Credit in accordance with its liability under such
Non-Syndicated Letter of Credit and this Agreement, such LC Disbursement to be
made to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders. The Administrative Agent will make
any such LC Disbursement
- 26 -
available to the beneficiary of such Non-Syndicated Letter of Credit by promptly
crediting the amounts so received, in like funds, to the account identified by
such beneficiary in connection with such demand for payment. Promptly following
any LC Disbursement by any Issuing Lender in respect of any Non-Syndicated
Letter of Credit, the Administrative Agent will notify the relevant Account
Party of such LC Disbursement; PROVIDED that any failure to give or delay in
giving such notice shall not relieve any Account Party of its obligation to
reimburse such Issuing Lender with respect to any such LC Disbursement.
(j) INTERIM INTEREST. If any LC Disbursement with respect to a
Non-Syndicated Letter of Credit is made, then, unless the relevant Account Party
in respect of such Non-Syndicated Letter of Credit shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that such Account Party
reimburses such LC Disbursement, at the rate per annum equal to (i) 1% PLUS the
Base Rate to but excluding the date three Business Days after such LC
Disbursement is made and (ii) from and including the date three Business Days
after such LC Disbursement is made, 3% PLUS the Base Rate.
(k) ADJUSTMENTS TO NON-SYNDICATED LETTERS OF CREDIT. Upon the
assignment by a Lender of all or a portion of its Letter of Credit Commitment
and its interests in the Non-Syndicated Letters of Credit pursuant to an
Assignment and Assumption, (i) the relevant Account Party shall, at the
reasonable request of the Administrative Agent, execute such documents as may be
necessary in connection with amendments to each Non-Syndicated Letter of Credit
issued by such assigning Lender then outstanding hereunder (or to replace each
such Non-Syndicated Letter of Credit with a new Non-Syndicated Letter of Credit
of such assigning Lender) to reflect such assigning Lender's Letter of Credit
Commitment and with a face amount based upon such Lender's Applicable Percentage
after giving effect to such assignment and/or (ii) as applicable, a new Non
Syndicated Letter of Credit shall be issued hereunder as of the effective date
of such assignment by the assignee Lender which has undertaken a new or
incremental Letter of Credit Commitment in connection with such assignment in a
face amount based upon such assignee Lender's Applicable Percentage of the
Letter of Credit Commitments after giving effect to such assignment.
SECTION 2.05. PARTICIPATED LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth
herein, any Account Party may request the Issuing Lender to issue, at any time
and from time to time during the Availability Period, Participated Letters of
Credit for its own account. Each Participated Letter of Credit shall be in such
form as is consistent with the requirements of the applicable regulatory
authorities in the relevant jurisdiction as requested by the relevant Account
Party or as otherwise agreed to by the Administrative Agent and such Account
Party. Participated Letters of Credit issued hereunder shall constitute
utilization of the Letter of Credit Commitments.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL OR EXTENSION. To
request the issuance of a Participated Letter of Credit (or the amendment,
renewal or extension of an outstanding Participated Letter of Credit), an
Account Party shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and the Administrative Agent (reasonably in
advance of
- 27 -
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Participated Letter of Credit, or identifying the
Participated Letter of Credit to be amended, renewed or extended, and specifying
the date of issuance, amendment, renewal or extension (which shall be a Business
Day), the date on which such Participated Letter of Credit is to expire (which
shall comply with paragraph (d) of this Section), the amount of such
Participated Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Participated Letter of Credit. The Administrative Agent shall give
prompt notice of each such request to the Lenders under the Letter of Credit
Tranche. If requested by the Issuing Lender, such Account Party also shall
submit a letter of credit application on the Issuing Lender's standard form in
connection with any request for a Participated Letter of Credit. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by such Account Party to, or entered into by any Account
Party with, the Issuing Lender relating to any Participated Letter of Credit,
the terms and conditions of this Agreement shall control.
(c) LIMITATIONS ON AMOUNTS. A Participated Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Participated Letter of Credit, the relevant Account
Party shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the sum of the LC Exposure of
the Issuing Lender with respect to Participated Letters of Credit (determined
for these purposes without giving effect to the participations therein of the
Lenders pursuant to paragraph (e) of this Section) shall not exceed the Letter
of Credit Commitments, (ii) the aggregate LC Exposure of the Lenders under the
Letter of Credit Tranche shall not exceed the Letter of Credit Commitments and
(iii) the LC Exposure (excluding any Alternative Currency LC Exposure) of each
Lender under the Letter of Credit Tranche shall not exceed its Applicable
Percentage of the Letter of Credit Commitments.
(d) EXPIRY DATE. Each Participated Letter of Credit shall expire
at or prior to the close of business on the date one year after the date of the
issuance of such Participated Letter of Credit (or, in the case of any renewal
or extension thereof, one year after such renewal or extension); PROVIDED that
in no event shall any Participated Letter of Credit have an expiry date after
the first anniversary of the Commitment Termination Date.
(e) PARTICIPATIONS. By the issuance of a Participated Letter of
Credit (or an amendment to a Participated Letter of Credit increasing the amount
thereof) by the Issuing Lender, and without any further action on the part of
the Issuing Lender or the Lenders, the Issuing Lender hereby grants to each
Lender, and each Lender hereby acquires from the Issuing Lender, a participation
in such Participated Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Participated
Letter of Credit. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Participated
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Participated Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments. In consideration and in furtherance
of the foregoing, each Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for account of the Issuing Lender, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing
Lender in respect of any Participated
- 28 -
Letter of Credit promptly upon the request of the Issuing Lender at any time
from the time such LC Disbursement is made until such LC Disbursement is
reimbursed by the relevant Account Party or at any time after any reimbursement
payment is required to be refunded to such Account Party for any reason. Such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Promptly following receipt by the Administrative Agent of any
payment from the relevant Account Party pursuant to the next following
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Lender or, to the extent that the Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Lender, then to such Lenders and the Issuing
Lender as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Lender for any LC Disbursement shall not
relieve any Account Party of its obligation to reimburse such LC Disbursement.
(f) REIMBURSEMENT. If any Lender shall make any LC Disbursement
in respect of any Participated Letter of Credit, regardless of the identity of
the Account Party of such Participated Letter of Credit, the relevant Account
Party agrees that it shall reimburse such Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than noon, New York City time, on (i) the Business Day
that such Account Party received notice of such LC Disbursement, if such notice
is received prior to 10:00 a.m., New York City time, or (ii) the Business Day
immediately following the day that such Account Party receives such notice, if
such notice is not received prior to such time.
If any Account Party fail to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from such Account Party in respect thereof and such
Lender's Applicable Percentage thereof.
(g) OBLIGATIONS ABSOLUTE. Each Account Party's obligation to
reimburse LC Disbursements in respect of any Participated Letter of Credit
issued for its account as provided in paragraph (f) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Participated Letter of Credit, or any term or provision therein, (ii) any draft
or other document presented under a Participated Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Lender under a
Participated Letter of Credit against presentation of a draft or other document
that does not comply strictly with the terms of such Participated Letter of
Credit (PROVIDED that no Account Party shall be obligated to reimburse such LC
Disbursements unless payment is made against presentation of a draft or other
document that at least substantially complies with the terms of such
Participated Letter of Credit), (iv) at any time or from time to time without
notice to any Account Party, the time for any performance of or compliance with
any of such reimbursement obligations of any other Account Party shall be
waived, extended or renewed, (v) any of such reimbursement obligations of any
other Account Party shall be amended or otherwise modified in any respect, or
any guarantee of any of such reimbursement obligations shall be released,
substituted or exchanged in whole or in part or otherwise dealt with, (vi) the
occurrence of any Default, (vii) the existence of any proceedings of the type
described in clause (g) or (h) of Article VII with respect to any other Account
Party or any guarantor of any of such reimbursement obligations, (viii) any lack
of validity or enforceability of any of such reimbursement obligations against
any other Account Party or any guarantor of any of such reimbursement
obligations, or (ix) any other event or circumstance whatsoever,
- 29 -
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of the
obligations of any Account Party hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing
Lender, nor any of their respective Related Parties, shall have any liability or
responsibility by reason of or in connection with the payment or failure to make
any payment under a Participated Letter of Credit (irrespective of any of the
circumstances referred to in the preceding sentence) as a result of determining
whether drafts or other documents presented under a Participated Letter of
Credit comply with the terms thereof, or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Participated Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of the Issuing
Lender; PROVIDED that the foregoing shall not be construed to excuse the Issuing
Lender from liability to the relevant Account Party to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by each Account Party to the extent permitted by applicable law)
suffered by such Account Party that are caused by the Issuing Lender's gross
negligence or willful misconduct when determining whether drafts and other
documents presented under a Participated Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on their
face to be in substantial compliance with the terms of a Participated
Letter of Credit without responsibility for further investigation,
regardless of any notice or information to the contrary, and may make
payment upon presentation of documents that appear on their face to be
in substantial compliance with the terms of such Participated Letter of
Credit;
(ii) the Issuing Lender shall have the right, in its sole
discretion, to decline to accept such documents and to make such payment
if such documents are not in strict compliance with the terms of such
Participated Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and
other documents presented under a Participated Letter of Credit comply
with the terms thereof (and the parties hereto hereby waive, to the
extent permitted by applicable law, any standard of care inconsistent
with the foregoing).
(h) DISBURSEMENT PROCEDURES. The Issuing Lender shall, within a
reasonable time following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Participated Letter of Credit. The
Issuing Lender shall promptly after such examination notify the Administrative
Agent and the relevant Account Party by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Lender has made or will make a
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve any Account Party of its obligation to reimburse
the Issuing Lender and the Lenders with respect to any such LC Disbursement.
(i) INTERIM INTEREST. If any LC Disbursement is made with respect
to a Participated Letter of Credit, then, unless the relevant Account Party
shall reimburse such LC Disbursement in full on the date such LC Disbursement is
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but
- 30 -
excluding the date such Account Party reimburses such LC Disbursement, at the
rate per annum equal to (i) 1% plus the Base Rate to but excluding the date
three Business Days after such LC Disbursement is made and (ii) from and
including the date three Business Days after such LC Disbursement is made, 3%
plus the Base Rate. Interest accrued pursuant to this paragraph shall be for
account of the Issuing Lender, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (f) of this Section to
reimburse the Issuing Lender shall be for account of such Lender to the extent
of such payment.
(j) REPLACEMENT OF THE ISSUING LENDER. The Issuing Lender may be
replaced at any time by written agreement between SCA, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the relevant Account Party
or Account Parties shall pay all unpaid fees accrued for account of the replaced
Issuing Lender pursuant to Section 2.14(d). From and after the effective date of
any such replacement, (i) the successor Issuing Lender shall have all the rights
and obligations of the replaced Issuing Lender under this Agreement with respect
to Participated Letters of Credit to be issued thereafter and (ii) references
herein to the term "Issuing Lender" shall be deemed to refer to such successor
or to any previous Issuing Lender, or to such successor and all previous Issuing
Lenders, as the context shall require. After the replacement of an Issuing
Lender hereunder, the replaced Issuing Lender shall remain a party hereto and
shall continue to have all the rights and obligations of an Issuing Lender under
this Agreement with respect to Participated Letters of Credit issued by it prior
to such replacement but shall not be required to issue additional Participated
Letters of Credit.
(k) ADJUSTMENT OF APPLICABLE PERCENTAGES. Notwithstanding
anything herein to the contrary, upon the assignment by a Lender of all or a
portion of its Letter of Credit Commitment and its interests in the Participated
Letters of Credit pursuant to an Assignment and Assumption, the respective
assigning Lender's participation in each Participated Letter of Credit then
outstanding shall automatically be adjusted to reflect, and the respective
assignee Lender shall be deemed to acquire a participation in each such
Participated Letter of Credit in an amount equal to, its Applicable Percentage
after giving effect to such assignment.
SECTION 2.06. ALTERNATIVE CURRENCY LETTERS OF CREDIT.
(a) REQUESTS FOR OFFERS. From time to time during the
Availability Period, an Account Party may request any or all of the Lenders to
make offers to issue an Alternative Currency Letter of Credit for account of
such Account Party. Each Lender may, but shall have no obligation to, make such
offers on terms and conditions that are satisfactory to such Lender, and such
Account Party may, but shall have no obligation to, accept any such offers. An
Alternative Currency Letter of Credit shall be issued, amended, renewed or
extended only if (and upon such issuance, amendment, renewal or extension of
each Alternative Currency Letter of Credit the Account Parties shall be deemed
to represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, the aggregate LC Exposure of the Lenders under the Letter
of Credit Tranche shall not exceed the Letter of Credit Commitments. Each such
Alternative Currency Letter of Credit shall be issued, and subsequently,
renewed, extended, amended and confirmed, on such terms as SCA, the relevant
Account Party and such Lender shall agree, including expiry, drawing conditions,
reimbursement, interest, fees and provision of cover; PROVIDED that the expiry
of any Alternative Currency Letter of Credit shall not be later
- 31 -
than the one-year anniversary from the date of issuance thereof (or, in the case
of any renewal or extension thereof, one-year after such renewal or extension).
(b) REPORTS TO ADMINISTRATIVE AGENT. Each Account Party shall
deliver to the Administrative Agent and each of the Lenders a report in respect
of each Alternative Currency Letter of Credit issued for the account of such
Account Party (an "ALTERNATIVE CURRENCY LETTER OF CREDIT REPORT") on and as of
the date (i) on which such Alternative Currency Letter of Credit is issued, (ii)
of the issuance, renewal, extension or amendment of a Syndicated Letter of
Credit or a Non-Syndicated Letter of Credit, if any Alternative Currency Letter
of Credit is then outstanding and (iii) on which the Letter of Credit
Commitments are to be reduced pursuant to Section 2.11, specifying for each such
Alternative Currency Letter of Credit (after giving effect to issuance thereof,
as applicable):
(A) the date on which such Alternative Currency Letter of Credit
was or is being issued;
(B) the Alternative Currency of such Alternative Currency Letter
of Credit;
(C) the aggregate undrawn amount of such Alternative Currency
Letter of Credit (in such Alternative Currency);
(D) the aggregate unpaid amount of LC Disbursements under such
Alternative Currency Letter of Credit (in such Alternative Currency);
(E) the Alternative Currency LC Exposure (in Dollars) in respect
of such Alternative Currency Letter of Credit; and
(F) the aggregate amount of Alternative Currency LC Exposures (in
Dollars).
Each Alternative Currency Letter of Credit Report shall be
delivered to the Administrative Agent and each of the Lenders by 10:00 a.m. (New
York City time) on the date on which it is required to be delivered.
SECTION 2.07. LOANS AND BORROWINGS.
(a) LOANS. Subject to the terms and conditions set forth herein,
each Lender under the Revolving Credit Tranche agrees to make Loans to an
Account Party from time to time during the Availability Period in an aggregate
principal amount that will not result in (i) such Lender's Revolving Credit
Exposure exceeding such Lender's Applicable Percentage of the Revolving Credit
Commitments or (ii) the aggregate Revolving Credit Exposure of the Lenders under
the Revolving Credit Tranche exceeding the Revolving Credit Commitments. Loans
may be made, or be outstanding, to more than one of the Account Parties at any
time. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Account Parties may borrow, prepay and reborrow Loans under
the Revolving Credit Tranche.
(b) OBLIGATIONS OF LENDERS. Except as provided herein, each Loan
shall be made as part of a Borrowing consisting of Loans of the same Type made
by the Lenders under the Revolving Credit Tranche ratably in accordance with
their respective Applicable Percentage of the Revolving Credit Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; PROVIDED that the
- 32 -
Revolving Credit Commitments of the Lenders to make Loans hereunder are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(c) TYPE OF LOANS. Subject to Section 2.15, each Borrowing shall
be constituted entirely of BR Loans or of Eurodollar Loans as any Account Party
may request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the relevant Account Party to repay such Loan in
accordance with the terms of this Agreement.
(d) MINIMUM AMOUNTS; LIMITATION ON NUMBER OF BORROWINGS. Each
Eurodollar Borrowing shall be in an aggregate amount of $5,000,000 or a larger
multiple of $1,000,000. Each BR Borrowing shall be in an aggregate amount equal
to $5,000,000 or a larger multiple of $1,000,000; PROVIDED that a BR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
Revolving Credit Commitments. Borrowings of more than one Type may be
outstanding at the same time; PROVIDED that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding.
(e) LIMITATIONS ON INTEREST PERIODS. Notwithstanding any other
provision of this Agreement, no Account Party shall be entitled to request (or
to elect to convert to or continue as a Eurodollar Borrowing) any Borrowing if
the Interest Period requested therefor would end after the Commitment
Termination Date.
SECTION 2.08. REQUESTS FOR BORROWINGS.
(a) NOTICE BY THE ACCOUNT PARTY. To request a Borrowing, the
relevant Account Party shall notify the Administrative Agent of such request
(each, a "BORROWING REQUEST") by telephone (i) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days
before the date of the proposed Borrowing or (ii) in the case of a BR Borrowing,
not later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing; PROVIDED that any such notice of a BR Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.03(a) may be
given not later than 11:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by SCA.
(b) CONTENT OF BORROWING REQUESTS. Each telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.07:
(i) the relevant Account Party;
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be a BR Borrowing or a
Eurodollar Borrowing;
- 33 -
(v) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period" and permitted under Section 2.07(e); and
(vi) the location and number of such Account Party's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.09.
(c) NOTICE BY THE ADMINISTRATIVE AGENT TO THE LENDERS. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
(d) FAILURE TO ELECT. If no election as to the Type of a
Borrowing is specified, then the requested Borrowing shall be a BR Borrowing. If
no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the requested Borrowing shall be made instead as a BR Borrowing.
SECTION 2.09. FUNDING OF BORROWINGS.
(a) FUNDING BY LENDERS. Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time (or 1:00 p.m., New
York City time with respect to BR Loans requested by the relevant Account Party
no later than 11:00 a.m. on the same day), to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the relevant Account
Party by promptly crediting the amounts so received, in like funds, to an
account of such Account Party maintained with the Administrative Agent in New
York City and designated by such Account Party in the applicable Borrowing
Request.
(b) PRESUMPTION BY THE ADMINISTRATIVE AGENT. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing (or in the case of any BR Borrowing, on or prior
to the proposed date of such Borrowing) that such Lender will not make available
to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the relevant Account Party a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the relevant Account Party severally agrees to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to such Account Party to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or
(ii) in the case of such Account Party, the interest rate applicable to BR
Loans. If such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
- 34 -
SECTION 2.10. INTEREST ELECTIONS.
(a) ELECTIONS BY THE ACCOUNT PARTY. The Loans constituting each
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have the Interest
Period specified in such Borrowing Request. Thereafter, the relevant Account
Party 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 Borrowing, may elect the Interest Period therefor, all as provided in
this Section. The relevant Account Party may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
constituting such Borrowing, and the Loans constituting each such portion shall
be considered a separate Borrowing.
(b) NOTICE OF ELECTIONS. To make an election pursuant to this
Section, the relevant Account Party shall notify the Administrative Agent of
such election (each, an "INTEREST ELECTION REQUEST") by telephone by the time
that a Borrowing Request would be required under Section 2.08 if such Account
Party were requesting a Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by SCA.
(c) CONTENT OF INTEREST ELECTION REQUESTS. Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.07:
(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) of this paragraph 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 BR Borrowing or
a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period" and permitted under Section 2.07(e).
(d) NOTICE BY THE ADMINISTRATIVE AGENT TO THE LENDERS. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) FAILURE TO ELECT; EVENTS OF DEFAULT. If the relevant Account
Party fails to deliver a timely and complete Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
therefor, then, unless such Borrowing is repaid as provided herein, at the end
of such Interest Period such Borrowing shall be converted to a BR Borrowing by
such Account Party. Notwithstanding any contrary provision hereof, if an Event
of Default
- 35 -
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies SCA, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to a BR Borrowing at the end of the Interest Period therefor.
SECTION 2.11. TERMINATION AND REDUCTION OF THE COMMITMENTS.
(a) SCHEDULED TERMINATION. Unless previously terminated, the
Commitments shall terminate at the close of business on the Commitment
Termination Date.
(b) VOLUNTARY TERMINATION OR REDUCTION. SCA may at any time
terminate, or from time to time reduce, the Letter of Credit Commitments and/or
the Revolving Credit Commitments; PROVIDED that (i) each such reduction shall be
in an amount that is $10,000,000 or a larger multiple of $1,000,000, (ii) SCA
shall not terminate or reduce the Letter of Credit Commitments if the aggregate
LC Exposure would exceed the Letter of Credit Commitments and (iii) SCA shall
not reduce the Revolving Credit Commitments if the aggregate Revolving Credit
Exposure would exceed the Revolving Credit Commitments. SCA shall notify the
Administrative Agent of any election to terminate or reduce any of the
Commitments under this paragraph (b) at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof; PROVIDED that upon the earlier of (i) the
termination of the Commitments of any Tranche and (ii) the Commitment
Termination Date, the Commitments of such Tranche shall automatically be reduced
to zero. Promptly following receipt of any such notice, the Administrative Agent
shall advise the applicable Lenders of the contents thereof. Each notice
delivered by SCA pursuant to this paragraph (b) shall be irrevocable; PROVIDED
that a notice of termination of any of the Commitments delivered by SCA may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by SCA (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Subject to the proviso in the immediately preceding
sentence, any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments of any Tranche shall be made ratably among the
relevant Lenders in accordance with their respective Commitments of such
Tranche.
SECTION 2.12. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) REPAYMENT. Each Account Party hereby unconditionally promises
to pay to the Administrative Agent for account of the relevant Lenders the
outstanding principal amount of the Loans made to such Account Party on the
Commitment Termination Date.
(b) MANNER OF PAYMENT. Prior to any repayment or prepayment of
any Borrowings hereunder, the relevant Account Party shall select the Borrowing
or Borrowings to be paid and shall notify the Administrative Agent by telephone
(confirmed by telecopy) of such selection not later than 11:00 a.m., New York
City time, three Business Days before the scheduled date of such repayment;
PROVIDED that each repayment of Borrowings shall be applied to repay any
outstanding BR Borrowings before any other Borrowings. If the relevant Account
Party fails to make a timely selection of the Borrowing or Borrowings to be
repaid or prepaid, such payment shall be applied, first, to pay any outstanding
BR Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the
- 36 -
Borrowing with the shortest remaining Interest Period to be repaid first). Each
payment of a Borrowing shall be applied ratably to the Loans included in such
Borrowing.
(c) MAINTENANCE OF RECORDS BY LENDERS. Each Lender shall maintain
in accordance with its usual practice records evidencing the indebtedness of
each Account Party to such Lender resulting from each Loan made by such Lender
to such Account Party, including the amounts of principal and interest payable
and paid to such Lender from time to time hereunder.
(d) MAINTENANCE OF RECORDS BY THE ADMINISTRATIVE AGENT. The
Administrative Agent shall maintain records in which it shall record (i) the
amount of each Loan made to each Account Party hereunder, the Type thereof and
each Interest Period therefor, (ii) the amount of any principal or interest due
and payable or to become due and payable from such Account Party to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for account of the Lenders and each Lender's share thereof.
(e) EFFECT OF ENTRIES. The entries made in the records maintained
pursuant to paragraph (c) or (d) of this Section shall be PRIMA FACIE evidence
of the existence and amounts of the obligations recorded therein; PROVIDED that
the failure of any Lender or the Administrative Agent to maintain such records
or any error therein shall not in any manner affect the obligation of any
Account Party to repay the Loans in accordance with the terms of this Agreement.
(f) PROMISSORY NOTES. Any Lender may request that Loans made by
it to any Account Party be evidenced by a promissory note of such Account Party.
In such event, each Account Party shall prepare, execute and deliver to such
Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form
payable to the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).
SECTION 2.13. PREPAYMENT OF LOANS.
(a) RIGHT TO PREPAY BORROWINGS. Each Account Party shall have the
right at any time and from time to time to prepay any Borrowing made by such
Account Party in whole or in part, subject to the requirements of this Section.
(b) NOTICES, ETC. The relevant Account Party shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, two Business Days before the date of
prepayment or (ii) in the case of prepayment of a BR Borrowing, not later than
11:00 a.m., New York City time, on the date of prepayment (which shall be a
Business Day). Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; PROVIDED that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.11, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.11. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the relevant Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in
- 37 -
an amount that would be permitted in the case of a Borrowing of the same Type as
provided in Section 2.07. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.15 and shall
be made in the manner specified in Section 2.12(b).
SECTION 2.14. FEES.
(a) FACILITY FEE. SCA agrees to pay to the Administrative Agent
for account of each Lender a facility fee which shall accrue at a rate per annum
equal to the Applicable Rate (i) prior to the termination of such Lender's
Commitment, on the daily amount of such Commitment (whether used or unused)
during the period from and including the Effective Date to but excluding the
earlier of the date on which such Commitment terminates and the Commitment
Termination Date and (ii) if such Lender continues to have any LC Exposure or
Revolving Credit Exposure after its Commitment terminates, on the daily amount
of such Lender's LC Exposure and/or Revolving Credit Exposure, as applicable,
from and including the date on which such Lender's Commitment terminates to but
excluding the date on which such Lender ceases to have any LC Exposure and/or
Revolving Credit Exposure, as applicable. Accrued facility fees shall be payable
on each Quarterly Date and on the earlier of the date the Commitments terminate
and the Commitment Termination Date; PROVIDED that any facility fees accruing
after such earlier date shall be payable on demand.
(b) SYNDICATED LETTER OF CREDIT FEES. Each Account Party agrees
to pay to the Administrative Agent for account of each Lender under the Letter
of Credit Tranche a letter of credit fee in respect of each Syndicated Letter of
Credit issued for the account of such Account Party which shall accrue at a rate
per annum equal to the Applicable Rate on the average daily aggregate undrawn
amount of each such outstanding Syndicated Letter of Credit during the period
from and including the Effective Date to but excluding the later of the date on
which such Lender's Letter of Credit Commitment terminates and the date on which
such Lender ceases to have any LC Exposure. Syndicated Letter of Credit fees
accrued through and including each Quarterly Date shall be payable on the third
Business Day following such Quarterly Date, commencing on the first such date to
occur after the Effective Date; PROVIDED that all such fees shall be payable on
the date on which the Letter of Credit Commitments terminate and any such fees
accruing after the date on which the Letter of Credit Commitments terminate
shall be payable on demand.
(c) NON-SYNDICATED LETTER OF CREDIT FEES. Each Account Party
agrees to pay to the Administrative Agent for account of each Lender under the
Letter of Credit Tranche a letter of credit fee in respect of each
Non-Syndicated Letter of Credit issued for the account of such Account Party
which shall accrue at a rate per annum equal to the Applicable Rate on the
average daily aggregate undrawn amount of each such outstanding Non-Syndicated
Letter of Credit during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Letter of Credit
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure. Non-Syndicated Letter of Credit fees accrued through and including
each Quarterly Date shall be payable on the third Business Day following such
Quarterly Date, commencing on the first such date to occur after the Effective
Date; PROVIDED that all such fees shall be payable on the date on which the
Letter of Credit Commitments terminate and any such fees accruing after the date
on which the Letter of Credit Commitments terminate shall be payable on demand.
- 38 -
(d) PARTICIPATED LETTER OF CREDIT FEES. Each Account Party agrees
to pay (i) to the Administrative Agent for account of each Lender under the
Letter of Credit Tranche a participation fee with respect to such Lender's
participations in Participated Letters of Credit issued for the account of such
Account Party, which shall accrue at a rate per annum equal to the Applicable
Rate on the average daily amount of such Lender's LC Exposure in respect of each
such Participated Letter of Credit (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Letter of Credit Commitment terminates and the date on which such Lender ceases
to have any such LC Exposure, and (ii) to the Issuing Lender a fronting fee
which shall accrue at a rate per annum of 0.10% on the average daily amount of
the LC Exposure in respect of each such Participated Letter of Credit (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date of termination of the Letter of Credit Commitments and the date on which
there ceases to be any such LC Exposure. Participation fees and fronting fees
accrued through and including each Quarterly Date shall be payable on the third
Business Day following such Quarterly Date, commencing on the first such date to
occur after the Effective Date; PROVIDED that all such fees shall be payable on
the date on which the Letter of Credit Commitments terminate and any such fees
accruing after the date on which the Letter of Credit Commitments terminate
shall be payable on demand.
(e) LETTER OF CREDIT ADMINISTRATIVE FEES. Each Account Party
agrees to pay to the Administrative Agent, for its own account, within 10
Business Days after demand the Administrative Agent's standard administrative
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit issued for the account of such Account Party or processing of drawings
thereunder.
(f) ADMINISTRATIVE AGENT FEES. SCA agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between SCA and the Administrative Agent.
(g) PAYMENT AND COMPUTATION OF FEES. All fees payable hereunder
shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, in the case of the fees referred to in
paragraphs (a) through (d) of this Section, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances. All fees payable
under paragraphs (a) through (d) of this Section shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
SECTION 2.15. INTEREST.
(a) BR LOANS. The Loans constituting each BR Borrowing shall bear
interest at a rate per annum equal to the Base Rate PLUS the Applicable
Additional Margin, if any.
(b) EURODOLLAR LOANS. The Loans constituting each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period for such Borrowing PLUS the Applicable Margin plus
the Applicable Additional Margin, if any.
(c) DEFAULT INTEREST. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable (other
than in respect of any LC Disbursement
- 39 -
under Sections 2.03(d), and 2.04(j)), and 2.05(i)) by any Account Party
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% PLUS the rate otherwise applicable to such Loan as provided above
or (ii) in the case of any other amount, 2% PLUS the rate applicable to BR Loans
as provided in paragraph (a) of this Section.
(d) PAYMENT OF INTEREST. Accrued interest on each Loan shall be
payable by the relevant Account Party in arrears on each Interest Payment Date
for such Loan and upon the date the Revolving Credit Commitments terminate;
PROVIDED that (x) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (y) in the event of any repayment or prepayment of
any Loan (other than a prepayment of a BR Loan prior to the Commitment
Termination Date), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (z) in the
event of any conversion of any Eurodollar Borrowing prior to the end of the
Interest Period therefor, accrued interest on such Borrowing shall be payable on
the effective date of such conversion.
(e) COMPUTATION. All interest hereunder shall be computed on the
basis of a year of 360 days, except that interest computed by reference to the
Base Rate at times when the Base Rate is based on Citibank's base rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Base Rate or Adjusted LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.16. ALTERNATE RATE OF INTEREST. If prior to the
commencement of the Interest Period for any Eurodollar Borrowing:
(a) the Administrative Agent determines in good faith (which
determination shall be conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
(acting in good faith) that the Adjusted LIBO Rate for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining their respective Loans included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Account Parties
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Account Parties and the Lenders
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
the continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and such Borrowing (unless prepaid) shall be continued as, or
converted to, a BR Borrowing and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as a BR Borrowing.
SECTION 2.17. INCREASED COSTS.
(a) INCREASED COSTS GENERALLY. If any Change in Law shall:
- 40 -
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement, any Letter of Credit (or any
participation therein) or any Eurodollar Loan made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining, or participating in, any Letter of Credit (or
of maintaining any participation therein) or Eurodollar Loan (or of maintaining
its obligation to make any such Loan) or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise), then SCA agrees that they will pay to such Lender such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.
(b) CAPITAL REQUIREMENTS. If any Lender determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement or the
Letters of Credit issued or participated in, or the Loans made, by such Lender
to a level below that which such Lender or such Lender's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy), then from time to time SCA will pay to such Lender such
additional amount or amounts as will compensate such Lender or such Lender's
holding company for any such reduction suffered.
(c) CERTIFICATES FROM LENDERS. A certificate of a Lender setting
forth such Lender's good faith determination of the amount or amounts necessary
to compensate such Lender or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to SCA and
shall be conclusive absent manifest error. SCA shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof by
SCA.
(d) DELAY IN REQUESTS. Failure or delay on the part of any Lender
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; PROVIDED that SCA shall not be
required to compensate a Lender pursuant to this Section for any increased costs
or reductions incurred more than 90 days prior to the date that such Lender
notifies SCA of the Change in Law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
PROVIDED FURTHER that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 90 day period referred to above shall be
extended to include the period of retroactive effect thereof.
(e) APPLICATION TO TAXES. Notwithstanding anything in this
Section to the contrary, this Section shall not apply to Taxes, which shall be
governed solely by Section 2.19.
SECTION 2.18. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other
- 41 -
than on the last day of an Interest Period therefor, (c) the failure to borrow,
convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice is permitted to be
revocable under Section 2.13(b) and is revoked in accordance herewith), or (d)
the assignment as a result of a request by SCA pursuant to Section 2.21(b) of
any Eurodollar Loan other than on the last day of an Interest Period therefor,
then, in any such event, the relevant Account Parties (in the case of clauses
(a), (b) and (c) above) and SCA (in the case of clause (d) above) shall
compensate each Lender for the loss attributable to such event. The loss to any
Lender attributable to any such event shall be deemed to be an amount determined
by such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such
Loan for the period from the date of such payment, conversion, failure or
assignment to the last day of the then current Interest Period for such Loan
(or, in the case of a failure to borrow, convert or continue, the duration of
the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate for such Interest Period, OVER (ii) the amount of interest
that such Lender would earn on such principal amount for such period if such
Lender were to invest such principal amount for such period at the interest rate
that would be bid by such Lender (or an affiliate of such Lender) for Dollar
deposits from other banks in the eurodollar market at the commencement of such
period. A certificate of any Lender setting forth such Lender's good faith
determination of any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the relevant Account Party (or
the Account Parties, as the case may be) and shall be conclusive absent manifest
error. The relevant Account Party (or the Account Parties, as the case may be)
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof by such Account Party or the Account Parties, as the
case may be.
SECTION 2.19. TAXES.
(a) PAYMENTS FREE OF TAXES. Any and all payments by or on account
of any obligation of the Account Parties hereunder shall be made free and clear
of and without deduction for any Indemnified Taxes; PROVIDED that if any Account
Party shall be required to deduct any Indemnified Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Account Party shall make such deductions and
(iii) such Account Party shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) PAYMENT OF OTHER TAXES BY THE ACCOUNT PARTIES. In addition,
each Account Party shall pay any Other Taxes attributable to it to the relevant
Governmental Authority in accordance with applicable law.
(c) INDEMNIFICATION BY THE ACCOUNT PARTIES. The Account Parties
shall indemnify the Administrative Agent and each Lender, within 10 days after
written demand to SCA therefor, for the full amount of any Indemnified Taxes and
Other Taxes (including Indemnified Taxes imposed or asserted on or attributable
to amounts payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes, as the case may be, were correctly or legally imposed or
asserted by the
- 42 -
relevant Governmental Authority. A certificate setting forth the Administrative
Agent's or such Lender's, as the case may be, good faith determination of the
amount of such payment or liability delivered to the relevant Account Party by a
Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender, shall be conclusive as between such Lender or the Administrative Agent,
as the case may be, and such Account Party absent manifest error.
(d) EVIDENCE OF PAYMENTS. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by any Account Party to a
Governmental Authority, the relevant Account Party shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) EXEMPTIONS. Each Lender and the Administrative Agent shall,
at the written request of any Account Party, provide to such Account Party such
form, certification or similar documentation, if any (each duly completed,
accurate and signed) as is currently required by any Account Party Jurisdiction
or any other jurisdiction, or comply with such other requirements, if any, as is
currently applicable in such Account Party Jurisdiction or any other
jurisdiction, in order to obtain an exemption from, or reduced rate of,
deduction, payment or withholding of Indemnified Taxes or Other Taxes to which
such Lender or the Administrative Agent is entitled pursuant to an applicable
tax treaty or the law of the relevant Account Party Jurisdiction or any other
jurisdiction; PROVIDED that such Account Party shall have furnished to such
Lender or the Administrative Agent in a reasonably timely manner copies of such
documentation and notice of such requirements together with applicable
instructions. Upon the reasonable request of any Account Party in writing, each
Lender and the Administrative Agent will provide to such Account Party such
form, certification or similar documentation (each duly completed, accurate and
signed) as may in the future be required by the relevant Account Party
Jurisdiction or any other jurisdiction, or comply with such other requirements,
if any, as may be applicable in such Account Party Jurisdiction or any other
jurisdiction in order to obtain an exemption from, or reduced rate of,
deduction, payment or withholding of Indemnified Taxes or Other Taxes to which
such Lender or the Administrative Agent is entitled pursuant to an applicable
tax treaty or the law of the relevant jurisdiction. In addition, each Lender
agrees from time to time when a lapse in time or change in circumstances renders
the previous documentation obsolete or inaccurate in any material respect, it
will deliver to the relevant Account Party such properly completed and executed
documentation as will permit such payments to continue to be made without
withholding or at a reduced rate, or notify such Account Party that it is unable
to do so.
(f) If the Administrative Agent or a Lender determines, in its
reasonable discretion, that it has received a refund from the relevant
Governmental Authority (in cash or as an offset against another tax liability
owing to such Governmental Authority) of any Taxes or Other Taxes attributable
to any Account Party as to which it has been indemnified by such Account Party
or with respect to which such Account Party has paid additional amounts pursuant
to this Section, it shall pay over such refund to such Account Party (but only
to the extent of indemnity payments made, or additional amounts paid, by such
Account Party under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); PROVIDED that such
Account Party, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to such Account Party (plus any penalties,
interest or other charges
- 43 -
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes not expressly
required to be made available hereunder which it reasonably deems confidential)
to any Account Party or any other Person.
SECTION 2.20. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.
(a) PAYMENTS BY THE ACCOUNT PARTIES. Each Account Party shall
make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, under Section 2.17, 2.18 or
2.19, or otherwise) or under any other Credit Document (except to the extent
otherwise provided therein) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim;
PROVIDED that any payments in respect of Alternative Currency Letters of Credit
shall be made in the manner (including the time and place of payment) as shall
have been separately agreed between the relevant Account Party and the relevant
Lender pursuant to Section 2.06. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices in New York, New York, except payments pursuant to Sections 2.17,
2.18, 2.19 and 9.03, which shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) APPLICATION OF INSUFFICIENT PAYMENTS. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c) PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (i) each reimbursement of LC Disbursements (other than in respect of
Alternative Currency Letters of Credit) shall be made to the relevant Lenders
pro rata according to the amounts of their respective Letter of Credit
Commitments (or, in the case of any such reimbursement or payment after the
termination of the Commitments, pro rata according to the aggregate LC Exposure
of the Lenders); (ii) each payment of fees under Section 2.14 shall be made for
account of the relevant Lenders, in each case, pro rata according to the amounts
of their respective Commitments; (iii) each reduction of the amount of the
Commitments of any Tranche under Section 2.11 shall be made ratably among the
Lenders of such Tranche in accordance with their respective Commitments of such
Tranche; (iv) each Borrowing shall be made from, and allocated pro rata among,
the relevant Lenders according to the amounts of their respective Revolving
Credit Commitments (in the case of the making of Loans) or their respective
Loans
- 44 -
that are to be included in such Borrowing (in the case of conversions and
continuations of Loans); (v) each payment or prepayment of principal of Loans by
any Account Party shall be made for account of the relevant Lenders pro rata
according to the respective unpaid principal amounts of the Loans of such
Account Party; and (vi) each payment of interest on Loans by an Account Party
shall be made for account of the relevant Lenders pro rata according to the
amounts of interest on such Loans then due and payable thereunder.
(d) SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or LC Disbursements
(other than with respect to Alternative Currency Letters of Credit) resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and/or LC Disbursements (other than with respect to Alternative
Currency Letters of Credit) and accrued interest thereon then due than the
proportion received by any other relevant Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and/or LC Disbursements (other than with respect to Alternative Currency
Letters of Credit) of such other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and/or LC Disbursements (other than with respect to
Alternative Currency Letters of Credit); PROVIDED that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Account Party pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or LC Disbursements
to any assignee or participant, other than to any Account Party or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Account Party consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against such
Account Party rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Account
Party in the amount of such participation.
(e) PRESUMPTIONS OF PAYMENT. Unless the Administrative Agent
shall have received notice from an Account Party prior to the date on which any
payment is due to the Administrative Agent for account of the relevant Lenders
hereunder that such Account Party will not make such payment, the Administrative
Agent may assume that such Account Party has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
relevant Lenders the amount due. In such event, if the relevant Account Party
has not in fact made such payment, then each Lender severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Federal Funds Effective Rate.
(f) CERTAIN DEDUCTIONS BY THE ADMINISTRATIVE AGENT. If any Lender
shall fail to make any payment required to be made by it pursuant to Section
2.20(e), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
- 45 -
SECTION 2.21. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) DESIGNATION OF A DIFFERENT LENDING OFFICE. If any Lender
requests compensation under Section 2.17, or if any Account Party is required to
pay any additional amount or indemnification payment to any Lender or any
Governmental Authority for account of any Lender pursuant to Section 2.19, then
such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans and/or Letters of Credit hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.17 or 2.19, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. Each Account Party hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) REPLACEMENT OF LENDERS. If any Lender requests compensation
under Section 2.17, or if any Account Party is required to pay any additional
amount to any Lender or any Governmental Authority for account of any Lender
pursuant to Section 2.19, or if any Lender defaults in its obligation to fund
Loans or to make LC Disbursements hereunder, then SCA may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee selected by SCA that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); PROVIDED that (i) SCA shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of all of its Loans and/or LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the relevant Account Party (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.17 or payments required
to be made pursuant to Section 2.19, such assignment will result in a reduction
in such compensation or payments.
If any Lender under the Letter of Credit Tranche ceases to be a
NAIC Approved Bank, then, so long as no Default shall have occurred and be
continuing, SCA may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee selected by SCA that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); PROVIDED
that (i) SCA shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of all of
its Loans and/or LC Disbursements, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the relevant
Account Party (in the case of all other amounts), (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.17 or
payments required to be made pursuant to Section 2.19, such assignment will
result in a reduction in such compensation or payments and (iv) notwithstanding
anything herein to the contrary, the processing and recordation fee under
- 46 -
Section 9.04(b)(ii)(C) shall not be payable to the Administrative Agent if such
assignee is another Lender.
A Lender shall not be required to make any assignment and
delegation pursuant to this Section if, prior thereto, as a result of a waiver
by such Lender or otherwise, the circumstances entitling SCA to require such
assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Account Party represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Such Account Party and each
of its Significant Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are
within such Account Party's corporate powers and have been duly authorized by
all necessary corporate and, if required, by all necessary shareholder action.
This Agreement has been duly executed and delivered by such Account Party and
constitutes a legal, valid and binding obligation of such Account Party,
enforceable against such Account Party in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, examination or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of (including any
exchange control approval), registration or filing with, or any other action by,
any Governmental Authority, except such as have been obtained or made and are in
full force and effect, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of such Account Party or
any of its Significant Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any material indenture,
agreement or other instrument binding upon such Account Party or any of its
Significant Subsidiaries or assets, or give rise to a right thereunder to
require any payment to be made by any such Person, and (d) will not result in
the creation or imposition of any Lien on any asset of such Account Party or any
of its Significant Subsidiaries.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) FINANCIAL CONDITION. Such Account Party has heretofore
furnished to the Lenders the consolidated balance sheet and statements of
income, stockholders' equity and cash flows of such Account Party and its
consolidated Subsidiaries (A) as of and for the fiscal year ended December 31,
2005, reported on by PricewaterhouseCoopers LLP, independent public
- 47 -
accountants, and (B) as of and for the fiscal quarter ended March 31, 2006. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of such Account Party and its
respective consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP or (in the case of XLCA or XLFA) SAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (B) of the first sentence of this paragraph.
(b) NO MATERIAL ADVERSE CHANGE. Since December 31, 2005, there
has been no material adverse change in the assets, business, financial condition
or operations of such Account Party and its Subsidiaries, taken as a whole.
SECTION 3.05. PROPERTIES.
(a) PROPERTY GENERALLY. Such Account Party and each of its
Significant Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business, subject only to Liens
permitted by Section 6.03 and except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) INTELLECTUAL PROPERTY. Such Account Party and each of its
Significant Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by such Account Party and its Subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) ACTIONS, SUITS AND PROCEEDINGS. Except as disclosed in
Schedule III or as routinely encountered in claims activity, there are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority now pending against or, to the knowledge of such Account Party,
threatened against or affecting such Account Party or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.
(b) ENVIRONMENTAL MATTERS. Except as disclosed in Schedule IV and
except with respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither
such Account Party 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 for its business under any Environmental Law, (ii) has
incurred 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 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Such Account
Party and each of its Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in
- 48 -
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. INVESTMENT COMPANY STATUS. Such Account Party is
not an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940.
SECTION 3.09. TAXES. Such Account Party and each of its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Person has set aside on its books
adequate reserves or (b) to the extent that the failure to file any such Tax
return or pay any such Taxes could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by an amount that could reasonably be
expected to result in a Material Adverse Effect.
Except as could not reasonably be expected to result in a
Material Adverse Effect, (i) all contributions required to be made by any
Account Party or any of their Subsidiaries with respect to a Non-U.S. Benefit
Plan have been timely made, (ii) each Non-U.S. Benefit Plan has been maintained
in compliance with its terms and with the requirements of any and all applicable
laws and has been maintained, where required, in good standing with the
applicable Governmental Authority and (iii) neither any Account Party nor any of
their Subsidiaries has incurred any obligation in connection with the
termination or withdrawal from any Non-U.S. Benefit Plan.
SECTION 3.11. DISCLOSURE. The reports, financial statements,
certificates or other information furnished by such Account Party to the Lenders
in connection with the negotiation of this Agreement or delivered hereunder
(taken as a whole) do not contain any material misstatement of fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED that,
with respect to projected financial information, such Account Party represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.
SECTION 3.12. USE OF CREDIT. Neither such Account Party nor any
of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock, and no
Letter of Credit will be used in connection with buying or carrying any Margin
Stock. No part of the proceeds of any Loan hereunder will be used to buy or
carry any Margin Stock (except for repurchases of the capital stock of SCA and
purchases of Margin Stock in accordance with SCA's Statement of Investment
Policy Objectives and Guidelines as in effect on the date hereof or as it may be
changed from time to time by a
- 49 -
resolution duly adopted by the board of directors of SCA (or any committee
thereof)). The purchase of any Margin Stock with the proceeds of any Loan will
not be in violation of Regulation U or X of the Board and, after applying the
proceeds of such Loan, not more than 25% of the value of the assets of SCA and
its Subsidiaries taken as a whole consists or will consist of Margin Stock.
SECTION 3.13. SUBSIDIARIES. Set forth in Schedule V is a complete
and correct list of all of the Subsidiaries of SCA as of June 30, 2006, together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Schedule V, (x) each of SCA and its
Subsidiaries owns, free and clear of Liens, and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be held by it
in Schedule V, (y) all of the issued and outstanding capital stock of each such
Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) except as disclosed in filings of SCA with the SEC prior
to the date hereof, there are no outstanding Equity Rights with respect to any
Account Party.
SECTION 3.14. WITHHOLDING TAXES. Based upon information with
respect to each Lender provided by each Lender to the Administrative Agent, as
of the date hereof, the payment of the LC Disbursements and interest thereon,
principal of and interest on the Loans, the fees under Section 2.14 and all
other amounts payable hereunder will not be subject, by withholding or
deduction, to any Indemnified Taxes imposed by Bermuda.
SECTION 3.15. STAMP TAXES. To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or any promissory
notes evidencing Loans made (or to be made), it is not necessary, as of the date
hereof, that this Agreement or such promissory notes or any other document be
filed or recorded with any Governmental Authority in Bermuda or that any stamp
or similar tax be paid on or in respect of this Agreement in any such
jurisdiction, or such promissory notes or any other document other than such
filings and recordations that have already been made and such stamp or similar
taxes that have been paid.
SECTION 3.16. LEGAL FORM. Each of this Agreement and any
promissory notes evidencing Loans made (or to be made) is in proper legal form
under the laws of any Account Party Jurisdiction for the admissibility thereof
in the courts of such Account Party Jurisdiction.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders (or
the Issuing Lender, as the case may be) to issue or continue Letters of Credit
and to make Loans hereunder are subject to the receipt by the Administrative
Agent of each of the following documents, each of which shall be satisfactory to
the Administrative Agent (and to the extent specified below, to each Lender) in
form and substance (or such condition shall have been waived in accordance with
Section 9.02):
- 50 -
(a) EXECUTED COUNTERPARTS. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page to this
Agreement) that such party has signed a counterpart of this Agreement.
(b) OPINIONS OF COUNSEL TO THE ACCOUNT PARTIES. Opinions, each
dated the Effective Date, of (i) Xxxxx Xxxxxxxxx, Esq., counsel to XLCA,
substantially in the form of Exhibit B-1, (ii) Xxxxxx Xxxxxx & Xxxxxxx
LLP, special U.S. counsel for the Account Parties, substantially in the
form of Exhibit B-2 and (iii) Xxxxxxx, Xxxx & Xxxxxxx, special Bermuda
counsel to SCA and XLFA, substantially in the form of Exhibit B-3.
(c) OPINION OF SPECIAL NEW YORK COUNSEL TO CITIBANK. An opinion,
dated the Effective Date, of Milbank, Tweed, Xxxxxx & XxXxxx LLP,
special New York counsel to Citibank, substantially in the form of
Exhibit C (and Citibank hereby instructs such counsel to deliver such
opinion to the Lenders).
(d) CORPORATE DOCUMENTS. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing, if applicable, of the
Account Parties, the authorization of the Transactions and any other
legal matters relating to the Account Parties, this Agreement or the
Transactions, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.
(e) OFFICER'S CERTIFICATE. A certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial
Officer of SCA, confirming compliance with the conditions set forth in
the lettered clauses of the first sentence of Section 4.02.
(f) SCA IPO. Evidence as to the closing of the initial public
offering of common shares of SCA pursuant to the Registration Statement.
(g) OTHER DOCUMENTS. Such other documents as the Administrative
Agent or any Lender or special New York counsel to Citibank may
reasonably request.
The obligation of any Lender to make its initial extension of
credit hereunder is also subject to the payment by SCA of such fees as SCA shall
have agreed to pay to any Lender or the Administrative Agent in connection
herewith, including the reasonable fees and expenses of Milbank, Tweed, Xxxxxx &
XxXxxx LLP, special New York counsel to Citibank, in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Credit Documents and the extensions of credit hereunder (to the extent that
reasonably detailed statements for such fees and expenses have been delivered to
SCA).
The Administrative Agent shall notify the Account Parties and the
Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders (or the Issuing
Lender, as the case may be) to issue or continue, Letters of Credit or to make
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 5:00
p.m., New York City time, on August 31, 2006 (and, in the event such conditions
are not so satisfied or waived, the Commitments shall terminate at such time).
- 51 -
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to
issue, continue, amend, renew or extend any Letter of Credit or to make any Loan
is additionally subject to the satisfaction of the following conditions:
(a) the representations and warranties of the Account Parties set
forth in this Agreement (other than, at any time after the Effective
Date, in Section 3.04(b)) shall be true and correct on and as of the
date of issuance, continuation, amendment, renewal or extension of such
Letter of Credit or the date of such Loan, as applicable (or, if any
such representation or warranty is expressly stated to have been made as
of a specific date, as of such specific date);
(b) at the time of and immediately after giving effect to the
issuance, amendment, renewal or extension of such Letter of Credit or
such Loan, as applicable, no Default shall have occurred and be
continuing; and
(c) in the case of any Alternative Currency Letter of Credit,
receipt by the Administrative Agent of a request for offers as required
by Section 2.06(a).
Each issuance, continuation, amendment, renewal or extension of a Letter of
Credit and each Borrowing shall be deemed to constitute a representation and
warranty by the Account Parties on the date thereof as to the matters specified
in clauses (a) and (b) of the immediately preceding sentence.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Account Parties covenant
and agree with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Account Parties will furnish to the Administrative Agent and each Lender:
(a) within 90 days (or in the case of XLCA and XLFA, 120 days)
after the end of each fiscal year of each Account Party, the audited
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows of such Account Party and its
consolidated Subsidiaries as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous
fiscal year (if such figures were already produced for such
corresponding period or periods) (it being understood that delivery to
the Lenders of SCA's Report on Form 10-K filed with the SEC shall
satisfy the financial statement delivery requirements of this paragraph
(a) to deliver the annual financial statements of SCA so long as the
financial information required to be contained in such Report is
substantially the same as the financial information required under this
paragraph (a)), all reported on by independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as
to the scope of such audit) to the effect that such
- 52 -
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of such
Account Party and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of such Account Party, the
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows of such Account Party and its
consolidated Subsidiaries as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for (or, in the case of the balance
sheet, as of the end of) the corresponding period or periods of the
previous fiscal year (if such figures were already produced for such
corresponding period or periods), all certified by a Financial Officer
of such Account Party as presenting fairly in all material respects the
financial condition and results of operations of such Account Party and
its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments
and the absence of footnotes (it being understood that delivery to the
Lenders of SCA's Report on Form 10-Q filed with the SEC shall satisfy
the financial statement delivery requirements of this paragraph (b) to
deliver the quarterly financial statements of SCA so long as the
financial information required to be contained in such Report is
substantially the same as the financial information required under this
paragraph (b);
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate signed on behalf of
each Account Party by a Financial Officer (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.03, 6.05, 6.06 and 6.07 and
(iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the audited financial statements referred
to in Section 3.04 and, if any such change has occurred, specifying any
material effect of such change on the financial statements accompanying
such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by such Account Party or any of its respective Subsidiaries with
the SEC, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any U.S. or other securities
exchange, or distributed by such Account Party to its shareholders
generally, as the case may be;
(f) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer
of SCA, setting forth on a consolidated basis for SCA and its
consolidated Subsidiaries as of the end of the fiscal year or quarter to
which such certificate relates (i) the aggregate book value of assets
which are subject to Liens permitted under Section 6.03(h) and the
aggregate book value of liabilities which
- 53 -
are subject to Liens permitted under Section 6.03(h) (it being
understood that the reports required by paragraphs (a) and (b) of this
Section shall satisfy the requirement of this clause (i) of this clause
(f) if such reports set forth separately, in accordance with GAAP, line
items corresponding to such aggregate book values) and (ii) a
calculation showing the portion of each of such aggregate amounts which
portion is attributable to transactions among wholly-owned Subsidiaries
of SCA; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of SCA or any of its Subsidiaries, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. Each Account Party will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default; and
(b) any event or condition constituting, or which could
reasonably be expected to have a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the relevant Account Party
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken by such Account Party with respect
thereto.
SECTION 5.03. PRESERVATION OF EXISTENCE AND FRANCHISES. Each
Account Party will, and will cause each of its Significant Subsidiaries to,
maintain its corporate existence and its material rights and franchises in full
force and effect in its jurisdiction of incorporation; PROVIDED that the
foregoing shall not prohibit any merger or consolidation permitted under Section
6.01. Each Account Party will, and will cause each of its Subsidiaries to,
qualify and remain qualified as a foreign corporation in each jurisdiction in
which failure to receive or retain such qualification would have a Material
Adverse Effect.
SECTION 5.04. INSURANCE. Each Account Party will, and will cause
each of its Significant Subsidiaries to, maintain with financially sound and
reputable insurers, insurance with respect to its properties in such amounts as
is customary in the case of corporations engaged in the same or similar
businesses having similar properties similarly situated.
- 54 -
SECTION 5.05. MAINTENANCE OF PROPERTIES. Each Account Party will,
and will cause each of its Subsidiaries to, maintain or cause to be maintained
in good repair, working order and condition the properties now or hereafter
owned, leased or otherwise possessed by and used or useful in its business and
will make or cause to be made all needful and proper repairs, renewals,
replacements and improvements thereto so that the business carried on in
connection therewith may be properly conducted at all times except if the
failure to do so would not have a Material Adverse Effect, PROVIDED, HOWEVER,
that the foregoing shall not impose on such Account Party or any Subsidiary of
such Account Party any obligation in respect of any property leased by such
Account Party or such Subsidiary in addition to such Account Party's obligations
under the applicable document creating such Account Party's or such Subsidiary's
lease or tenancy.
SECTION 5.06. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND
PRIORITY CLAIMS; PAYMENT OF OTHER CURRENT LIABILITIES. Each Account Party will,
and will cause each of its Subsidiaries to, pay or discharge:
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges or levies imposed
upon it or any of its properties or income;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons which, if unpaid, might result in the creation of a Lien upon
any such property; and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property (other than Liens not forbidden by Section 6.03) or which, if
unpaid, might give rise to a claim entitled to priority over general
creditors of such Account Party or such Subsidiary in any proceeding
under the Bermuda Companies Law or the Bermuda Insurance Law or any
other applicable insurance law, or any insolvency proceeding,
liquidation, receivership, rehabilitation, dissolution or winding-up
involving such Account Party or such Subsidiary;
PROVIDED that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, such Account Party or such Subsidiary
need not pay or discharge any such tax, assessment, charge, levy or claim (i) so
long as the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted and so long as such reserves or other
appropriate provisions as may be required by GAAP or SAP, as the case may be,
shall have been made therefor or (ii) so long as such failure to pay or
discharge would not have a Material Adverse Effect.
SECTION 5.07. FINANCIAL ACCOUNTING PRACTICES. Such Account Party
will, and will cause each of its consolidated Subsidiaries to, make and keep
books, records and accounts which, in reasonable detail, accurately and fairly
reflect its transactions and dispositions of its assets and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
transactions are recorded as necessary to permit preparation of financial
statements required under Section 5.01 in conformity with GAAP and to maintain
accountability for assets.
- 55 -
SECTION 5.08. COMPLIANCE WITH APPLICABLE LAWS. Each Account Party
will, and will cause each of its Subsidiaries to, comply with all applicable
Laws (including but not limited to the Bermuda Companies Law, Bermuda Insurance
Laws and other applicable insurance laws) in all respects; PROVIDED that such
Account Party or any Subsidiary of such Account Party will not be deemed to be
in violation of this Section as a result of any failure to comply with any such
Law which would not (i) result in fines, penalties, injunctive relief or other
civil or criminal liabilities which, in the aggregate, would have a Material
Adverse Effect or (ii) otherwise impair the ability of such Account Party to
perform its obligations under this Agreement.
SECTION 5.09. USE OF LETTERS OF CREDIT AND PROCEEDS. No part of
the proceeds of any Loan and no Letter of Credit will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X. Each Account Party will
use the Letters of Credit issued for its account hereunder in the ordinary
course of business of, and will use the proceeds of all Loans made to it for the
general corporate purposes of, such Account Party and its Subsidiaries.
SECTION 5.10. CONTINUATION OF AND CHANGE IN BUSINESSES. Each
Account Party and its Significant Subsidiaries will continue to engage in
substantially the same business or businesses it engaged in (or proposes to
engage in) on the date of this Agreement and businesses related or incidental
thereto.
SECTION 5.11. VISITATION. Each Account Party will permit such
Persons as any Lender may reasonably designate to visit and inspect any of the
properties of such Account Party, to discuss its affairs with its financial
management, and provide such other information relating to the business and
financial condition of such Account Party at such times as such Lender may
reasonably request. Each Account Party hereby authorizes its financial
management to discuss with any Lender the affairs of such Account Party.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated, the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, all Letters of Credit have expired or terminated and all LC Disbursements
have been reimbursed, each of the Account Parties covenants and agrees with the
Lenders that:
SECTION 6.01. MERGERS. No Account Party will merge with or into
or consolidate with any other Person, except that if no Default shall occur and
be continuing or shall exist at the time of such merger or consolidation or
immediately thereafter and after giving effect thereto (a) any Account Party may
merge or consolidate with any other corporation, including a Subsidiary, if such
Account Party shall be the surviving corporation, (b) SCA may merge with or into
or consolidate with any other Person in a transaction that does not result in a
reclassification, conversion, exchange or cancellation of the outstanding shares
of capital stock of SCA (other than the cancellation of any outstanding shares
of capital stock of SCA held by the Person with whom it merges or consolidates)
and (c) any Account Party may enter into a merger or consolidation which is
effected solely to change the jurisdiction of incorporation of such
- 56 -
Account Party and results in a reclassification, conversion or exchange of
outstanding shares of capital stock of such Account Party solely into shares of
capital stock of the surviving entity.
SECTION 6.02. DISPOSITIONS. No Account Party will, nor will it
permit any of its Significant Subsidiaries to, sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily (any
of the foregoing being referred to in this Section as a "DISPOSITION" and any
series of related Dispositions constituting but a single Disposition), any of
its properties or assets, tangible or intangible (including but not limited to
sale, assignment, discount or other disposition of accounts, contract rights,
chattel paper or general intangibles with or without recourse), except:
(a) Dispositions in the ordinary course of business involving
current assets or other invested assets classified on such Account
Party's or its respective Subsidiaries' balance sheet as available for
sale or as a trading account;
(b) sales, conveyances, assignments or other transfers or
dispositions in immediate exchange for cash or tangible assets, PROVIDED
that any such sales, conveyances or transfers shall not individually, or
in the aggregate for the Account Parties and their respective
Subsidiaries, exceed $200,000,000 in any calendar year;
(c) Dispositions of equipment or other property which is obsolete
or no longer used or useful in the conduct of the business of such
Account Party or its Subsidiaries; and
(d) Dispositions from an Account Party or a wholly-owned
Subsidiary to any other Account Party or wholly-owned Subsidiary.
SECTION 6.03. LIENS. No Account Party will, nor will it permit
any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on
any property or assets, tangible or intangible, now owned or hereafter acquired
by it, except:
(a) Liens existing on the date hereof (and extension, renewal and
replacement Liens upon the same property, PROVIDED that the amount
secured by each Lien constituting such an extension, renewal or
replacement Lien shall not exceed the amount secured by the Lien
theretofore existing) and listed on Part B of Schedule II;
(b) Liens arising from taxes, assessments, charges, levies or
claims described in Section 5.06 that are not yet due or that remain
payable without penalty or to the extent permitted to remain unpaid
under the provision of Section 5.06;
(c) Liens on property securing all or part of the purchase price
thereof to such Account Party and Liens (whether or not assumed)
existing on property at the time of purchase thereof by such Account
Party (and extension, renewal and replacement Liens upon the same
property); PROVIDED (i) each such Lien is confined solely to the
property so purchased, improvements thereto and proceeds thereof, and
(ii) the aggregate amount of the obligations secured by all such Liens
on any particular property at any time purchased by such Account Party,
as applicable, shall not exceed 100% of the lesser of the fair market
value of such property at such time or the actual purchase price of such
property;
- 57 -
(d) zoning restrictions, easements, minor restrictions on the use
of real property, minor irregularities in title thereto and other minor
Liens that do not in the aggregate materially detract from the value of
a property or asset to, or materially impair its use in the business of,
such Account Party or any such Subsidiary;
(e) Liens securing Indebtedness permitted by Section 6.07(b)
covering assets whose market value is not materially greater than the
amount of the Indebtedness secured thereby plus a commercially
reasonable margin;
(f) Liens on cash and securities of an Account Party or any of
its Subsidiaries incurred as part of the management of its investment
portfolio including, but not limited to, pursuant to any International
Swaps and Derivatives Association, Inc. ("ISDA") documentation or any
Specified Transaction Agreement in accordance with SCA's Statement of
Investment Policy Objectives and Guidelines as in effect on the date
hereof or as it may be changed from time to time by a resolution duly
adopted by the board of directors of SCA (or any committee thereof);
(g) Liens on cash and securities not to exceed $100,000,000 in
the aggregate securing obligations of an Account Party or any of its
Subsidiaries arising under any ISDA documentation or any other Specified
Transaction Agreement (it being understood that in no event shall this
clause (g) preclude any Person (other than any Subsidiary of SCA) in
which SCA or any of its Subsidiaries shall invest (each an "INVESTEE")
from granting Liens on such Person's assets to secure hedging
obligations of such Person, so long as such obligations are non-recourse
to SCA or any of its Subsidiaries (other than any investees)), PROVIDED
that, for purposes of determining the aggregate amount of cash and/or
securities subject to such Liens under this clause (g), the aggregate
amount of cash and/or securities on which any Account Party or any
Subsidiary shall have granted a Lien in favor of a counterparty at any
time shall be netted against the aggregate amount of cash and/or
securities on which such counterparty shall have granted a Lien in favor
of such Account Party or such Subsidiary, as the case may be, at such
time, so long as the relevant agreement between such Account Party or
such Subsidiary, as the case may be, provides for the netting of their
respective obligations thereunder;
(h) Liens on (i) assets received, and on actual or imputed
investment income on such assets received incurred as part of its
business including activities utilizing ISDA documentation or any
Specified Transaction Agreement relating and identified to specific
insurance payment liabilities or to liabilities arising in the ordinary
course of any Account Parties' or any of their Subsidiary's business as
an insurance or reinsurance company (including GICs and Stable Value
Instruments) or corporate member of The Council of Lloyd's or as a
provider of financial or investment services or contracts, or the
proceeds thereof (including GICs and Stable Value Instruments), in each
case held in a segregated trust, trust or other account and securing
such liabilities, (ii) assets securing Exempt Indebtedness of any Person
(other than SCA or any of its Affiliates) in the event such Exempt
Indebtedness is consolidated on the consolidated balance sheet of SCA
and its consolidated Subsidiaries in accordance with GAAP or (iii) any
other assets subject to any trust or other account arising out of or as
a result of contractual, regulatory or any other requirements; PROVIDED
that in no case shall any such Lien secure Indebtedness and any Lien
which secures Indebtedness shall not be permitted under this clause (h);
- 58 -
(i) statutory and common law Liens of materialmen, mechanics,
carriers, warehousemen and landlords and other similar Liens arising in
the ordinary course of business; and
(j) Liens existing on property of a Person immediately prior to
its being consolidated with or merged into any Account Party or any of
their Subsidiaries or its becoming a Subsidiary, and Liens existing on
any property acquired by any Account Party or any of their Subsidiaries
at the time such property is so acquired (whether or not the
Indebtedness secured thereby shall have been assumed) (and extension,
renewal and replacement Liens upon the same property, PROVIDED that the
amount secured by each Lien constituting such an extension, renewal or
replacement Lien shall not exceed the amount secured by the Lien
theretofore existing), PROVIDED that (i) no such Lien shall have been
created or assumed in contemplation of such consolidation or merger or
such Person's becoming a Subsidiary or such acquisition of property and
(ii) each such Lien shall extend solely to the item or items of property
so acquired and, if required by terms of the instrument originally
creating such Lien, other property which is an improvement to or is
acquired for specific use in connection with such acquired property.
SECTION 6.04. TRANSACTIONS WITH AFFILIATES. No Account Party
will, nor will it permit any of its Significant Subsidiaries to, enter into or
carry out any transaction with (including purchase or lease property or services
to, loan or advance to or enter into, suffer to remain in existence or amend any
contract, agreement or arrangement with) any Affiliate of such Account Party, or
directly or indirectly agree to do any of the foregoing, except (i) transactions
involving guarantees or co-obligors with respect to any Indebtedness described
in Part A of Schedule II, (ii) transactions among the Account Parties and their
wholly-owned Subsidiaries and (iii) transactions with Affiliates in good faith
in the ordinary course of such Account Party's business consistent with past
practice and on terms no less favorable to such Account Party or any Subsidiary
than those that could have been obtained in a comparable transaction on an arm's
length basis from an unrelated Person.
SECTION 6.05. RATIO OF TOTAL FUNDED DEBT TO TOTAL CAPITALIZATION.
SCA will not permit at any time the ratio of (a) Total Funded Debt to (b) Total
Capitalization to be greater than 0.30:1.00.
SECTION 6.06. CONSOLIDATED NET WORTH. SCA will not permit
Consolidated Net Worth to be less than (a) at any time prior to the second
anniversary of the Effective Date, the sum of (i) $617,454,000 PLUS (ii) an
amount equal to 65% of the gross proceeds from the initial public offering of
common shares of SCA and (b) at any time from and after the second anniversary
of the Effective Date, the greater of (i) the amount under clause (a) above and
(ii) an amount equal to 65% of the Consolidated Net Worth as of the end of the
then most recent fiscal year or fiscal quarter of SCA for which financial
statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b).
SECTION 6.07. INDEBTEDNESS. No Account Party will, nor will it
permit any of its Subsidiaries to, at any time create, incur, assume or permit
to exist any Indebtedness, or agree, become or remain liable (contingent or
otherwise) to do any of the foregoing, except:
(a) Indebtedness created hereunder;
- 59 -
(b) secured Indebtedness (including secured reimbursement
obligations with respect to letters of credit) of any Account Party or
any Subsidiary in an aggregate principal amount (for all Account Parties
and their respective Subsidiaries) not exceeding at any time outstanding
15% of Total Capitalization (but excluding Loans outstanding hereunder);
(c) other unsecured Indebtedness, so long as upon the incurrence
thereof no Default would occur or exist;
(d) Indebtedness consisting of accounts or claims payable and
accrued and deferred compensation (including options) incurred in the
ordinary course of business by any Account Party or any Subsidiary; and
(e) Indebtedness existing on the date hereof and described in
Part A of Schedule II and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof.
SECTION 6.08. PRIVATE ACT. No Account Party will become subject
to a Private Act.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) any Account Party shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Account Party shall fail to pay any interest on any Loan
or LC Disbursement or any fee payable under this Agreement or any other
amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of 5 or
more days;
(c) any representation or warranty made or deemed made by any
Account Party in or in connection with this Agreement or any amendment
or modification hereof, or in any certificate or financial statement
furnished pursuant to the provisions hereof, shall prove to have been
false or misleading in any material respect as of the time made (or
deemed made) or furnished;
(d) any Account Party shall fail to observe or perform any
covenant, condition or agreement contained in Article VI;
(e) any Account Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than
those specified in clause (a), (b) or (d) of this Article) and such
failure shall continue unremedied for a period of 20 or more
- 60 -
days after notice thereof from the Administrative Agent (given at the
request of any Lender) to such Account Party;
(f) any Account Party or any of its Subsidiaries shall default
(i) in any payment of principal of or interest on any other obligation
for borrowed money in principal amount of $50,000,000 or more, or any
payment of any principal amount of $50,000,000 or more under Hedging
Agreements, in each case beyond any period of grace provided with
respect thereto, or (ii) in the performance of any other agreement, term
or condition contained in any such agreement (other than Hedging
Agreements) under which any such obligation in principal amount of
$50,000,000 or more is created, if the effect of such default is to
cause or permit the holder or holders of such obligation (or trustee on
behalf of such holder or holders) to cause such obligation to become due
prior to its stated maturity or to terminate its commitment under such
agreement, PROVIDED that this clause (f) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(g) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging any Account Party a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization of such Account Party under the Bermuda Companies Law or
any other similar applicable Law, and such decree or order shall have
continued undischarged or unstayed for a period of 60 days; or a decree
or order of a court having jurisdiction in the premises for the
appointment of an examiner, receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of such Account Party or a
substantial part of its property, or for the winding up or liquidation
of its affairs, shall have been entered, and such decree or order shall
have continued undischarged and unstayed for a period of 60 days;
(h) any Account Party shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization under the Bermuda Companies Law or any
other similar applicable Law, or shall consent to the filing of any such
petition, or shall consent to the appointment of an examiner, receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of it
or a substantial part of its property, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or corporate or other action
shall be taken by such Account Party in furtherance of any of the
aforesaid purposes;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against any
Account Party or any of its Subsidiaries or any combination thereof and
the same shall not have been vacated, discharged, stayed (whether by
appeal or otherwise) or bonded pending appeal within 45 days from the
entry thereof;
(j) an ERISA Event (or similar event with respect to any Non-U.S.
Benefit Plan) shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events and such
similar events that have occurred, could reasonably be expected to
result in liability of the Account Parties and their Subsidiaries in an
aggregate amount exceeding $50,000,000; or
- 61 -
(k) a Change in Control shall occur;
then, and in every such event (other than an event with respect to any Account
Party described in clause (g) or (h) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Account
Parties, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Account
Parties accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Account Parties; and in case of any event with respect to
any Account Party described in clause (g) or (h) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Account Parties accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Account Parties.
If an Event of Default shall occur and be continuing and the
Account Parties receive notice from the Administrative Agent or the Required
Lenders demanding the deposit of cash collateral for the aggregate LC Exposure
of all the Lenders pursuant to this paragraph, the Account Parties shall
immediately deposit into an account established and maintained on the books and
records of the Administrative Agent, which account may be a "securities account"
(within the meaning of Section 8-501 of the Uniform Commercial Code as in effect
in the State of New York (the "UNIFORM COMMERCIAL CODE")), in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the total LC Exposure as of such date PLUS any accrued and unpaid interest
thereon; PROVIDED that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Account Party described in clause (g) or
(h) of this Article. Such deposit shall be held by the Administrative Agent as
collateral for the LC Exposure under this Agreement, and for this purpose each
of the Account Parties hereby grant a security interest to the Administrative
Agent for the benefit of the Lenders in such collateral account and in any
financial assets (as defined in the Uniform Commercial Code) or other property
held therein.
In addition to the provisions of this Article, each Account Party
agrees that upon the occurrence and during the continuance of any Event of
Default any Lender which has issued any Alternative Currency Letter of Credit
may, by notice to any Account Party and the Administrative Agent: (a) declare
that all fees and other obligations of such Account Party accrued in respect of
Alternative Currency Letters of Credit issued by such Lender shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by such Account Party and (b) demand
the deposit (without duplication of any amounts deposited with the
Administrative Agent under the preceding paragraph) of cash collateral from such
Account Party in immediately available funds in the currency of each such
Alternative Currency Letter of Credit or, at the option of such Lender, in
Dollars in an amount equal to the then aggregate undrawn face amount of all such
Alternative Currency Letters of Credit and in such manner as previously agreed
to by the relevant Account
- 62 -
Party and such Lender; PROVIDED that, in the case of any of the Events of
Default specified in clause (g) or (h) of this Article, without any notice to
any Account Party or any other act by the Administrative Agent or the Lenders,
all fees and other obligations of the Account Parties accrued in respect of all
Alternative Currency Letters of Credit shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Account Party. If the Administrative Agent receives
any notice from a Lender pursuant to the previous sentence, then it will
promptly give notice thereof to the other Lenders.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender hereby
appoints and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the promissory notes), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of promissory notes; PROVIDED, HOWEVER, that the Administrative
Agent shall not be required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this Agreement or applicable
law. The Administrative Agent agrees to give to each Lender prompt notice of
each notice given to it by any Account Party pursuant to the terms of this
Agreement.
SECTION 8.02. AGENT'S RELIANCE, ETC. Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable to
the Lenders for any action taken or omitted to be taken by it or them under or
in connection with this Agreement, except for its or their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing,
the Administrative Agent: (i) may treat the payee of any promissory note as the
holder thereof until the Administrative Agent receives and accepts an Assignment
and Assumption entered into by the Lender which is the payee of such promissory
note, as assignor, and a NAIC Approved Bank, as assignee, as provided in Section
9.04; (ii) may consult with legal counsel (including counsel for an Account
Party), independent public accountants and other experts selected by it and
shall not be liable to the Lenders for any action taken or omitted to be taken
in good faith by it in accordance with the advice of such counsel, accountants
or experts; (iii) makes no warranty or representation to any Lender and shall
not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of any Account Party; or to inspect the property
(including the books and records) of any Account Party; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability to the Lenders under or in respect of this Agreement by acting upon
any notice, consent, certificate or other
- 63 -
instrument or writing (which may be by telecopier, telegram, cable, telex or
email) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 8.03. CITIBANK AND AFFILIATES. With respect to its
Commitment, the Loans made by it, and any Letters of Credit issued by it as
Issuing Lender and the promissory notes issued to it, Citibank shall have the
same rights and powers under this Agreement as any other Lender and/or Issuing
Lender and may exercise the same as though it were not the Administrative Agent;
and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Citibank in its individual capacity. Citibank and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with any Account Party and any Person
who may do business with or own securities of any Account Party, all as if
Citibank were not the Administrative Agent and without any duty to account
therefor to the Lenders or Issuing Lenders.
SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on the financial statements referred to in Section
3.04 and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
and each Issuing Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 8.05. INDEMNIFICATION. The Lenders severally agree to
indemnify the Administrative Agent (to the extent not reimbursed by the Account
Parties) and all Related Parties ratably according to their respective
Applicable Percentages from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the
Administrative Agent under this Agreement, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse the Administrative Agent
promptly upon demand for its ratable share of any out of pocket expenses
(including counsel fees) incurred by the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Administrative Agent is not reimbursed for such expenses
by the Account Parties.
SECTION 8.06. SUCCESSOR AGENT. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Account Parties and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent that, unless an
Event of Default shall have occurred and then be continuing, is reasonably
acceptable to SCA. If no successor Administrative Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the
- 64 -
Lenders, appoint a successor Administrative Agent, which shall, unless an Event
of Default shall have occurred and then be continuing, be reasonably acceptable
to SCA, and shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having total assets of at least
$1,000,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
SECTION 8.07. ARRANGERS, ETC. None of the Persons identified on
the cover page hereof as Joint Lead Arrangers and Bookrunners, Syndication Agent
or Documentation Agents shall, in their roles as such, have any responsibilities
or liabilities under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES
(a) Subject to clauses (b) through (e) below, all notices and
other communications provided for hereunder shall be in writing (including
telecopier) and mailed, telecopied, emailed or delivered by hand:
(i) if to any Account Party, to SCA at XX Xxxxx, Xxx Xxxxxxxxxx
Xxxx, Xxxxxxxx XX 00 Xxxxxxx, Xxxxxxxxx of Xxxxxxx Xxxx (Telecopy No.
(000) 000-0000), WITH A COPY to the Secretary of SCA at the same address
and telecopy number (000) 000-0000;
(ii) if to the Administrative Agent to Citibank, N.A., 0 Xxxxx
Xxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxx
(Telecopier No.: 000-000-0000) (Telephone No.: 000-000-0000); and
(iii) if to a Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire;
or, as to the Account Parties or the Administrative Agent, at such other address
as shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by
such party in a written notice to the Account Parties and the Administrative
Agent. All such notices and communications shall be deemed to have been duly
given or made (i) in the case of hand deliveries, when delivered by hand, (ii)
in the case of mailed notices, three Business Days after being deposited in the
mail, postage prepaid, and (iii) in the case of telecopier or email notice, when
transmitted and confirmed during normal business hours (or, if delivered after
the close of normal business hours, at the beginning of business hours on the
next Business Day), except that notices and communications to the Administrative
Agent pursuant to Article II or VIII shall not be effective until received by
the Administrative Agent.
- 65 -
(b) The Account Parties hereby agree that they will provide to
the Administrative Agent all information, documents and other materials that it
is obligated to furnish to the Administrative Agent pursuant to this Agreement,
including, without limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information materials, but
excluding any such communication that (i) relates to the payment of any
principal or other amount due under this Agreement prior to the scheduled date
therefor, (ii) provides notice of any Default under this Agreement or (iii) is
required to be delivered to satisfy any condition precedent to the occurrence of
the Effective Date and/or any Borrowing or other extension of credit hereunder
(all such non-excluded communications being referred to herein collectively as
"COMMUNICATIONS"), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx. In addition, the Account Parties agree to
continue to provide the Communications to the Administrative Agent in the manner
specified in this Agreement but only to the extent requested by the
Administrative Agent.
(c) The Account Parties further agree that the Administrative
Agent may make the Communications available to the Lenders by posting the
Communications on Intralinks or a substantially similar electronic transmission
system (the "PLATFORM"). THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE".
THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS
OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES (COLLECTIVELY, THE "AGENT
PARTIES") HAVE ANY LIABILITY TO ANY ACCOUNT PARTY, ANY LENDER OR ANY OTHER
PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT
OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES
(WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF SUCH ACCOUNT PARTY'S OR
THE ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET,
EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(d) The Administrative Agent agrees that the receipt of the
Communications by the Administrative Agent at its e-mail address set forth above
shall constitute effective delivery of the Communications to the Administrative
Agent for purposes of this Agreement. Each Lender and Issuing Lender agrees that
notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective
delivery of the Communications to such Lender for purposes of this Agreement.
Each Lender and Issuing Lender agrees (i) to provide to the Administrative Agent
in writing (including by electronic communication), promptly after the date of
this Agreement, an e-mail address to which the
- 66 -
foregoing notice may be sent by electronic transmission and (ii) that the
foregoing notice may be sent to such e-mail address.
(e) Nothing herein shall prejudice the right of the
Administrative Agent or any Lender to give any notice or other communication
pursuant to this Agreement in any other manner specified in this Agreement.
SECTION 9.02. WAIVERS; AMENDMENTS.
(a) NO DEEMED WAIVERS; REMEDIES CUMULATIVE. No failure or delay
by the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Account
Parties therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) AMENDMENTS. Neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to an agreement or agreements
in writing entered into by the Account Parties and the Required Lenders or by
the Account Parties and the Administrative Agent with the consent of the
Required Lenders; PROVIDED that no such agreement shall:
(i) increase the Commitment of any Lender without the written
consent of such Lender,
(ii) reduce the principal amount of any Loan or the amount of any
reimbursement obligation of an Account Party in respect of any LC
Disbursement or reduce the rate of interest thereon, or reduce any fees
or other amounts payable hereunder, without the written consent of each
Lender directly affected thereby,
(iii) postpone the scheduled date of payment of the principal
amount of any Loan or for reimbursement of any LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment or any Letter of Credit (other than an
extension thereof pursuant to an "evergreen" provision" to the extent
permitted herein), without the written consent of each Lender directly
affected thereby,
(iv) change Section 2.20(c) or 2.20(d) without the consent of
each Lender directly affected thereby, and
(v) change any of the provisions of this Section or the
percentage in the definition of the term "Required Lenders" or any other
provision hereof specifying the number or
- 67 -
percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;
and PROVIDED FURTHER that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder without the
prior written consent of the Administrative Agent.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. SCA agrees to pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including the fees, charges and disbursements of one legal
counsel for the Administrative Agent and one legal counsel for the Lenders, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including in connection
with any workout, restructuring or negotiations in respect thereof.
(b) INDEMNIFICATION BY THE ACCOUNT PARTIES. SCA shall indemnify
the Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "INDEMNITEE") against, and
to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee (but not including Excluded Taxes), incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or the use of the proceeds
thereof or any Letter of Credit or the use thereof (including any refusal by any
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Account
Party or any of its Subsidiaries, or any Environmental Liability related in any
way to any Account Party or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses result from or arise
out of the gross negligence or willful misconduct of such Indemnitee.
(c) REIMBURSEMENT BY LENDERS. To the extent that the Account
Parties fail to pay any amount required to be paid by them to the Administrative
Agent under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; PROVIDED that the unreimbursed expense
or
- 68 -
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent in its capacity
as such.
(d) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent permitted
by applicable law, no Account Party shall assert, and each Account Party hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
(e) PAYMENTS. All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS.
(a) ASSIGNMENTS GENERALLY. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) no Account
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by an Account Party without such consent shall be null
and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) ASSIGNMENTS BY LENDERS. (i) Subject to the conditions set
forth in paragraph (b)(ii) of this Section, any Lender may assign all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans and/or LC Disbursements at the time
owing to it) and any Letters of Credit issued by such Lender (x) in the case of
any assignment by an Lender under the Letter of Credit Tranche, to one or more
NAIC Approved Banks or (y) in the case of any assignment by a Lender under the
Revolving Credit Tranche, to one or more Persons, in each case with the prior
written consent (such consent not to be unreasonably withheld) of:
(A) the Account Parties, PROVIDED that no consent of any
Account Party shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default under
clause (a), (b), (g) or (h) of Article VIII has occurred and is
continuing, any other assignee; and
(B) the Administrative Agent; and
(C) the Issuing Lender with respect to Participated
Letters of Credit.
(ii) Assignments shall be subject to the following additional
conditions:
- 69 -
(A) except in the case of an assignment to a Lender, an
Approved Fund or an Affiliate of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Administrative Agent) shall not be
less than $5,000,000 and in multiples of $1,000,000 in excess thereof
unless each of the Account Parties and the Administrative Agent
otherwise consent, PROVIDED that no such consent of the Account Parties
shall be required if an Event of Default under clause (a), (b), (g) or
(h) of Article VIII has occurred and is continuing;
(B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement;
(C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500; and
(D) the assignee, if it shall not be a Lender, shall
deliver an Administrative Questionnaire to the Administrative Agent
(with a copy to SCA).
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(v) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender's rights and obligations under this Agreement and each Letter
of Credit, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.17, 2.18, 2.19 and 9.03). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.
(iv) Notwithstanding anything to the contrary contained herein,
any Lender (a "GRANTING LENDER") may grant to a special purpose vehicle (an
"SPV") of such Granting Lender, identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Account Parties, the
option to provide to the Account Parties all or any part of any Loan or LC
Disbursement that such Granting Lender would otherwise be obligated to make to
the Account Parties pursuant to Section 2.01, PROVIDED that (i) nothing herein
shall constitute a commitment by any SPV to make any Loan or LC Disbursement,
(ii) if an SPV elects not to exercise such option or otherwise fails to provide
all or any part of such Loan or LC Disbursement, the Granting Lender shall be
obligated to make such Loan or LC Disbursement pursuant to the terms hereof and
(iii) the Account Parties may bring any proceeding against either or both the
Granting Lender or the SPV in order to enforce any rights of the Account Parties
hereunder. The making of a Loan or LC Disbursement by an SPV hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan or LC Disbursement were made by the Granting Lender. Each party hereto
hereby agrees that no SPV
- 70 -
shall be liable for any payment under this Agreement for which a Lender would
otherwise be liable, for so long as, and to the extent, the related Granting
Lender makes such payment. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPV, it
will not institute against, or join any other person in instituting against,
such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceedings under the laws of the United States or any
State thereof arising out of any claim against such SPV under this Agreement. In
addition, notwithstanding anything to the contrary contained in this Section,
any SPV may with notice to, but without the prior written consent of, the
Account Parties or the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loan or Letter of
Credit to its Granting Lender or to any financial institutions (consented to by
the Account Parties and the Administrative Agent) providing liquidity and/or
credit support (if any) with respect to commercial paper issued by such SPV to
fund such Loans and to issue such Letters of Credit and such SPV may disclose,
on a confidential basis, confidential information with respect to any Account
Party and its Subsidiaries to any rating agency, commercial paper dealer or
provider of a surety, guarantee or credit liquidity enhancement to such SPV.
Notwithstanding anything to the contrary in this Agreement, no SPV shall be
entitled to any greater rights under Section 2.17 or Section 2.19 than its
Granting Lender would have been entitled to absent the use of such SPV. This
paragraph may not be amended without the consent of any SPV at the time holding
Loans or LC Disbursements under this Agreement.
(v) The Administrative Agent, acting for this purpose as an agent
of the Account Parties, shall maintain at one of its offices in New York City a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, the Commitment of, and
principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, and the Account Parties, the Administrative
Agent and the Lenders 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 any Account Party and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(vi) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b)(ii)(C) of this Section and any written consent to such assignment required
by paragraph (b)(i) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(c) PARTICIPATIONS. (i) Any Lender may, without the consent of
the Account Parties, the Administrative Agent or any Issuing Lender, sell
participations to one or more banks or other entities (a "PARTICIPANT") in all
or a portion of such Lender's rights and obligations under this Agreement and
the other Credit Documents (including all or a portion of its Commitment, the
Loans and LC Disbursements owing to it); PROVIDED that (A) any such
participation sold to a
- 71 -
Participant which is not a Lender, an Approved Fund or a Federal Reserve Bank
shall be made only with the consent (which in each case shall not be
unreasonably withheld) of SCA and the Administrative Agent, unless a Default has
occurred and is continuing, in which case the consent of SCA shall not be
required, (B) such Lender's obligations under this Agreement and the other
Credit Documents shall remain unchanged, (C) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (D) the Account Parties, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Credit
Documents. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and the other Credit Documents and to approve any
amendment, modification or waiver of any provision of this Agreement or the
other Credit Documents; PROVIDED that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Account Parties agree that each Participant shall be entitled to
the benefits of Section 2.17, 2.18 and 2.19 (subject to the requirements 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. 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, provided such Participant agrees to be
subject to Section 2.20(d) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Sections 2.17, 2.18 or 2.19 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant or the Lender interest assigned, unless (A) the sale of the
participation to such Participant is made with the Account Parties' prior
written consent and (B) in the case of Section 2.17 or 2.19, the entitlement to
greater payment results solely from a Change in Law formally announced after
such Participant became a Participant.
(iii) In the event that any Lender sells participations in a Loan
or Commitment, such Lender, acting solely for this purpose as a non-fiduciary
agent of the Borrower, shall maintain a register on which it enters the name of
all participants in the Loans and Commitments held by it (the "PARTICIPANT
REGISTER"). The entries in the Participant Register shall be conclusive in the
absence of manifest error, and the participating Lender shall treat each Person
whose name is recorded in the Participant Register as the Participant for all
purposes of this Agreement and the other Credit Documents, notwithstanding any
notice to the contrary.
(d) CERTAIN PLEDGES. Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to
secure obligations to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; PROVIDED that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(e) NO ASSIGNMENTS TO ACCOUNT PARTIES OR AFFILIATES. Anything in
this Section to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan or LC Exposure held by it hereunder to any
Account Party or any of its Affiliates or Subsidiaries without the prior consent
of each Lender.
- 72 -
SECTION 9.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Account Parties herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and the issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of, or any accrued interest on, any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.17, 2.18, 2.19 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the expiration
or termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract between and among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page to this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Account Party against any of and all the
obligations of such Account Party now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
- 73 -
SECTION 9.09. GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
(b) SUBMISSION TO JURISDICTION. Each Account Party hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Account Party or its
properties in the courts of any jurisdiction.
(c) WAIVER OF VENUE. Each Account Party hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) SERVICE OF PROCESS. By the execution and delivery of this
Agreement, SCA and XLFA acknowledge that they have by a separate written
instrument, designated and appointed CT Corporation System, 000 Xxxxxx Xxxxxx,
00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or any successor entity thereto), as its
authorized agent upon which process may be served in any suit or proceeding
arising out of or relating to this Agreement that may be instituted in any
federal or state court in the State of New York. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
(e) WAIVER OF IMMUNITIES. To the extent that any Account Party
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution or execution, on the ground of
sovereignty or otherwise) with respect to itself or its property, it hereby
irrevocably waives, to the fullest extent permitted by applicable law, such
immunity in respect of its obligations under this Agreement.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT
- 74 -
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
(a) TREATMENT OF CERTAIN INFORMATION. Each of the Account Parties
acknowledge that from time to time financial advisory, investment banking and
other services may be offered or provided to any Account Party or one or more of
their Subsidiaries (in connection with this Agreement or otherwise) by any
Lender or by one or more subsidiaries or affiliates of such Lender and each of
the Account Parties hereby authorizes each Lender to share any information
delivered to such Lender by such Account Party and its Subsidiaries pursuant to
this Agreement, or in connection with the decision of such Lender to enter into
this Agreement, to any such subsidiary or affiliate, it being understood that
(i) any such information shall be used only for the purpose of advising the
Account Parties or preparing presentation materials for the benefit of the
Account Parties and (ii) any such subsidiary or affiliate receiving such
information shall be bound by the provisions of paragraph (b) of this Section as
if it were a Lender hereunder. Such authorization shall survive the repayment of
the Loans, the expiration or termination of the Letters of Credit, the
expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof.
(b) CONFIDENTIALITY. Each of the Administrative Agent, the
Lenders and each SPV agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (i) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority (including self-regulating
organizations) having jurisdiction over the Administrative Agent or any Lender
(or any Affiliate thereof), (iii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iv) to any other party
to this Agreement, (v) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (vi) subject to an agreement in writing containing
provisions substantially the same as those of this paragraph and for the benefit
of the Account Parties, to (a) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (b) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to any Account Party
and its obligations, (vii) with the consent of the Account Parties or (viii) to
the extent such Information (A) becomes publicly available other than as a
result of a breach of this paragraph or (B) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than an Account Party. For
- 75 -
the purposes of this paragraph, "INFORMATION" means all information received
from an Account Party relating to an Account Party or its business, other than
any such information that is available to the Administrative Agent or any Lender
on a nonconfidential basis prior to disclosure by such Account Party; PROVIDED
that, in the case of information received from an Account Party after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding the foregoing, each of the
Administrative Agent and the Lenders agree that they will not trade the
securities of any of the Account Parties based upon non-public Information that
is received by them.
SECTION 9.13. JUDGMENT CURRENCY. This is an international loan
transaction in which the obligations of each Account Party under this Agreement
to make payment hereunder shall be satisfied only in Dollars and only if such
payment shall be made in New York City, and the obligations of each Account
Party under this Agreement to make payment to (or for account of) a Lender in
Dollars shall not be discharged or satisfied by any tender or recovery pursuant
to any judgment expressed in or converted into any other currency or in another
place except to the extent that such tender or recovery results in the effective
receipt by such Lender in New York City of the full amount of Dollars payable to
such Lender under this Agreement. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due hereunder in Dollars into another
currency (in this Section called the "JUDGMENT CURRENCY"), the rate of exchange
that shall be applied shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase such Dollars at the principal
office of the Administrative Agent in New York City with the judgment currency
on the Business Day next preceding the day on which such judgment is rendered.
The obligation of each Account Party in respect of any such sum due from it to
the Administrative Agent or any Lender hereunder (in this Section called an
"ENTITLED PERSON") shall, notwithstanding the rate of exchange actually applied
in rendering such judgment, be discharged only to the extent that on the
Business Day following receipt by such Entitled Person of any sum adjudged to be
due hereunder in the judgment currency such Entitled Person may in accordance
with normal banking procedures purchase and transfer Dollars to New York City
with the amount of the judgment currency so adjudged to be due; and each Account
Party hereby, as a separate obligation and notwithstanding any such judgment,
agrees to indemnify such Entitled Person against, and to pay such Entitled
Person on demand, in Dollars, the amount (if any) by which the sum originally
due to such Entitled Person in Dollars hereunder exceeds the amount of the
Dollars so purchased and transferred.
SECTION 9.14. USA PATRIOT ACT. Each Lender hereby notifies the
Account Parties that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)), such Lender is
required to obtain, verify and record information that identifies the Account
Parties, which information includes the name and address of the Account Parties
and other information that will allow such Lender to identify each Account Party
in accordance with said Act.
- 76 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
SECURITY CAPITAL ASSURANCE LTD
By_________________________
Name:
Title:
U.S. FEDERAL TAX IDENTIFICATION NO.:
None
XL CAPITAL ASSURANCE INC.
By_________________________
Name:
Title:
U.S. FEDERAL TAX IDENTIFICATION NO.:
00-0000000
XL FINANCIAL ASSURANCE LTD.
By_________________________
Name:
Title:
U.S. FEDERAL TAX IDENTIFICATION NO.:
- 77 -
LENDERS
CITIBANK, N.A.,
individually and as Administrative Agent
By_________________________
Name:
Title:
- 78 -
JPMORGAN CHASE BANK, N.A.
By_________________________
Name:
Title:
- 79 -
DEUTSCHE BANK AG NEW YORK BRANCH
By_________________________
Name:
Title:
By_________________________
Name:
Title:
- 80 -
XXXXXXX XXXXX CREDIT PARTNERS, L.P.
By_________________________
Name:
Title:
- 81 -
HSBC BANK USA, N.A.
By_________________________
Name:
Title:
- 82 -
XXXXXXX XXXXX BANK USA
By_________________________
Name:
Title:
- 83 -
WACHOVIA BANK, NATIONAL ASSOCIATION
By_________________________
Name:
Title:
- 84 -
ABN AMRO BANK N.V.
By_________________________
Name:
Title:
- 85 -
BANK OF AMERICA, N.A.
By_________________________
Name:
Title:
- 86 -
THE BANK OF NEW YORK
By_________________________
Name:
Title:
- 87 -
CALYON NEW YORK BRANCH
By_________________________
Name:
Title:
- 88 -
XXXXXX BROTHERS BANK, FSB
By_________________________
Name:
Title:
- 89 -
UBS AG, STAMFORD BRANCH
By_________________________
Name:
Title:
EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "ASSIGNMENT AND ASSUMPTION")
is dated as of the Effective Date set forth below and is entered into by and
between [INSERT NAME OF ASSIGNOR] (the "ASSIGNOR") and [INSERT NAME OF ASSIGNEE]
(the "ASSIGNEE"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"CREDIT AGREEMENT"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below (i) all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit, guarantees, and
swingline loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the "ASSIGNED INTEREST"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund of [IDENTIFY
LENDER](1) [and is a NAIC Approved Bank](1) ]
3. Account Parties: Security Capital Assurance Ltd, XL Capital
Assurance Inc. and XL Financial Assurance Ltd.
----------
(1) Select as applicable.
(2) Insert to the extent required by Section 9.04(b) of the Credit Agreement.
- 2 -
4. Administrative Agent: Citibank, N.A., as the administrative agent under
the Credit Agreement
5. Credit Agreement: Credit Agreement dated as of August [__], 2006
(as amended and in effect from time to time, the
"CREDIT AGREEMENT"), between Security Capital
Assurance Ltd, XL Capital Assurance Inc. and XL
Financial Assurance Ltd., the Lenders named therein
and Citibank, N.A., as Administrative Agent
- 3 -
6. Assigned Interest:
---------------------------- ------------------------- ------------------------
Aggregate Amount of Amount of Percentage Assigned
Commitment/Loans for all Commitment/Loans of
Lenders Assigned Commitment/Loans(2)
---------------------------- ------------------------- ------------------------
$ $ %
---------------------------- ------------------------- ------------------------
$ $ %
---------------------------- ------------------------- ------------------------
$ $ %
---------------------------- ------------------------- ------------------------
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:______________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:______________________________
Title:
----------
(3) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
- 4 -
Consented to and Accepted:
CITIBANK, N.A.,
as Administrative Agent
By_________________________________
Title:
[Consented to:](3)
SECURITY CAPITAL ASSURANCE LTD
By:_________________________
Name:
Title:
XL CAPITAL ASSURANCE INC.
By_________________________
Name:
Title:
XL FINANCIAL ASSURANCE LTD.
By_________________________
Name:
Title:
----------
(4) To be added only if the consent of the Account Parties is required by the
terms of the Credit Agreement.
ANNEX 1
CREDIT AGREEMENT DATED AS OF AUGUST [__], 2006, BETWEEN SECURITY
CAPITAL ASSURANCE LTD, CERTAIN OF ITS SUBSIDIARIES, THE LENDERS NAMED
THEREIN AND CITIBANK, N.A., AS ADMINISTRATIVE AGENT
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. REPRESENTATIONS AND WARRANTIES.
1.1 ASSIGNOR. The Assignor (a) represents and warrants that (i)
it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Credit Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Documents or any collateral thereunder, (iii) the financial condition of
any Account Party, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Credit Document or (iv) the performance or
observance by any Account Party, any of its Subsidiaries or Affiliates or any
other Person of any of their respective obligations under any Credit Document.
1.2. ASSIGNEE. The Assignee (a) represents and warrants that (i)
it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder, and
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 5.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender; and (b) agrees that (i) it
will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender.
- 2 -
2. PAYMENTS. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective Date and
to the Assignee for amounts which have accrued from and after the Effective
Date.
3. GENERAL PROVISIONS. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
- 3 -
EXHIBIT B-1
[Form of Opinion of Counsel to XLCA]
August [__], 2006
To the Lenders party to the Credit Agreement
referred to below and
Citibank, N.A.
as Administrative Agent,
0 Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000
X.X.X.
Dear Sirs,
I am Counsel of XL Capital Assurance Inc. ("XLCA"). I am
furnishing this opinion to you pursuant to Section 4.01(b)(i) of the Credit
Agreement dated as of August [__], 2006, between Security Capital Assurance Ltd
("SCA"), XLCA, and XL Financial Assurance Ltd. ("XLFA") (collectively, the "XL
Entities"), as account parties (collectively, the "Account Parties"), the
Lenders parties thereto and Citibank, N.A., as Administrative Agent (the
"Agreement"). Unless otherwise defined herein, capitalized terms used herein
have the meanings assigned to those terms in the Agreement.
In this connection, I have examined the Agreement.
For purposes of this opinion I have been informed that you are
receiving an opinion of an opinion of Xxxxxx Xxxxxx & Xxxxxxx LLP, special New
York counsel for the Account Parties, as to, among other things, the Account
Parties each having all the requisite power and authority and having taken all
necessary corporate or other action to execute and deliver (and having duly
authorized, executed and delivered) the Agreement. I have not independently
verified any of the matters contained in such opinions or made any
investigations in connection with any such matters.
I have examined and relied upon the representations, warranties
and covenants contained in the Agreement, certificates of public officials and
of other officers of each of the Account Parties and such other documents and
records as I deemed relevant and necessary as a basis for the opinions
hereinafter expressed.
In rendering the opinions set forth below, I have assumed that
the signatures on documents and instruments examined by me as originals are
authentic and
- 2 -
that all documents submitted to me as copies conform with the originals, which
facts I have not independently verified.
Based upon the foregoing, and subject to the assumptions,
exceptions and qualifications set forth herein, I am of the opinion that:
1. XLCA is duly incorporated under the laws of the State of New
York.
2. To my knowledge after due inquiry, except as routinely
encountered in claims activity, there is no litigation or governmental
proceeding by or against XLCA or any Subsidiary of XLCA pending or threatened
which could reasonably be expected (in light of reserves and total shareholder
equity of XLCA and after taking into account XLCA's business and activities) to
have a Material Adverse Effect if adversely determined.
3. Neither the execution and delivery of the Agreement nor any
other documents or instruments executed or delivered in connection with the
Agreement, the consummation of the transactions therein contemplated nor
compliance with the terms and provisions thereof will conflict with or result in
a breach of any of the terms, conditions or provisions of the articles of
incorporation or by-laws of XLCA or of any applicable law or of any material
agreement or instrument of which I have knowledge after due inquiry to which
XLCA is a party or by which it is bound or to which it is subject, or constitute
a default thereunder or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the property of XLCA pursuant to the terms of any
such agreement or instrument.
4. To my knowledge, XLCA is not in violation of any charter
document, corporate minute or resolution or any instrument or agreement of which
I have knowledge after due inquiry, in each case binding on it or affecting its
property in any manner which could have a Material Adverse Effect.
5. To my knowledge after due inquiry, XLCA is qualified to do
business in those jurisdictions in which its ownership of property or the nature
of its business activities is such that failure to be so qualified would have a
Material Adverse Effect.
In rendering this opinion, I express no opinions as to the laws
of any jurisdictions other than the laws of the State of New York and the
Federal laws of the United States of America.
- 3 -
Neither this opinion nor any part hereof may be delivered to or
used or relied upon by any person other than you and the Lenders without my
prior written consent.
Very truly yours,
Xxxxx Xxxxxxxxx
EXHIBIT B-2
[Form of Opinion of Special U.S. Counsel to the Account Parties]
August [__], 2006
Re: Credit Agreement (the "Agreement") dated as of August
[__], 2006, between Security Capital Assurance Ltd,
XL Capital Assurance Inc. ("XLCA") and XL Financial
Assurance Ltd., as Account Parties (collectively, the
"Loan Parties"), the Lenders party thereto and
Citibank, N.A., as Administrative Agent.
The Lenders party to the Agreement
and Citibank, N.A.,
as Administrative Agent
0 Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000
XXX
Ladies and Gentlemen:
We have acted as special New York counsel to the Loan Parties in
connection with the Agreement. This opinion is furnished to you at the request
of the Loan Parties pursuant to section 4.01(b)(ii) of the Agreement. Unless
otherwise defined herein, capitalized terms used herein have the meanings
assigned to those terms in the Agreement.
In this connection, we have examined the Agreement to be executed
as of the date hereof.
We have examined and relied upon the representations, warranties
and covenants contained in the Agreement, certificates of public officials and
of officers of the Loan Parties and such other documents and records as we
deemed relevant and necessary as a basis for the opinions hereinafter expressed.
In rendering the opinions set forth below, we have assumed that
the signatures on documents and instruments examined by us as originals are
authentic and that all documents submitted to us as copies conform with the
originals, which facts we have not independently verified.
- 2 -
For purposes of this opinion, we have assumed that you have all
requisite power and authority and have taken all necessary corporate or other
action to execute and deliver (and have duly authorized, executed and delivered)
the Agreement.
No opinion is expressed herein with respect to (i) the
enforceability of the set-off provisions of the Agreement, (ii) the
enforceability of any waiver by any Loan Party of demand, (iii) the effect of
the laws of any jurisdiction other than New York that limit rates of interest
that may be charged or collected by the Lenders and (iv) the enforceability of
any provision in the Agreement purporting to establish evidentiary standards.
We express no opinion as to (i) whether a court would give effect
to the choice of law provided for in the Agreement (ii) Section 9.09 of the
Agreement, insofar as such Section relates to the subject matter jurisdiction of
any court to adjudicate any controversy related to the Agreement and (iii) the
waiver of trial by jury set forth in Section 9.10 of the Agreement.
Based upon the foregoing, and subject to the assumptions,
exceptions and qualifications set forth herein, we are of the opinion that:
1. XLCA is validly existing as a corporation in good standing
under the laws of the State of New York. XLCA has the corporate power and
authority to execute and deliver the Agreement and to perform its obligations
thereunder.
2. No authorization, consent, approval, license, exemption or
other action by, and no registration, qualification, designation, declaration or
filing with, any Governmental Authority is required in connection with (i) the
execution and delivery by the Loan Parties of the Agreement, (ii) the
consummation by the Loan Parties of the transactions contemplated by the
Agreement or (iii) the performance by the Loan Parties of or compliance by the
Loan Parties with the terms and conditions of the Agreement.
3. The Agreement has been duly and validly authorized by XLCA.
The Agreement has been duly executed and delivered by the Loan Parties, and
constitutes the legal, valid and binding obligation of the Loan Parties,
enforceable in accordance with the terms thereof.
4. None of the Loan Parties is an Investment Company as defined
in the Investment Company Act of 1940.
5. The execution and delivery by each Loan Party of, and the
performance and incurrence by each Loan Party of its obligations and liabilities
under, the Agreement does not and will not violate any applicable law presently
existing or any published rule
- 3 -
or regulation of the United States of America (including, without limitation,
Regulations U or X of the Board) or the State of New York.
The enforceability of the Agreement is subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer and
similar laws affecting the enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or equity), including the principles of
commercial reasonableness or conscienability.
In rendering this opinion we express no opinions as to the laws
of any jurisdictions other than the laws of the State of New York and the
federal laws of the United States of America.
Neither this opinion nor any part hereof may be delivered to or
used or relied upon by any person other than you and each of your successors and
permitted assigns without our written consent.
Very truly yours,
EXHIBIT B-3
[Form of Opinion of Special Bermuda Counsel to SCA and XLFA]
August [__], 2006
The Lenders party to the Agreement
Referred to below and 000-000-0000
Citibank, N.A.,
as administrative agent for such Lenders
0 Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000
XXX
Dear Sirs
Security Capital Assurance Ltd and XL Financial Assurance Ltd. (the "Companies")
We have acted as special legal counsel in Bermuda to the Companies in connection
with a five-year credit agreement.
For the purposes of giving this opinion, we have examined an executed copy of a
Credit Agreement dated as of August [__], 2006, by and between Security Capital
Assurance Ltd, XL Capital Assurance Inc., XL Financial Assurance Ltd., Lenders
parties thereto and Citibank, N.A., as Administrative Agent (the "Credit
Agreement" which term does not include any other instrument or agreement whether
or not specifically referred to therein or attached as an exhibit or schedule
thereto).
We have also reviewed the memorandum of association and the bye-laws of each
Company, each certified by the Secretary of the respective Company on August
[__], 2006, minutes of a meeting of the directors of the respective Company held
on [_____], 2006 (the "Minutes"), and such other documents and made such
enquiries as to questions of law as we have deemed necessary in order to render
the opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Credit Agreement, other than the
Companies, to enter into and perform its respective obligations under the Credit
Agreement, (d) the due execution of the Credit Agreement by each of the parties
thereto, other than the Companies, and the delivery thereof by each of the
parties thereto, (e) the accuracy and completeness of all factual
representations made
- 2 -
in the Credit Agreement and other documents reviewed by us, (f) that the
resolutions contained in the Minutes remain in full force and effect and have
not been rescinded or amended, (g) that there is no provision of the law of any
jurisdiction, other than Bermuda, which would have any implication in relation
to the opinions expressed herein, (h) the validity and binding effect under the
laws of the State of New York (the "Foreign Laws") of the Credit Agreement which
is expressed to be governed by such laws in accordance with their respective
terms, (i) the validity and binding effect under the Foreign Laws of the
submission by each Company pursuant to the Credit Agreement to the Supreme Court
of the State of New York sitting in New York County and the United States
District Court of the Southern District of New York (the "Foreign Courts"), (j)
that none of the parties to the Credit Agreement has carried on or will carry on
activities, other than the performance of its obligations under the Credit
Agreement, which would constitute the carrying on of investment business in or
from within Bermuda and that none of the parties to the Credit Agreement, other
than the Companies, will perform its obligations under the Credit Agreement in
or from within Bermuda.
We have also assumed that at all material times each Company will comply with
the conditions attached to its registration as an insurer under the Insurance
Xxx 0000 and the regulations promulgated thereunder.
The obligations of the Companies under the Credit Agreement (a) will be subject
to the laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise, generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought, (c)
will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or not it
was applying the Foreign Laws, if and to the extent they constitute the payment
of an amount which is in the nature of a penalty and not in the nature of
liquidated damages. Notwithstanding any contractual submission to the
jurisdiction of specific courts, a Bermuda court has inherent discretion to stay
or allow proceedings in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the Credit
Agreement which provides for the payment of a specified rate of interest on the
amount of a judgment after the date of judgment or which purports to xxxxxx the
statutory powers of the Companies.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and the benefit of the Lenders and is not to be relied
upon by any other person, firm or entity or in respect of any other matter.
- 3 -
On the basis of and subject to the foregoing, we are of the opinion that:
1. Each of the Companies is duly incorporated and existing under the laws of
Bermuda in good standing (meaning solely that it has not failed to make any
filing with any Bermuda governmental authority or to pay any Bermuda
government fee or tax which would make it liable to be struck off the
Register of Companies and thereby cease to exist under the laws of Bermuda.
2. The Companies have the necessary corporate power and authority to enter
into and perform their respective obligations under the Credit Agreement.
The execution and delivery of the Credit Agreement, as applicable, by each
Company and the performance by each Company of its respective obligations
thereunder will not violate the memorandum of association or bye-laws of
the respective Company nor any applicable law, regulation, order or decree
in Bermuda.
3. The Companies have taken all corporate action required to authorise its
execution, delivery and performance of the Credit Agreement. The Credit
Agreement has been duly executed and delivered by or on behalf of each
Company and constitutes the valid and binding obligations of each Company
in accordance with the terms thereof.
4. No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or any
sub-division thereof is required to authorise or is required in connection
with the execution, delivery, performance and enforcement of the Credit
Agreement.
5. It is not necessary or desirable to ensure the enforceability in Bermuda of
the Credit Agreement that it be registered in any register kept by, or
filed with, any governmental authority or regulatory body in Bermuda.
6. There is no income or other tax of Bermuda imposed by withholding or
otherwise on any payment to or by any Company pursuant to the Credit
Agreement. The Credit Agreement will not be subject to ad valorem stamp
duty in Bermuda.
7. The choice of the Foreign Laws as the governing law of the Credit Agreement
is a valid choice of law and would be recognised and given effect to in any
action brought before a court of competent jurisdiction in Bermuda, except
for those laws (i) which such court considers to be procedural in nature,
(ii) which are revenue or penal laws or (iii) the application of which
would be inconsistent with public policy, as such term is interpreted under
the laws of Bermuda. The submission in the Credit Agreement to the
non-exclusive jurisdiction of the Foreign Courts is valid and binding upon
each Company.
8. The courts of Bermuda would recognise as a valid judgment a final and
conclusive judgment in personam obtained in the Foreign Courts against the
Company based upon the Credit Agreement under which a sum of money is
payable (other than a sum of money payable in respect of multiple damages,
taxes or other charges of a like nature or
- 4 -
in respect of a fine or other penalty) and would give a judgment based
thereon provided that (a) such courts had proper jurisdiction over the
parties subject to such judgment, (b) such courts did not contravene the
rules of natural justice of Bermuda, (c) such judgment was not obtained by
fraud, (d) the enforcement of the judgment would not be contrary to the
public policy of Bermuda, (e) no new admissible evidence relevant to the
action is submitted prior to the rendering of the judgment by the courts of
Bermuda and (f) there is due compliance with the correct procedures under
the laws of Bermuda.
9. The Companies are not entitled to any immunity under the laws of Bermuda,
whether characterised as sovereign immunity or otherwise, from any legal
proceedings to enforce the Credit Agreement in respect of themselves or
their property.
10. The Credit Agreement is in an acceptable legal form under the laws of
Bermuda for enforcement thereof in Bermuda.
11. Based solely upon a search of the Cause Book of the Supreme Court of
Bermuda conducted at [_____] on August [__], 2006 (which would not reveal
details of proceedings which have been filed but not actually entered in
the Cause Book at the time of our search), there are no judgments against
any of the Companies, nor any legal or governmental proceedings pending in
Bermuda to which any of the Companies is subject.
Yours faithfully
XXXXXXX XXXX & XXXXXXX
EXHIBIT C
[Form of Opinion of Special New York Counsel to Citibank]
August [__], 2006
To the Lenders party to the Credit Agreement
referred to below and
Citibank, N.A., as Administrative Agent
Ladies and Gentlemen:
We have acted as special New York counsel to Citibank, N.A.
("CITIBANK") in connection with the Credit Agreement (the "CREDIT AGREEMENT")
dated as of August [__], 2006, between Security Capital Assurance Ltd, XL
Capital Assurance Inc., XL Financial Assurance Ltd., the lenders party thereto
and Citibank, as Administrative Agent, providing for letters of credit to be
issued, or loans to be made, by said lenders to the Account Parties in an
aggregate principal or face amount not exceeding $500,000,000. Terms defined in
the Credit Agreement are used herein as defined therein. This opinion letter is
being delivered pursuant to Section 4.01(c) of the Credit Agreement.
In rendering the opinions expressed below, we have examined the
Credit Agreement. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with authentic original documents of all documents submitted to
us as copies. When relevant facts were not independently established, we have
relied upon representations made in or pursuant to the Credit Agreement. We have
also assumed that the Credit Agreement has been duly authorized, executed and
delivered by, and (except, to the extent set forth below, as to the Account
Parties) constitutes a legal, valid, binding and enforceable obligation of, all
of the parties thereto, that all signatories thereto have been duly authorized,
that all such parties are duly organized and validly existing and have the power
and authority (corporate or other) to execute, deliver and perform the same, and
that all authorizations, approvals or consents of (including all foreign
exchange control approvals), all filings or registrations with, any governmental
or regulatory authority or agency of Bermuda required for the making and
performance by any Account Party of the Credit Agreement have been obtained or
made and are in effect.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that the Credit Agreement constitutes the
legal, valid and binding obligation of each Account Party thereto, enforceable
against such Account Party in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or other similar laws relating to or affecting the rights
of creditors generally, and subject to the possible judicial application of
foreign laws or governmental action, and except as the enforceability of
- 2 -
the Credit Agreement is subject to the application of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including (a) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 9.03 of the Credit Agreement
may be limited by (i) laws rendering unenforceable indemnification
contrary to Federal or state securities laws and the public policy
underlying such laws and (ii) laws limiting the enforceability of
provisions exculpating or exempting a party from, or requiring
indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves gross
negligence, recklessness, willful misconduct or unlawful conduct.
(B) The enforceability of provisions in the Credit Agreement to
the effect that terms may not be waived or modified except in writing
may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of any
jurisdiction in which any Lender is located (other than the State of New
York) that limit the interest, fees or other charges such Lender may
impose for the loan or use of money or other credit, (ii) the last
sentence of Section 2.20(d) of the Credit Agreement, (iii) Section 9.08
of the Credit Agreement, (iv) the first sentence of Section 9.09(b) of
the Credit Agreement, insofar as such sentence relates to the subject
matter jurisdiction of the United States District Court for the Southern
District of New York to adjudicate any controversy related to the Credit
Agreement, (v) the waiver of inconvenient forum set forth in Section
9.09(c) of the Credit Agreement with respect to proceedings in the
United States District Court for the Southern District of New York, (vi)
Section 9.09(e) of the Credit Agreement to the extent it relates to
immunity acquired after the date of execution and delivery of the Credit
Agreement and (vii) Section 9.13 of the Credit Agreement.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the law of the State of New
York, and we do not express any opinion as to the laws of any other
jurisdiction.
At the request of our client, this opinion letter is, pursuant to
Section 4.01(c) of the Credit Agreement, provided to you by us in our capacity
as special New York counsel to Citibank and may not be relied upon by any other
person or for any purpose other than in connection with the transactions
contemplated by the Credit Agreement (other than your successors and assigns as
Lenders and Persons that acquire participations in your extensions of credit
under the Credit Agreement) without, in each instance, our prior written
consent.
Very truly yours,
WJM/MJB
EXHIBIT D
[Form of Confirming Lender Agreement]
[Letterhead of Issuing Lender]
[____], 20[__]
[Name of Confirming Lender]
[Address]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of August
[__], 2006 (as amended and in effect, the "CREDIT AGREEMENT"), between Security
Capital Assurance Ltd, XL Capital Assurance Inc. and XL Financial Assurance
Ltd., the Lenders party thereto and Citibank, N.A., as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.
The undersigned (the "ISSUING LENDER") is a Lender under the
Credit Agreement but is not on the date hereof listed on the most current "Bank
List" of banks approved by the NAIC. Accordingly, in order to be a "NAIC
Approved Bank" for the purposes of the Credit Agreement, the Issuing Lender
hereby requests that you be a Confirming Lender with respect to the Issuing
Lender for the purposes of the Credit Agreement and each Syndicated Letter of
Credit and Non-Syndicated Letter of Credit issued or continued thereunder.
By your signature below, you undertake that you will honor the
obligations of the Issuing Lender in respect of any draft drawn under and in
strict compliance with the terms of any Syndicated Letter of Credit and
Non-Syndicated Letter of Credit issued or continued under the Credit Agreement
as if, and to the extent, you were the Issuing Lender under the relevant
Syndicated Letter of Credit or Non-Syndicated Letter of Credit, as the case may
be. Notwithstanding the foregoing, your liability under all Syndicated Letters
of Credit and Non-Syndicated Letters of Credit at any one time issued or
continued under the Credit Agreement shall be limited to an amount (the
"LIABILITY Limit") equal to the Commitment of the Issuing Lender under the
Credit Agreement in effect on the date hereof (an amount equal to $_________).
In addition, you hereby irrevocably appoint and designate the Administrative
Agent as your attorney-in-fact, acting through any duly authorized officer of
the Person serving as the Administrative Agent, to execute and deliver, at any
time prior to the Commitment Termination Date in effect on the date of this
letter agreement, in your name and on your behalf each Syndicated Letter of
Credit and Non-Syndicated Letter of Credit to be confirmed by you in accordance
herewith and with the Credit Agreement. You agree that, promptly upon the
request of the Administrative Agent, you will furnish to the Administrative
Agent such powers of attorney or other evidence as any beneficiary of any
Syndicated Letter of Credit or Non-Syndicated Letter of Credit may reasonably
request in order to demonstrate that the Administrative Agent has the power to
act as attorney-in-fact for you in connection with the
- 2 -
execution and delivery of such Syndicated Letter of Credit or Non-Syndicated
Letter of Credit, as the case may be.
In consideration of the foregoing, the Issuing Lender agrees that
if you shall make any LC Disbursement in respect of any Syndicated Letter of
Credit or Non-Syndicated Letter of Credit, regardless of the identity of the
account party of such Syndicated Letter of Credit or Non-Syndicated Letter of
Credit, as the case may be, the Issuing Lender shall reimburse you by paying to
you an amount equal to the amount of the LC Disbursement made by you, such
payment to be made not later than noon, New York City time, on the Business Day
immediately following the day that the Issuing Lender receives such notice. The
Issuing Lender's obligations to reimburse you as provided in the foregoing
sentence shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this letter agreement under
any and all circumstances whatsoever, and irrespective of any event or
circumstance of the type described in Section 2.03(b) or 2.04(g), as applicable,
of the Credit Agreement (or of any analogous event or circumstance relating to
the undersigned).
If any LC Disbursement is made by you, then, unless the Issuing
Lender shall reimburse the amount of such LC Disbursement to you in full on the
date such LC Disbursement is made by you, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date of reimbursement, at the rate per annum equal to (i)
the Federal Funds Effective Rate to but excluding the date three Business Days
after such LC Disbursement and (ii) from and including the date three Business
Days after such LC Disbursement, 2% plus the Federal Funds Effective Rate.
This letter agreement shall be governed by and construed in
accordance with the law of the State of New York. This letter agreement is an
"agreement" of the type referred to in the definition of "Confirming Lender" in
Section 1.01 of the Credit Agreement.
- 3 -
Please indicate your acceptance of the foregoing terms and
conditions by signing the two enclosed copies of this letter agreement and
returning (a) one such signed copy to the undersigned at the address of the
Issuing Lender indicated herein and (b) the other such signed copy to the
Administrative Agent at Citibank, N.A., 0 Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxx (Telecopier No.: 000-000-0000)
(Telephone No.: 000-000-0000).
[NAME OF ISSUING LENDER]
By____________________________
Title:
AGREED AS AFORESAID:
[NAME OF CONFIRMING LENDER]
By____________________________
Title:
