EXHIBIT 99.6
SEVENTH AMENDMENT AND WAIVER TO THE CREDIT AGREEMENT
SEVENTH AMENDMENT AND WAIVER TO THE CREDIT AGREEMENT (the "Seventh
Amendment"), dated as of March 7, 2003, among TRENWICK AMERICA CORPORATION, a
Delaware corporation (the "Borrower"), Trenwick Holdings LIMITED., a company
organized under the laws of the United Kingdom and TRENWICK UK HOLDINGS LIMITED,
a company organized under the laws of the United Kingdom (collectively, the
"Account Party"), the lending institutions from time to time party to the Credit
Agreement referred to below (each a "Bank" and, collectively, the "Banks"),
WACHOVIA BANK, NATIONAL ASSOCIATION (f/k/a First Union National Bank), as
Syndication Agent (the "Syndication Agent"), Fleet National Bank, as
Documentation Agent (the "Documentation Agent"), and JPMORGAN CHASE BANK (f/k/a
The Chase Manhattan Bank), as Administrative Agent (the "Administrative Agent").
Unless otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement referred to below are used herein as so defined.
W I T N E S S E T H :
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WHEREAS, the Borrower, the Account Party, the Banks, the Syndication
Agent, the Documentation Agent and the Administrative Agent are party to a
Credit Agreement, dated as of November 24, 1999 and amended and restated as of
September 27, 2000 (as the same has been amended, modified or supplemented to,
but not including, the date hereof, the "Credit Agreement");
WHEREAS, Trenwick Group Ltd., a company organized under the laws of
Bermuda ("Holdings") and the Administrative Agent entered into a Holdings
Guaranty, dated as of September 27, 2000 (as the same has been amended, modified
or supplemented to, but not including, the date hereof, the "Holdings Guaranty")
in order to induce the Banks to make Loans to the Borrower and issue Letters of
Credit for the account of the Account Party and Guaranteed Creditors (and
Lending Affiliates thereof) to enter into Interest Rate Protection Agreements
and Other Hedging Agreements with the Borrower and/or the Account Party; and
WHEREAS, subject to the terms and conditions set forth below, the Banks
hereto wish to grant certain waivers and amendments to the Credit Agreement as
provided herein;
NOW, THEREFORE, it is agreed;
A. Waivers
1. The Banks hereby waive any Default or Event of Default that has
occurred under the Credit Agreement solely as a result of the failure by
Holdings to provide copies of its annual plan and budget (collectively, the
"Annual Plan and Budget") required pursuant to Section 3.01(c) of the Holdings
Guaranty within 45 days after the close of the fiscal year ending December 31,
2002, so long as the Annual Plan and Budget is delivered to each Bank as
promptly as possible but in any event no later than March 15, 2003.
2. The Banks hereby waive any Default or Event of Default that may have
arisen under the Credit Agreement solely as the result of the failure by
Holdings to comply with Section 4.23 of the Holdings Guaranty with respect to
the Binet Employment Agreement, the Xxxxxx Agreement, the Xxxxxx Employment
Agreement, the Xxxxx Employment Agreement or the Tier II and Tier III Retention
Bonus Agreements, in each case, from and, including, the Fourth Amendment
Effective Date, to the Seventh Amendment Effective Date (as defined below).
3. The Banks hereby waive any Default or Event of Default that may have
arisen under the Credit Agreement solely as the result of the failure by
Holdings to comply with Section 4.15 and Section 4.16 of the Holdings Guaranty
from, and including, February 10, 2003, to the Seventh Amendment Effective Date.
4. The Banks hereby waive any Default or Event of Default that may have
arisen under the Credit Agreement solely as the result of the failure by
Holdings to comply with Section 4.17(a) of the Holdings Guaranty with respect to
certain pension payments made on or about January 15, 2003 from, and including,
January 15, 2003, to the Seventh Amendment Effective Date.
5. The Banks hereby waive any Default or Event of Default that may arise
under the Credit Agreement solely as the result of the failure by Holdings to
comply with Section 3.13(b), 3.14, 3.15, 3.16 and 3.18 of the Holdings Guaranty
for the period from, and including, February 20, 2003, to and including the
Seventh Amendment Effective Date.
6. The Banks hereby waive any Default or Event of Default that may have
arisen under the Credit Agreement solely as the result of the failure by
Holdings to comply with Section 4.01(b) of the Holdings Guaranty with respect to
certain errors and omissions coverage incidental to policies issued to certain
financial institutions by Holdings and its Subsidiaries for the period from, and
including, Fourth Amendment Effective Date, to and including the Seventh
Amendment Effective Date.
7. The Banks hereby waive any Default or Event of Default that may arise
under the Credit Agreement solely as the result of the failure by Holdings to
comply with Section 3.22 of the Holdings Guaranty for the period from, and
including, March 1, 2003, to and including the March 14, 2003.
B. Amendments
1. The definition of "Specified Expenditures" appearing in Schedule I to
the Holdings Guaranty is hereby amended by (i) deleting the word "and" appearing
immediately before clause (xvi) thereof and inserting a comma in lieu thereof
and (ii) inserting the following new clauses (xvii), (xviii), (xix) and (xx)
immediately after the end of clause (xvi) thereof:
", (xvii) reasonable fees and expenses of the holders of the
Trenwick Senior Notes incurred in connection with the restructuring
thereof, (xviii) expenditures for reinsurance premium cessions, deposit
premiums, imprest account funding,
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commissions, bonus commissions and brokerage fees, return premium, losses
and loss adjustment expenses, commutation payments, claim loss fund
accounts, (xix) regulatory fees, 401(k) contributions, pension
contributions, payroll, CAT modeling license fees, software licensing
fees, financial printing costs, legal fees for reinsurance recovery and
claims, accounting, actuarial and tax services not related to the
restructuring of Holdings and its subsidiaries, systems development and
maintenance fees, insurance and reinsurance premiums, disaster recovery
fees, insurance dispute resolution requirements, insurance premiums for
director's and officer's policies and errors and omissions policies and
rating agency fees and (xx) other expenses incurred in the ordinary course
of business, so long as (A) Holdings has notified each Bank in writing no
later than 5 Business Days before Holdings or the applicable Subsidiary
makes such expenditure, which notice shall specify (w) the entity that
will make such payment, (x) the amount of the payment, (y) a description
of the expenditure and (z) the date such payment will be made and (B) the
Required Banks do not object to Holdings' or the applicable Subsidiary's
making such payment prior to the date specified in the notice previously
delivered pursuant to this clause (xix)."
2. Schedule I to the Credit Agreement is hereby amended by inserting the
following defined terms in the appropriate alphabetical order:
"Binet Employment Agreement" shall mean the letter agreement between
Holdings and Xxxxxxx Xxxxx, dated December 20, 2002, to be amended in
substantially the form of the draft delivered to the Banks on February 19,
2003; provided that such Amendment shall also include (i) a
non-solicitation clause on terms reasonably satisfactory to the
Administrative Agent and (ii) a provision for the payment of additional
compensation to Xx. Xxxxx, in the amount set forth on the Senior Executive
Compensation Schedule, payable on substantially the same terms and
conditions set forth in the Senior Executive Compensation Schedule and in
the Executive Compensation Provisions.
"Xxxxxx Agreement" shall mean the letter agreement between Holdings
and X. Xxxxxxx Xxxxxx, dated August 26, 2002, as amended by the First
Amendment thereto, dated as of December 31, 2002; provided that such
letter agreement shall be further amended to include (i) a
non-solicitation clause on terms reasonably satisfactory to the
Administrative Agent and (ii) a retention bonus and other additional
compensation payable to Xx. Xxxxxx in the amounts set forth on the Senior
Executive Compensation Schedule, payable on substantially the same terms
and conditions set forth in the Senior Executive Compensation Schedule and
in the Executive Compensation Provisions.
"Executive Compensation Provisions" shall mean the Executive
Compensation Provisions, dated March 6, 2003 and delivered to the Banks on
March 6, 2003.
"Xxxxxxxxxxx Agreement" shall mean the letter agreement to be
executed between Holdings and Xxxxx Xxxxxxxxxxx on terms and conditions
satisfactory to
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the Administrative Agent; provided that such letter agreement shall
include (i) a non-solicitation clause on terms reasonably satisfactory to
the Administrative Agent and (ii) a retention bonus and other additional
compensation payable to Xx. Xxxxxxxxxxx in the amounts set forth on the
Senior Executive Compensation Schedule, payable on substantially the same
terms and conditions set forth in the Senior Executive Compensation
Schedule and in the Executive Compensation Provisions.
"Xxxxxx Employment Agreement" shall mean the letter agreement
between Holdings and Xxxxxx Xxxxxx, dated December 17, 2002.
"Xxxxxxxx Employment Agreement" shall mean (i) the expatriate
agreement between Holdings and Xxxxx X. Xxxxxxxx, (ii) the change of
control agreement between Holdings and Xxxxx X. Xxxxxxxx and (iii) the
cash incentive bonus agreement between Holdings and Xxxxx X. Xxxxxxxx, in
each case, which agreements shall be substantially in the form of the
drafts delivered to the Banks on February 19, 2003, provided that such
agreements shall also include (i) a non-solicitation clause on terms
reasonably satisfactory to the Administrative Agent and (ii) a provision
for the payment of addition compensation to Xx. Xxxxxxxx, in the amount
set forth on the Senior Executive Compensation Schedule, payable on
substantially the same terms and conditions set forth in the Senior
Executive Compensation Schedule and in the Executive Compensation
Provisions.
"Xxxxxx Agreement" shall mean the letter agreement to be executed
between Holdings and Xxxxxxx Xxxxxx, on terms and conditions satisfactory
to the Administrative Agent; provided such letter agreement shall include
(i) a non-solicitation clause on terms reasonably satisfactory to the
Administrative Agent and (ii) the payment of additional compensation to
Xx. Xxxxxx in the amount set forth on the Senior Executive Compensation
Schedule, payable on substantially the same terms and conditions set forth
in Senior Executive Compensation Schedule and in the Executive
Compensation Provisions.
"Xxxxx Employment Agreement" shall mean the letter agreement between
Holdings and Xxxx X. Xxxxx, dated December 12, 2002, to be amended,
substantially in the form of the draft delivered to the Banks on February
19, 2003; provided that such First Amendment shall also include (i) a
non-solicitation clause on terms reasonably satisfactory to the
Administrative Agent and (ii) the payment of additional compensation to
Xx. Xxxxx in the amount set forth on the Senior Executive Compensation
Schedule, payable on substantially the same terms and conditions set forth
in the Senior Executive Compensation Schedule referred to herein and in
the Executive Compensation Provisions.
"Xxxxxxxx Agreement" shall mean the letter agreement to be executed
between Holdings and Xxxxx Xxxxxxxx, on terms and conditions satisfactory
to the Administrative Agent; provided that such letter agreement shall
include (i) a non-solicitation clause on terms reasonably satisfactory to
the Administrative Agent and (ii) the payment of additional compensation
to Xx. Xxxxxxxx in the amount set
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forth on the Senior Executive Compensation Schedule, payable on
substantially the same terms and conditions set forth in the Senior
Executive Compensation Schedule and in the Executive Compensation
Provisions.
"Senior Executive Compensation Schedule" shall mean the schedule of
Senior Executive Compensation dated March 6, 2003 and delivered to the
Banks on March 6, 2003.
"Seventh Amendment" shall mean the Seventh Amendment to the Holdings
Guaranty, dated as of March 3, 2003.
"Seventh Amendment Effective Date" shall have the meaning provided
in the Seventh Amendment.
"Specified Employees" shall mean the employees or independent
contractors of Holdings or its subsidiaries party to the Specified
Employment Agreements.
"Specified Employment Agreements" shall mean collectively, (i) the
Xxxxxx Agreement, (ii) the Binet Employment Agreement, (iii) the
Xxxxxxxxxxx Agreement, (iv) the Xxxxxx Employment Agreement, (v) the
Xxxxxxxx Employment Agreement, (vi) the Xxxxxx Agreement (vii) the Xxxxx
Employment Agreement, (viii) the Xxxxxxxx Agreement and (ix) the Xxxxxx
Employment Agreement.
"Tier II and Tier III Retention Bonus Agreements" shall mean the
retention fee agreements executed by Holdings or any Subsidiary thereof
and any employee or independent contractor of Holdings and/or any
Subsidiary thereof (other than the Specified Employees) on substantially
the same terms and conditions as set forth in the Form of Stay Bonus &
Employment Termination Agreement delivered to the Banks on March 6, 2003
and in the amounts for each person as set forth on the schedule of
Executive Compensation dated March 6, 2003 and delivered to the Banks on
March 6, 2003
"Unallocated Additional Fee Agreements" shall mean the agreements
between Holdings and any employee or independent contractor of Holdings
and/or its Subsidiaries (other than the Specified Employees) to be
executed on terms and conditions satisfactory to the Administrative Agent;
provided that such agreements may include a provision for additional
compensation in an aggregate amount that does not exceed the "Unallocated
Pool Amount" on the Senior Executive Compensation Schedule.
"Xxxxxx Employment Agreement" shall mean (i) the amended and
restated service agreement between Trenwick Managing Services Limited,
Holdings and Xxxxxxx X. Xxxxxx and (ii) the cash incentive bonus agreement
between Holdings and Xxxxxxx X. Xxxxxx, in each case, which agreements
will be substantially in the form of the drafts delivered to the Banks on
February 19, 2003, provided that such agreements will also include (i) a
non-solicitation clause on terms reasonably
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satisfactory to the Administrative Agent and (ii) the payment of
additional compensation to Xx. Xxxxxx in the amount set forth on the
Senior Executive Compensation Schedule, payable on substantially the same
terms and conditions set forth in the Senior Executive Compensation
Schedule and in the Executive Compensation Provisions.
C. Miscellaneous Provisions
1. In order to induce the Banks to enter into this Seventh Amendment, each
of the Borrower and each Account Party hereby represent and warrant on behalf of
themselves and their respective Subsidiaries that (i) the representations and
warranties of contained in Section 2 of the Holdings Guaranty are true and
correct in all material respects on and as of the Seventh Amendment Effective
Date (as defined below) (except with respect to any representations and
warranties limited by their terms to a specific date, which shall be true and
correct in all material respects as of such date), and (ii) there exists no
Default or Event of Default under the Credit Agreement on the Seventh Amendment
Effective Date, in each case after giving effect to this Seventh Amendment.
2. This Seventh Amendment is limited as specified and shall not constitute
an amendment, modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
3. THIS SEVENTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
4. This Seventh Amendment shall become effective on the date (the "Seventh
Amendment Effective Date") when each of the following conditions have been
satisfied:
(i) the Borrower, each Account Party and the Required Banks shall
have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of telecopier)
the same to the Administrative Agent; and
(ii) Holdings and the Required Banks have consented to the Seventh
Amendment to the Holdings Guaranty dated as of March 7, 2003.
5. From and after the Seventh Amendment Effective Date, all references in
the Credit Agreement and in the other Credit Documents shall be deemed to be
referenced to the Credit Agreement as modified hereby.
6. Holdings, the Borrower and each Account Party acknowledge and agree
that the execution and delivery by the Administrative Agent and the Banks of
this Seventh Amendment shall not be deemed (i) to create a course of dealing or
otherwise obligate the Administrative Agent or the Banks to forebear or execute
similar waivers, amendments or agreements under the same or similar
circumstances in the future, or (ii) to modify, relinquish or impair any right
of the Administrative Agent or the Banks to receive any indemnity or similar
payment from any Person or entity as a result of any matter arising from or
relating to this Seventh Amendment.
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7. EACH CREDIT PARTY, ON BEHALF OF ITSELF, AND ALL PERSONS AND ENTITIES
CLAIMING BY, THROUGH, OR UNDER ANY ONE OR MORE OF THEM, HEREBY JOINTLY AND
SEVERALLY RELEASES, WAIVES AND FOREVER DISCHARGES THE ADMINISTRATIVE AGENT, EACH
BANK, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, ATTORNEYS, AGENTS, AFFILIATES,
REPRESENTATIVES AND SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE "RELEASEES"), OF,
FROM, AND WITH RESPECT TO ANY AND ALL MANNER OF ACTION AND ACTIONS, CAUSE AND
CAUSES OF ACTIONS, SUITS, DISPUTES, CLAIMS AND DEFENSES, COUNTERCLAIMS AND/OR
LIABILITIES, CROSS CLAIMS, AND DEFENSES, THAT ARE KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED, PAST OR PRESENT, ASSERTED OR UNASSERTED, CONTINGENT OR LIQUIDATED,
WHETHER OR NOT WELL FOUNDED IN FACT OR LAW, WHETHER IN CONTRACT, IN TORT OR
OTHERWISE, AT LAW OR IN EQUITY, BASED UPON, RELATING TO OR ARISING OUT OF ANY
AND ALL TRANSACTIONS, RELATIONSHIPS OR DEALINGS WITH, OR LOANS MADE OR LETTERS
OF CREDIT ISSUED TO THE BORROWER, THE ACCOUNT PARTY OR THE OTHER GUARANTORS
PURSUANT TO THE CREDIT DOCUMENTS PRIOR TO THE DATE HEREOF WHICH THE BORORWER,
THE ACCOUNT PARTY OR THE OTHER GUARANTORS HAD, NOW HAVE OR MAY CLAIM TO HAVE
AGAINST THE ADMINISTRATIVE AGENT, THE BANK OR ANY OTHER RELEASEE.
8. The respective rights, powers and remedies of the Administrative Agent
and the Banks in the Credit Agreement and in the other Credit Documents are
cumulative and not exclusive of any right, power or remedy provided in the
Credit Documents, by law or equity and no failure or delay on the part of the
Administrative Agent or the Banks in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or remedy preclude any other or further exercise thereof, or
the exercise of any other right, power or remedy. Other than as set forth in
this Seventh Amendment, nothing contained in this Seventh Amendment or in any
prior communications between or among the Credit Parties, the Administrative
Agent and the Banks shall constitute a waiver or modification of any rights or
remedies that the Administrative Agents or the Banks may have under the Credit
Documents and applicable law. The Administrative Agent and the Banks expressly
reserve and preserve all of their rights and remedies available to them under
the Credit Documents, applicable law or otherwise.
* * *
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IN WITNESS WHEREOF, the undersigned have caused this Seventh Amendment to
be duly executed and delivered as of the date first above written.
TRENWICK AMERICA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President & Treasurer
TRENWICK HOLDINGS LIMITED
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Director
TRENWICK UK HOLDINGS LIMITED
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Director
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[Bank Signature Pages Intentionally Omitted]
