EXHIBIT 10.2
FOURTH CONSENT AND AMENDMENT TO CREDIT AGREEMENT
FOURTH CONSENT AND AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment"),
dated as of October 25, 2006, among QUANTA CAPITAL HOLDINGS LTD., an exempted
company organized under the laws of Bermuda (the "Company"), the Designated
Subsidiary Borrowers (as defined in the Credit Agreement referred to below)
party to the Credit Agreement referred to below, the undersigned lenders party
to the Credit Agreement referred to below, and JPMORGAN CHASE BANK, N.A. (f/k/a
JPMorgan Chase Bank) ("JPMorgan"), as Administrative Agent (in such capacity,
the "Administrative Agent") and Collateral Agent (in such capacity, the
"Collateral Agent"). Unless otherwise defined herein, all capitalized terms used
herein and defined in the Credit Agreement are used herein as therein defined.
WITNESSETH:
WHEREAS, the Company, the Designated Subsidiary Borrowers, the lenders from
time to time party thereto (the "Lenders"), the Administrative Agent, and BNP
Paribas, Calyon, New York Branch, Comerica Bank and Deutsche Bank AG New York
Branch, as Co-Documentation Agents (in such capacity, the "Co-Documentation
Agents") have entered into a Credit Agreement, dated as of July 13, 2004 and
amended and restated as of July 11, 2005 (as amended, modified and/or
supplemented to, but not including, the date hereof, the "Credit Agreement");
WHEREAS, on or prior to the Fourth Amendment Effective Date (as defined
below), the Company and certain of its subsidiaries will enter into a new credit
facility agented by ING Bank N.V., London Branch ("ING") (the "ING Credit
Facility");
WHEREAS, the Lenders and the Borrowers desire to terminate the Total
Commitment, release the Collateral and make certain modifications to the Credit
Agreement concurrently with the closing of the ING Credit Facility, subject to
and on the terms and conditions set forth herein;
WHEREAS, subject to the terms and conditions set forth below, the parties
hereto wish to amend and/or modify certain provisions of the Credit Agreement
and consent to the termination of the Total Commitment and release of the
Collateral as provided herein;
NOW, THEREFORE, it is agreed;
I. Consents and Agreements
1. Notwithstanding anything to the contrary contained in the Credit
Agreement or any other Credit Document, as of the Fourth Amendment Effective
Date, the undersigned hereby agree that the Total Commitment shall be terminated
and that none of the Administrative Agent, any Lender, the Issuing Agent or any
Fronting Lender shall be under any obligation to make any Loan, issue any Letter
of Credit, increase the Stated Amount of any Letter of Credit, extend the
expiration date of any Letter of Credit (as in effect as of the Fourth Amendment
Effective Date), or otherwise extend any additional credit pursuant to the
Credit Agreement. In addition, the undersigned hereby agree that any amendment,
supplement, or other modification to a Letter of
Credit that relates to any of the matters referred to in this Section I(1) shall
require the prior written consent of each Lender.
2. The Borrowers and the Lenders hereby authorize and direct JPMorgan, as
Issuing Agent (in such capacity, the "Issuing Agent") and as Fronting Lender (in
such capacity, the "Fronting Lender") to deliver (and the Issuing Agent and the
Fronting Lender hereby agree to deliver) a Notice of Non-Extension with respect
to each Letter of Credit outstanding on the Fourth Amendment Effective Date (the
"Existing Letters of Credit") within the time period specified in each such
Letter of Credit. To the extent reasonably practicable, the Issuing Agent and
the Fronting Lender will endeavor to notify the Company of the date on which it
will send out such Notices of Non-Renewal; provided however, that failure to so
notify the Company shall not affect the ability of the Issuing Agent and/or
Fronting Lender to deliver such Notices of Non-Renewal, nor will such failure
give rise to any claim against the Issuing Agent and/or the Fronting Lender.
3. On the Fourth Amendment Effective Date, at the sole cost and expense of
the Borrowers, the Lenders hereby release the Lien granted by the Borrowers in
favor of the Collateral Agent for the benefit of the Secured Creditors (as
defined in the Security Agreement) in the Collateral and authorize the
Collateral Agent to take (and the Collateral Agent agrees to take) such action
as is necessary or appropriate as reasonably requested by the Company to
effectuate such release, including without limitation, transferring the
Collateral to the collateral agent under the ING Credit Facility and/or
executing and delivering an account control agreement with respect to the
Collateral in favor of the collateral agent under the ING Credit Facility. In
the event that any interest or other income on any investment constituting part
of the Collateral is received by the Collateral Agent after the Fourth Amendment
Effective Date, the Collateral Agent shall deliver such interest or income to
the respective Borrower. The Collateral Agent and Lenders hereby authorize the
Company and each Designated Subsidiary Borrower to file at any time on and after
the Fourth Amendment Effective Date such Uniform Commercial Code termination
statements (including without the Collateral Agent's signature) as may be
necessary to reflect in the public record the release of the Liens in favor of
the Collateral Agent and the Lenders.
4. In consideration of the agreements and consents contained in Sections 1
and 3 above, the Borrowers will cause to be delivered to the Administrative
Agent a letter of credit issued by ING Bank N.V., London Branch substantially in
the form attached hereto as Exhibit A (the "ING Letter of Credit") and in a
stated amount equal to 102% of the Letter of Credit Outstandings as of the
Fourth Amendment Effective Date. JPMorgan hereby agrees with the Lenders that it
will not agree to any amendment, supplement or other modification to the ING
Letter of Credit (other than amendments, supplements or modifications relating
to mechanical or procedural provisions) without the prior written consent of
each Lender. JPMorgan further agrees with the Lenders that in the event that
JPMorgan draws at any time under the ING Letter of Credit, it will promptly
apply the respective proceeds received under the ING Letter of Credit to pay the
obligation or obligations in respect of which such drawing was made.
5. The Lenders authorize JPMorgan to deliver (and JPMorgan hereby agrees to
deliver) a reduction certificate in the form attached as Exhibit B to the ING
Letter of Credit (a "Reduction Certificate") to ING (i) upon the cancellation
and return to JPMorgan of any Existing Letter of Credit prior to the date of its
expiration and (ii) no later than ten (10) Business Days
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following the expiration of any undrawn Existing Letter of Credit, in each case
with the stated amount of the ING Letter of Credit to be reduced pursuant to
such Reduction Certificate by an amount (if positive) equal to (a) the stated
amount of the ING Letter of Credit immediately prior to such reduction minus (b)
105% of the Stated Amount of the remaining Existing Letters of Credit after
giving effect to the cancellations and/or expirations referred to above.
6. The Lenders hereby consent to the filing of Uniform Commercial Code
financing statements by Comerica Bank, as collateral agent under the ING Credit
Facility against the Borrowers with respect to security interests to be created
under the ING Credit Facility on or after the Fourth Amendment Effective Date.
II. Amendments to the Credit Agreement
1. Sections 2.08(c) and (d) of the Credit Agreement are hereby deleted in
their entirety.
2. Section 2.09 of the Credit Agreement is hereby amended by (a) deleting
the text "0.35%" contained in clause (c) thereof and substituting the text
"0.20%" in lieu thereof and (b) adding the following proviso at the end of the
first sentence of clause (c) thereof:
"; provided that on and after March 31, 2007, such rate shall be
increased to 0.35% of the daily Stated Amount of such Letter of Credit"
3. Section 2.09 of the Credit Agreement is hereby further amended by adding
the following clause (f) at the end of said section:
"(f) Each Borrower hereby agrees to pay to the Issuing Agent and
each Fronting Lender for their respective accounts, upon each payment under
or amendment to any Letter of Credit issued by it, such amount as shall at
the time of such event be the administrative charge and the reasonable
expenses which the Issuing Agent or such Fronting Lender, as the case may
be, is generally imposing in connection with such occurrence with respect
to letters of credit issued by it."
4. Section 6.01 of the Credit Agreement is hereby amended by adding the
following clause (k) at the end of said Section:
"(k) Notices to ING Credit Facility Lenders. Promptly after
delivery thereof, copies of any notices, reports or other information
required to be delivered to the lenders under the ING Credit Facility."
5. Section 6.01 of the Credit Agreement is hereby further amended by
deleting clause (c) thereof and replacing such clause with the following clause
(c):
"(c) [Intentionally Omitted.]".
6. Section 6.01 of the Credit Agreement is hereby further amended by
deleting clause (h) thereof and replacing such clause with the following clause
(h):
"(h) [Intentionally Omitted.]".
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7. Article VI of the Credit Agreement is hereby amended by deleting
Sections 6.02 through 6.12 contained therein (other than the first sentence of
Section 6.05); provided that the first sentence of Section 6.05 shall be amended
to read in its entirety as follows:
"The Company shall maintain, and shall cause each of its Subsidiaries
to maintain, its existence, provided that (i) the business of the
Designated Subsidiary Borrowers may be wound up (so long as their
respective existences are maintained) and (ii) the Company shall not be
required to maintain the existence of any of its Subsidiaries (other than
the Designated Subsidiary Borrowers) if the Company shall determine in good
faith that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries taken as a whole.".
8. Article VII of the Credit Agreement is hereby amended by deleting
Sections 7.01 through 7.13 contained therein and replacing such sections with
the following Section 7.01:
"Section 7.01. Change of Control. The Company will not, and will not
permit any of its Subsidiaries to, enter into any transaction that would
result in a Change of Control, or otherwise permit to occur a Change of
Control."
Article VIII of the Credit Agreement is hereby deleted in its
entirety.
III. Miscellaneous Provisions
2. The Lenders and the Administrative Agent agree that (a) the covenants
and agreements contained in (i) Section I(1) and Section II of that certain
First Amendment and Waiver to the Credit Agreement, dated as of July 6, 2006,
among the Company, the Designated Subsidiary Borrowers, certain Lenders and the
Administrative Agent, (ii) Section I of that certain Second Waiver to the Credit
Agreement, dated as of August 11, 2006 among Company, the Designated Subsidiary
Borrowers, the Lenders and the Administrative Agent and (iii) Section I of that
certain Third Waiver to the Credit Agreement, dated as of September 27, 2006
among Company, the Designated Subsidiary Borrowers, the Lenders and the
Administrative Agent, in each case, are terminated effective as of the Fourth
Amendment Effective Date and (b) no Default or Event of Default under the Credit
Agreement shall remain in existence as of and following the Fourth Amendment
Effective Date.
3. This Fourth Amendment is limited as specified and shall not, except as
expressly provided herein, constitute a modification, acceptance or waiver of
any other provision of the Credit Agreement or any other Credit Document.
4. This Fourth Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Delivery of an executed
signature page of this Fourth Amendment by facsimile (or other electronic)
transmission shall be effective as delivery of a manually executed counterpart
hereof. A complete set of counterparts executed by all the parties hereto shall
be lodged with the Company and the Administrative Agent.
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5. THIS FOURTH 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.
6. This Fourth Amendment shall become effective on the date (the "Fourth
Amendment Effective Date") when (i) the Company, the Designated Subsidiary
Borrowers and each Lender shall have signed a counterpart hereof (whether the
same or different counterparts) and shall have delivered (including by way of
facsimile (or other electronic) transmission) the same to the Administrative
Agent, c/o White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxx Xxxxxxxxx (Facsimile No. 000-000-0000;
xxxxxxxxxx@xxxxxxxxx.xxx), (ii) the Company shall have delivered the ING Letter
of Credit to the Administrative Agent, (iii) the Borrowers shall have paid all
accrued and unpaid fees payable pursuant to Section 2.09(a) of the Credit
Agreement and accrued and unpaid Letter of Credit Fees and (iv) the Company
shall have paid all outstanding costs and expenses of the Administrative Agent
in connection with the Credit Agreement and this Fourth Amendment (including,
without limitation, all costs and expenses of counsel to the Administrative
Agent in connection therewith and herewith).
7. From and after the Fourth Amendment Effective Date, all references in
the Credit Agreement and in the other Credit Documents to the Credit Agreement
shall be deemed to be a reference to the Credit Agreement as modified hereby.
This Fourth Amendment shall constitute a Credit Document for all purposes under
the Credit Agreement and the other Credit Documents.
8. The Credit Agreement shall terminate upon the date on which no Letters
of Credit remain outstanding and the principal of and all accrued interest on
all Loans and all fees and any other amounts payable under the Credit Agreement
have been indefeasibly paid in full; provided that the provisions referred to in
the last sentence of Section 11.05 shall remain in full force and effect
notwithstanding such termination.
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IN WITNESS WHEREOF, the undersigned have caused this Fourth Amendment to be
duly executed and delivered as of the date first above written.
QUANTA CAPITAL HOLDINGS LTD.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
QUANTA REINSURANCE LTD.
By: /s/ Xxxxxxxx X.X. Xxxx
------------------------------------
Name: Xxxxxxxx X.X. Xxxx
Title: Chief Financial Officer
QUANTA U.S. HOLDINGS INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
QUANTA REINSURANCE U.S. LTD.
By: /s/ Xxxxxxxx X.X. Xxxx
------------------------------------
Name: Xxxxxxxx X.X. Xxxx
Title: Chief Financial Officer
QUANTA INDEMNITY COMPANY
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
JPMORGAN CHASE BANK, N.A., Individually,
as Administrative Agent, as Collateral
Agent, as Issuing Agent and as Fronting
Lender
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
BNP PARIBAS
By: /s/ Xxxxxx Xxxxxxxxxxx
------------------------------------
Name: Larent Vander...
Title: Managing Director
By: /s/ Phil Triesdah
------------------------------------
Name: Phil Triesdah...
Title: Managing Director
CALYON, NEW YORK BRANCH
By: /s/ Xxxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: MD
COMERICA BANK
By: /s/ Chatphet Saipetch
------------------------------------
Name: Chatphet Saipetch
Title: Vice President
BARCLAYS BANK PLC
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Manager
ING BANK N.V., LONDON BRANCH
By: /s/ N.J. Xxxxxxxx
------------------------------------
N.J. Xxxxxxxx
Director
By: /s/ M. E. R. Sharman
------------------------------------
M. E. R. Sharman
Managing Director
DEUTSCHE BANK AG NEW YORK BRANCH
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Director
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
Exhibit A
ING Letter of Credit
