THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Published on March 24, 1997
EXHIBIT 10.7
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THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of December 12, 1996
among
RENAISSANCERE HOLDINGS LTD.
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
FLEET NATIONAL BANK
and
MELLON BANK, N.A., AS CO-AGENTS,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent for the Lenders
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TABLE OF CONTENTS
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(i)
(ii)
ARTICLE IX.
THE ADMINISTRATIVE AGENT
(iii)
SCHEDULES AND EXHIBITS
SCHEDULE 1.2 Pricing Grid
SCHEDULE 2.1 Commitments
SCHEDULE 4.1 Jurisdictions
SCHEDULE 4.2(a) SAP Exceptions
SCHEDULE 4.2(b) Adverse Changes
SCHEDULE 4.4 Litigation
SCHEDULE 4.5 ERISA
SCHEDULE 4.9 Insurance
SCHEDULE 4.11 Locations
SCHEDULE 4.13 Subsidiaries
SCHEDULE 4.14 Insurance Licenses
SCHEDULE 4.15 Taxes
SCHEDULE 6.7 Liens
SCHEDULE 10.2 Addresses
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Notice of Conversion/Continuation
EXHIBIT C Form of Compliance Certificate
EXHIBIT D Form of Legal Opinion of Borrower's Counsel
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F Form of Promissory Note
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
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THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December
12, 1996, is entered into by and among RenaissanceRe Holdings Ltd., a Bermuda
company (the "Borrower"), various financial institutions which are parties
hereto (the "Lenders"), Fleet National Bank and Mellon Bank, N.A., as Co-Agents
and Bank of America National Trust and Savings Association, as Administrative
Agent for the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
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WHEREAS, pursuant to the Second Amended and Restated Credit Agreement
dated as of January 16, 1996 (the "Original Credit Agreement") among the
Borrower, certain financial institutions (the "Original Credit Agreement Banks")
and the Administrative Agent, the Borrower borrowed certain revolving loans (the
"Original Loans");
WHEREAS, the Borrower desires to obtain commitments from the Lenders,
including the Original Credit Agreement Banks pursuant to which the Lenders
would refinance the Original Loans;
WHEREAS, the Borrower has requested the Lenders and the Administrative
Agent to amend and restate the Original Credit Agreement, on the terms and
conditions set forth in this Agreement, to among other things, set forth the
terms and conditions under which the Lenders hereafter will make Loans to the
Borrower; it being the intention of the Borrower, the Lenders and the
Administrative Agent that this Agreement and the Loan Documents executed in
connection herewith shall not effect the novation of the obligations of the
Borrower under the Original Credit Agreement but merely a restatement and, where
applicable, an amendment of the terms governing such obligations hereafter;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 Definitions. When used herein the following terms shall
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have the following meanings:
Administrative Agent means (a) Bank of America National Trust and
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Savings Association, in its capacity as administrative agent for the Lenders,
and (b) each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to Section 9.9.
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Affiliate of any Person means any other Person which, directly or
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indirectly, controls or is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be:
(a) "controlled by" any other Person if such other Person possesses,
directly or indirectly, power:
(i) to vote 20% or more of the securities having at the time of any
determination hereunder voting power for the election of directors of such
Person; or
(ii) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise; or
(b) "controlled by" or "under common control with" such other Person
if such other Person is the executor, administrator, or other personal
representative of such Person.
Agent-Related Persons means BofA and any successor administrative
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agent arising under Section 9.9, together with their respective Affiliates, and
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the officers, directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.
Agent's Payment Office means the address for payments set forth on
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Schedule 10.2 in relation to the Administrative Agent, or such other address as
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the Administrative Agent may from time to time specify.
Agreement means this Third Amended and Restated Credit Agreement.
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Amendment Effective Date means the date on which the conditions
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precedent for the effectiveness of this Agreement specified in Section 8.1 shall
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be met.
Annual Statement means the annual financial statement of any Insurance
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Subsidiary as required to be filed with the Minister (or similar Governmental
Authority) of such Insurance Subsidiary's domicile, together with all exhibits
or schedules filed therewith, prepared in conformity with SAP. References to
amounts on particular exhibits, schedules, lines, pages and columns of the
Annual Statement are based on the format promulgated by the Minister for the
1995 Annual Statements. If such format is changed in future years so that
different information is contained in such items or they no longer exist, it is
understood that the reference is to information consistent with that reported in
the referenced item in the 1995 Annual Statement of such Insurance Subsidiary.
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Applicable Margin means (a) in the case of Offshore Rate Loans, the
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rate set forth opposite "Offshore Rate" on the Pricing Grid for the applicable
Pricing Level and (b) in the case of Base Rate Loans, 0%.
Applicable Non-Use Fee Rate means the rate set forth opposite the
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"Non-Use Fee" on the Pricing Grid for the applicable Pricing Level.
Assignee is defined in Section 10.8(a).
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Assignment and Acceptance is defined in Section 10.8(a).
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Attorney Costs means and includes all fees and disbursements of any
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law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
Authorized Officers means those officers of the Borrower whose
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signatures and incumbency shall have been certified to the Administrative Agent
pursuant to Section 8.1(c).
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Base Rate means, for any day, the higher of: (a) 0.50% per annum
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above the latest Federal Funds Rate; and (b) the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by
BofA based upon various factors including BofA's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.)
Any change in the reference rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement of
such change.
Base Rate Loan means a Loan that bears interest based on the Base
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Rate.
BofA means Bank of America National Trust and Savings Association, a
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national banking association.
Borrowing means a borrowing hereunder consisting of Loans of the same
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Type made to the Borrower on the same day by the Lenders under Article II, and,
other than in the case of Base Rate Loans, having the same Interest Period.
Borrowing Date means any date on which a Borrowing occurs under
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Section 2.4.
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Borrower is defined in the Preamble.
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Business Day means any day other than a Saturday, Sunday or other day
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on which commercial banks in New York City, Chicago, San Francisco or Hamilton,
Bermuda are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on which
dealings are carried on in the applicable eurodollar interbank market. Each
Lender located in Bermuda shall provide the Administrative Agent with a list of
Bermuda banking holidays thirty (30) days prior to each January 1.
Capital Adequacy Regulation means any guideline, request or directive
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of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
Capitalized Lease means, as to any Person, any lease which is or
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should be capitalized on the balance sheet in accordance with GAAP, together
with any other lease which is in substance a financing lease, including, without
limitation, any lease under which (a) such Person has or will have an option to
purchase the property subject thereto at a nominal amount or an amount less than
a reasonable estimate of the fair market value of such property as of the date
the lease is entered into or (b) the term of the lease approximates or exceeds
the expected useful life of the property leased thereunder.
Change in Control shall be deemed to have occurred if (a) any sale,
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lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Borrower
occurs; (b) any "person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") other than a
Founding Shareholder, is or becomes, directly or indirectly, the "beneficial
owner," as defined in Rule 13d-3 under the Exchange Act, of securities of the
Borrower that represent 51% or more of the combined voting power of the
Borrower's then outstanding securities; or (c) a majority of the members of the
Borrower's Board of Directors are persons who are then serving on the Board of
Directors without having been elected by the Board of Directors or having been
nominated for election by its shareholders.
Closing means the execution and delivery of this Agreement by the
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parties hereto.
Closing Date means December 15, 1994.
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Code means the Internal Revenue Code of 1986, as amended and any
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successor statute of similar import, together with the regulations thereunder,
as amended, reformed or otherwise modified and in effect from time to time.
References to sections of the Code shall be construed to also refer to successor
sections.
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Commitment is defined in Section 2.1.
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Commitment Amount means, on any date, the aggregate amount shown on
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Schedule 2.1 for all Lenders, as such amount may be adjusted pursuant to Section
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2.2, 7.2 or 10.8.
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Commitment Termination Date means the earliest to occur of (a)
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December 1, 1999, as such date may be extended pursuant to Section 2.13 or (b)
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the date on which any Commitment Termination Event occurs.
Commitment Termination Event means (a) the occurrence of a Default
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described in Section 7.1(e) or (b) the occurrence and continuance of any other
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Event of Default and either (i) the Loans are declared to be due and payable
pursuant to Section 7.2, or (ii) in the absence of such declaration, the
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Administrative Agent, acting at the direction of the Required Lenders, gives
notice to the Borrower that the Commitments have been terminated.
Compliance Certificate means a certificate substantially in the form
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of Exhibit C but with such changes as the Administrative Agent may from time to
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time request for purposes of monitoring the Borrower's compliance herewith.
Consolidated Debt means the consolidated Debt of the Borrower and its
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Subsidiaries, including without limitation the principal amount of the Loans.
Contingent Liability means any agreement, undertaking or arrangement
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by which any Person (outside the ordinary course of business) guarantees,
endorses, acts as surety for or otherwise becomes or is contingently liable for
(by direct or indirect agreement, contingent or otherwise, to provide funds for
payment by, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the Debt, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or for the payment of dividends or other distributions
upon the shares of any other Person or undertakes or agrees (contingently or
otherwise) to purchase, repurchase, or otherwise acquire or become responsible
for any Debt, obligation or liability or any security therefor, or to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition of any other
Person, or to make payment or transfer property to any other Person other than
for fair value received; provided, however, that obligations of each of the
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Insurance Subsidiaries under Primary Policies or Reinsurance Agreements which
are entered into in the ordinary course of business (including security posted
by each of the Insurance Subsidiaries in the ordinary course of its business to
secure obligations thereunder) shall not be deemed to be Contingent Liabilities
of such Insurance Subsidiary or the Borrower for the purposes of this
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Agreement. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum permitted principal amount, if larger)
of the Debt, obligation or other liability guaranteed or supported thereby.
Contractual Obligation means, relative to any Person, any obligation,
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commitment or undertaking under any agreement or other instrument to which such
Person is a party or by which it or any of its property is bound or subject.
Controlled Group means the Borrower and any corporation, trade or
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business that is, along with the Borrower, a member of a controlled group of
corporations or a controlled group of trades or businesses as described in
sections 414(b) and 414(c), respectively, of the Code or in section 4001 of
ERISA.
Debt means, with respect to any Person, at any date, without
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duplication, (a) all obligations of such Person for borrowed money or in respect
of loans or advances; (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in respect
of letters of credit which have been drawn but not reimbursed by the Person for
whose account such letter of credit was issued, and bankers' acceptances issued
for the account of such Person; (d) all obligations in respect of Capitalized
Leases of such Person; (e) all Hedging Obligations of such Person other than
Hedging Obligations which are reflected in such Person's financial statements;
(f) whether or not so included as liabilities in accordance with GAAP, all
obligations of such Person to pay the deferred purchase price of property or
services; (g) Debt of such Person secured by a Lien on property owned or being
purchased by such Person (including Debt arising under conditional sales or
other title retention agreements) whether or not such Debt is limited in
recourse; (h) any Debt of another Person secured by a Lien on any assets of such
first Person, whether or not such Debt is assumed by such first Person; (i) any
Debt of a partnership in which such Person is a general partner; and (j) all
Contingent Liabilities of such Person whether or not in connection with the
foregoing; provided that, notwithstanding anything to contrary contained herein,
Debt shall not include (x) issued, but undrawn, letters of credit which have
been issued to reinsurance cedents in the ordinary course of business or, (y)
unsecured current liabilities incurred in the ordinary course of business and
paid within 90 days after the due date (unless contested diligently in good
faith by appropriate proceedings and, if requested by the Administrative Agent,
reserved against in conformity with GAAP) other than liabilities that are for
money borrowed or are evidenced by bonds, debentures, notes or other similar
instruments (except as described in clause (x) above) or (z) any obligations of
such Person under any Reinsurance Agreement or any Primary Policy.
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Debt to Capital Ratio means the ratio of (a) Consolidated Debt to (b)
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the sum of Net Worth plus Consolidated Debt.
Default means any condition or event, which, after notice or lapse of
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time or both, would constitute an Event of Default.
Department is defined in Section 4.2.
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Dollar(s) and the sign "$" means lawful money of the United States of
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America.
"Eligible Assignee" means (a) a commercial bank organized under the
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laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $250,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $250,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary
of a Person of which a Lender is a Subsidiary, or (iii) a Person of which a
Lender is a Subsidiary; and (d) mutual funds, pension funds and other
institutional investors (except an Affiliate of the Borrower) regularly engaged
in the making of commercial loans.
ERISA means the Employee Retirement Income Security Act of 1974, as
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amended, and any successor statute of similar import, together with the
regulations promulgated thereunder and under the Code, in each case as in effect
from time to time. References to sections of ERISA also refer to successor
sections.
ERISA Event means, with respect to the Borrower, (a) a Reportable
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Event (other than a Reportable Event not subject to the provision for 30-day
notice to the PBGC under regulations issued under section 4043 of ERISA), (b)
the withdrawal of the Borrower or any Affiliate from a Plan during a plan year
in which it was a "substantial employer" as defined in section 4001(a)(2) of
ERISA if such withdrawal would have a Material Adverse Effect on the Borrower,
or on the Borrower and its Subsidiaries taken as a whole, (c) the filing of a
notice of intent to terminate a Plan under a distress termination or the
treatment of a Plan amendment as a distress termination under section 4041(c) of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC under
section 4042 of ERISA, (e) the failure to make required contributions which
would result in the imposition of a Lien under section 412 of the Code or
section 302 of ERISA, or (f) any other event or condition which might reasonably
be expected to constitute grounds under section 4042 of ERISA for the
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termination of, or the appointment of a trustee to administer, any Plan.
Event of Default means any of the events described in Section 7.1.
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Executive Officer means, as to any Person, the president, the chief
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financial officer, the chief executive officer, the general counsel, the
treasurer or the secretary.
Federal Funds Rate means, for any day, the rate set forth in the
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weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.
Fiscal Quarter means any quarter of a Fiscal Year.
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Fiscal Year means any period of twelve consecutive calendar months
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ending on the last day of December.
FRB means the Board of Governors of the Federal Reserve System, and
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any Governmental Authority succeeding to any of its principal functions.
Founding Shareholders means Persons who are signatories to the
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Shareholders Agreement on the Amendment Effective Date or their Affiliates.
Funding Percentage means for any Lender, the percentage set forth
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opposite the name of such Lender in Schedule 2.1 as the same may be adjusted
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from time to time pursuant to Section 10.8.
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GAAP means generally accepted accounting principles set forth from
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time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Governmental Authority means any nation or government, any state or
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other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
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Hedging Obligations means, with respect to any Person, the net
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liability of such Person under any futures contract or options contract
(including property catastrophe futures and options), interest rate swap
agreements and interest rate collar agreements and all other agreements or
arrangements (other than Retrocession Agreements) designed to protect such
Person against catastrophic events, fluctuations in interest rates or currency
exchange rates.
Indemnified Liabilities is defined in Section 10.5.
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Indemnified Person is defined in Section 10.5.
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Insurance Code means, with respect to any Insurance Subsidiary, the
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Insurance Code of such Insurance Subsidiary's domicile and any successor statute
of similar import, together with the regulations thereunder, as amended or
otherwise modified and in effect from time to time. References to sections of
the Insurance Code shall be construed to also refer to successor sections.
Insurance Policies means policies purchased from insurance companies
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by any of the Borrower or its Subsidiaries, for its own account to insure
against its own liability and property loss (including, without limitation,
casualty, liability and workers' compensation insurance), other than
Retrocession Agreements.
Insurance Subsidiary means Renaissance Reinsurance Ltd., a Bermuda
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company and any other Subsidiary of the Borrower created after the Closing Date.
Interest Payment Date means, as to any Offshore Rate Loan, the last
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day of each Interest Period applicable to such Loan and if an Interest Period
exceeds three months, the day three months after the commencement of the
Interest Period and, as to any Base Rate Loan, the last Business Day of each
calendar quarter.
Interest Period means as to any Offshore Rate Loan, the period
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commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
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(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the following
Business Day unless, in the case of an Offshore Rate Loan, the result of
such extension would be to carry such Interest Period into another calendar
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month, in which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan
that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend beyond the
scheduled Commitment Termination Date.
Invested Assets means cash, cash equivalents, short term investments,
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investments held for sale and any other assets which are treated as investments
under GAAP.
IRS means the U.S. Internal Revenue Service, and any Governmental
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Authority succeeding to any of its principal functions under the Code.
Lenders is defined in the Preamble.
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Lending Office means, as to any Lender, the office or offices of such
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Lender specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 10.2, or such other
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office or offices as such Lender may from time to time notify the Borrower and
the Administrative Agent.
License(s) is defined in Section 4.14.
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Lien means, when used with respect to any Person, any interest in any
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real or personal property, asset or other right held, owned or being purchased
or acquired by such Person for its own use, consumption or enjoyment which
secures payment or performance of any obligation and shall include any mortgage,
lien, pledge, encumbrance, charge, retained title of a conditional vendor or
lessor, or other security agreement, mortgage, deed of trust, chattel mortgage,
assignment, pledge, retention of title, financing or similar statement or
notice, or other encumbrance arising as a matter of law, judicial process or
otherwise.
"Loan" means an extension of credit by a Lender to the Borrower under
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Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type"
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of Loan).
Loan Documents means this Agreement, any Notes and all other
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agreements, instruments, certificates, documents, schedules or other written
indicia delivered by the Borrower or any of its Subsidiaries in connection with
any of the foregoing.
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Margin Stock means "margin stock" as such term is defined in
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Regulation G, T, U or X of the FRB.
Material Adverse Effect means, the occurrence of an event (including
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any adverse determination in any litigation, arbitration, or governmental
investigation or proceeding), which has or could reasonably be expected to have
a materially adverse effect on:
(a) the assets, business, financial condition or operations of
the Borrower and its Subsidiaries taken as a whole; or
(b) the ability of the Borrower to perform any of its payment or
other material obligations under any of the Loan Documents; or
(c) the legality, validity, binding effect or enforceability
against the Borrower of any Loan Document that by its terms purports to
bind the Borrower.
Minister means the Minister of Finance of Bermuda or similar
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Governmental Authority in the applicable jurisdiction.
Multiemployer Plan means a "multiemployer plan" as defined in section
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4001(a)(3) of ERISA, and to which the Borrower or any of the Subsidiaries is
making, or is obligated to make, contributions, or has made, or has been
obligated to make, contributions.
Net Debt Proceeds means, relative to Debt described in clause (a) or
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(b) of the definition of Debt issued or incurred by the Borrower after the
Closing Date (other than Debt under this Agreement or Debt issued to any
Founding Shareholder which by its terms does not provide for principal payments
prior to the Commitment Termination Date, as such Date may be extended, and is
subordinate to the Obligations), the excess of
(a) the gross cash proceeds received by the Borrower
over
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(b) all reasonable underwriting commissions, private placement
fees, legal, investment banking, and accounting fees and disbursements,
printing expenses, and any governmental or exchange fees incurred (or
reasonably expected to be incurred) in connection with such issuance or
incurrence which are not payable to Affiliates of the Borrower.
Net Securities Proceeds means, relative to the sale by the Borrower of
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any stock, warrants or other equity securities
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which qualify as equity under GAAP (other than sales to Founding Shareholders),
the excess of
(a) the gross cash proceeds received by the Borrower from such
sale or contribution
over
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(b) all reasonable underwriting commissions, private placement
fees, legal, investment banking, and accounting fees and disbursements,
printing expense, and any governmental or exchange fees incurred (or
reasonably expected to be incurred) in connection with such sale which are
not payable to Affiliates of the Borrower.
Net Worth means the shareholders equity, calculated in accordance with
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GAAP, plus any preferred shares of the Borrower and its consolidated
Subsidiaries which shall not be redeemable before the Commitment Termination
Date.
Note means a promissory note executed by the Borrower in favor of a
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Lender pursuant to Section 2.3(b), in substantially the form of Exhibit F.
Notice of Borrowing means a notice in substantially the form of
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Exhibit A.
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Notice of Conversion/Continuation means a notice in substantially the
---------------------------------
form of Exhibit B.
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Obligations means all obligations and liabilities of the Borrower and
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its Subsidiaries to the Administrative Agent or any of the Lenders, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, primary or secondary, joint or several, recourse or nonrecourse or
now or hereafter existing or due or to become due, whether for principal,
interest, fees, expenses, lease obligations, claims, indemnities or otherwise,
under or in connection with this Agreement, or any other Loan Document.
Offshore Rate means, for any Interest Period, with respect to Offshore
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Rate Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/16th of 1%) determined by the Administrative Agent
as follows:
Offshore Rate = LIBOR
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1.00 - Eurodollar Reserve Percentage
Where,
Eurodollar Reserve Percentage means for any day for any Interest
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Period the maximum reserve percentage (expressed as a decimal, rounded
upward to
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the next 1/100th of 1%) in effect on such day (whether or not applicable to
any Lender) under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency liabilities");
and
LIBOR means the rate of interest per annum determined by the
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Administrative Agent to be the arithmetic mean (rounded upward to the next
1/16th of 1%) of the rates of interest per annum determined by the
Administrative Agent as the rate of interest at which dollar deposits in
the approximate amount of the amount of the Loan to be made or continued
as, or converted into, an Offshore Rate Loan by the Administrative Agent or
its Affiliates and having a maturity comparable to such Interest Period
would be offered by the Administrative Agent to major banks in the London
interbank market at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
Offshore Rate Loan means a Loan that bears interest based on the
------------------
Offshore Rate.
Ordinary Course Litigation is defined in Section 4.4.
-------------------------- ------------
Organization Documents means, for any corporation, the certificate or
----------------------
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
Original Credit Agreement is defined in the recitals.
------------------------- ---------
Original Credit Agreement Banks is defined in the recitals.
------------------------------- ---------
Original Loans is defined in the recitals.
--------------
Other Taxes means any present or future stamp or documentary taxes or
-----------
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents.
Participants is defined in Section 10.8(d).
------------ ----------------
- 13 -
PBGC means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions.
Permitted Investment means, at any time:
--------------------
(a) any evidence of Debt, maturing not more than one year after such
time, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than one year from the date
of issue, which is issued by
(i) a corporation (except an Affiliate of the Borrower) rated at
least A-2 by Standard & Poor's Rating Group, P-2 by Moody's Investors
Service, Inc. or D-2 by Duff & Phelps Credit Rating Company, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers' acceptance or eurodollar
time deposit, maturing not more than one year after the date of issue,
which is issued by either
(i) a financial institution which is rated at least BBB- by
Standard & Poor's Rating Group or Duff & Phelps Credit Rating Company
or Baa3 by Moody's Investors Service, Inc. or 2 or above by the
National Association of Insurance Commissioners, or
(ii) any Lender; or
(d) any repurchase agreement with a term of one year or less which
(i) is entered into with
(A) any Lender, or
(B) any other commercial banking institution of the stature
referred to in clause (c)(i), and
-------------
(ii) is secured by a fully perfected Lien in any obligation of
the type described in any of clauses (a) through (c) that has a market
----------- ---
value at the time such repurchase agreement is entered into of not
less than 100% of the repurchase obligation of such Lender (or other
commercial banking institution) thereunder;
(e) investments in money market funds that invest solely in Permitted
Investments described in clauses (a) through (d);
----------- ---
(f) investments in short-term asset management accounts offered by
any Lender for the purpose of investing
- 14 -
in loans to any corporation (other than an Affiliate of the Borrower)
organized under the laws of any state of the United States or of the
District of Columbia and rated at least A-1 by Standard & Poor's Rating
Group or P-1 by Moody's Investors Service, Inc.;
(g) investments in non-equity securities which are rated at least BBB-
by Standard & Poor's Rating Group or Duff & Phelps Credit Rating Company or
Baa3 by Moody's Investors Service, Inc. or 2 or above by the National
Association of Insurance Commissioners; or
(h) investments in non-equity securities which are not rated but are
determined by the Borrower's investment managers to be of comparable
quality to investments permitted under clause(g); provided, however, that
--------- -------- -------
as promptly as practicable upon receipt of a written notice from the
Administrative Agent or the Required Lenders stating that an investment is
not permitted under this clause (h), the Borrower shall sell such
----------
investment.
Person means any natural person, corporation, partnership, firm,
------
trust, association, government, governmental agency or other entity, whether
acting in an individual, fiduciary or other capacity.
Plan means any "employee pension benefit plan," as such term is
----
defined in ERISA, which is subject to Title IV of ERISA (other than a
"Multiemployer Plan"), and as to which any entity in the Controlled Group has or
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA for any time
within the preceding five years or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
Pricing Grid means the Pricing Grid set forth on Schedule 1.2.
------------ -------------
Pricing Level means the Pricing Level on the Pricing Grid which is
-------------
applicable from time to time and in accordance with Section 2.7(c).
---------------
Primary Policies means any insurance policies issued by an Insurance
----------------
Subsidiary.
Pro Rata Share means as to any Lender at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Lender's Commitment divided by the combined Commitments of all
Lenders.
Registration Rights Agreement means the Registration Rights Agreement
-----------------------------
dated as of May 6, 1996 among the Borrower, Warburg, Pincus Investors, L.P.,
Trustees of General Electric Pension Trust, GE Investment Private Placement
Partners I,
- 15 -
Limited Partnership, United States Fidelity and Guaranty
Company and certain individuals.
Reinstatement Premiums means premiums charged to insureds to
----------------------
reinstate or continue coverage under a Reinsurance Policy after a
loss.
Reinsurance Agreements means any agreement, contract, treaty,
----------------------
certificate or other arrangement whereby any Insurance Subsidiary agrees to
assume from or reinsure another insurer or reinsurer all or part of the
liability of such insurer or reinsurer under a policy or policies of insurance
issued by such insurer or reinsurer.
Reportable Event means, any of the events set forth in Section
----------------
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
Required Lenders means, at any time, Lenders then having at
----------------
least 60% of the aggregate amount of the Commitments or, if the Commitments have
been terminated, Lenders then holding at least 60% of the then aggregate unpaid
principal amount of the Loans.
Requirement of Law for any Person means the Organization
------------------
Documents of such Person, and any law, treaty, rule, ordinance or regulation or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
Retrocession Agreements means any agreement, treaty,
-----------------------
certificate or other arrangement whereby any Insurance Subsidiary cedes to
another insurer all or part of such Insurance Subsidiary's liability under a
policy or policies of insurance reinsured by such Insurance Subsidiary.
SAP means, as to each Insurance Subsidiary, the statutory
---
accounting practices prescribed or permitted by the Minister (or other similar
authority) in such Insurance Subsidiary's domicile for the preparation of Annual
Statements and other financial reports by insurance corporations of the same
type as such Insurance Subsidiary.
Shareholders Agreement means the Shareholders Agreement dated
----------------------
as of August 1, 1995 among the Borrower, United States Fidelity and Guaranty
Company, Warburg, Pincus Investors, L.P., Trustees of the General Electric
Pension Trust and GE Investment Private Placement Partners I, Limited
Partnership.
S&P Claims Rating means the claims paying ability rating of
-----------------
Renaissance Reinsurance Ltd. as determined from time to
- 16 -
time by Standard & Poor's Ratings Group. If at any time no such rating shall be
determined, it shall be assumed to be below BBB+.
Statutory Financial Statements is defined in Section 4.2(a).
------------------------------ --------------
Subsidiary means a corporation of which the indicated Person and/or its
----------
other Subsidiaries, individually or in the aggregate, own, directly or
indirectly, such number of outstanding shares as have at the time of any
determination hereunder more than 50% of the ordinary voting power. Unless
otherwise specified, "Subsidiary" shall mean a Subsidiary of the Borrower.
Taxes means any and all present or future taxes, levies, imposts,
-----
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Lender's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Administrative Agent, as the
case may be, is organized or maintains a lending office.
Welfare Plan means any "employee welfare benefit plan" as such term is
------------
defined in ERISA, as to which the Borrower has any liability.
SECTION 1.2. Other Interpretive Provisions. (a) The meanings of defined
-----------------------------
terms are equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation. "
(iii) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words
"to" and "until" each mean "to but excluding", and the word "through" means
"to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent
- 17 -
amendments and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent's or Lenders'
involvement in their preparation.
SECTION 1.3. Accounting Principles. Unless otherwise defined or the
---------------------
context otherwise requires, all financial and accounting terms used herein or in
any of the Loan Documents or any certificate or other document made or delivered
pursuant hereto shall be defined in accordance with GAAP or SAP, as the context
may require. When used in this Agreement, the term "financial statements" shall
include the notes and schedules thereto. In addition, when used herein, the
terms "best knowledge of" or "to the best knowledge of" any Person shall mean
matters within the actual knowledge of such Person (or an Executive Officer or
general partner of such Person) or which should have been known by such Person
after reasonable inquiry.
SECTION 1.4. Reallocation of Pro Rata Shares. By their execution of
-------------------------------
this Agreement, each of the Lenders agrees that effective on the Amendment
Effective Date, the Pro Rata Shares of the Original Credit Agreement Banks are
adjusted to equal the respective percentages set forth on Schedule 2.1. On the
------------
Amendment Effective Date, the Borrower shall terminate the Interest Periods
applicable to the Original Loans and shall repay the Original Loans in full
(including interest thereon) with the proceeds of the initial Loans made under
this Agreement. In the event any Original Credit Agreement Bank has been issued
a Note, such Original Credit Agreement Bank shall, on or before the Amendment
Effective Date, deliver such Note to the Administrative Agent and the Borrower
shall issue and deliver to the Administrative Agent, for the account of each
such Lender, a new Note in the principal amount of the respective Commitment of
such
- 18 -
Lender set forth in Schedule 2.1. Upon receipt of such new Note(s) the
------------
Administrative Agent shall deliver the Note(s) issued by the Borrower in
connection with the Original Credit Agreement to the Borrower for cancellation.
The termination of the Interest Periods and repayment of the Original Loans
shall not be subject to Section 3.4, provided such occurs on December 12, 1996.
-----------
Lenders which are not Original Credit Agreement Banks shall have no right to any
payment of principal or interest on the Original Loans.
ARTICLE II.
AMOUNT AND TERMS OF COMMITMENT
SECTION 2.1. Revolving Loan Commitment. Upon and subject to the terms
-------------------------
and conditions hereof, each of the Lenders severally and for itself agrees to
make revolving loans to the Borrower (collectively called the "Loans" and
individually called a "Loan") from time to time on any Business Day during the
period from the Amendment Effective Date to the Commitment Termination Date, in
an aggregate amount not to exceed at any time outstanding the amount set forth
on Schedule 2.1 (such amount as the same may be adjusted under Section 2.2 or as
------------ -----------
a result of one or more assignments under Section 10.8, the Lender's
------------
"Commitment"); provided, however, that, after giving effect to any Borrowing,
---------- -------- -------
the aggregate principal amount of all outstanding Loans shall not at any time
exceed the combined Commitments. Within the limits of each Lender's Commitment,
and subject to the other terms and conditions hereof, the Borrower may borrow
under this Section 2.1, prepay under Section 2.6 and reborrow under this
----------- -----------
Section 2.1.
- -----------
SECTION 2.2. Termination or Reduction of Commitments. (a) The
---------------------------------------
Borrower may, upon not less than five Business Days' prior notice to the
Administrative Agent, terminate the Commitments, or permanently reduce the
Commitments by an aggregate minimum amount of $5,000,000 or any multiple of
$500,000 in excess thereof; unless, after giving effect thereto and to any
------
prepayments of Loans to be made on the effective date thereof, the
then-outstanding principal amount of the Loans would exceed the amount of the
combined Commitments then in effect. Once reduced in accordance with this
Section, the Commitments may not be increased. Any reduction of the Commitments
shall be applied to each Lender according to its Pro Rata Share.
(b) Mandatory Commitment Reduction. On each date a payment is required
------------------------------
pursuant to Section 2.6(d), the Commitments shall, without any further action,
-------------
automatically and permanently be reduced by the amount of such required payment.
SECTION 2.3. Loan Accounts. (a) The Loans made by each Lender shall be
-------------
evidenced by one or more loan accounts or records maintained by such Lender in
the ordinary course of business. The loan accounts or records maintained by each
Lender
- 19 -
shall be conclusive, absent manifest error, of the amount of the Loans made by
such Lender to the Borrower and the interest and payments thereon. Any failure
so to record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Loans.
(b) Upon the written request of any Lender made through the
Administrative Agent, the Loans made by such Lender may be evidenced by one or
more Notes, instead of loan accounts. Each such Lender shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan made
by it and the date and amount of each payment of principal made by the Borrower
with respect thereto. Each such Lender is irrevocably authorized by the Borrower
to endorse its Note(s) and each such Lender's Note shall be conclusive, absent
manifest error; provided, however, that the failure of a Lender to make, or an
-------- -------
error in making, a notation thereon with respect to any Loan shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any such
Note to such Lender.
SECTION 2.4. Procedure for Borrowing. (a) Each Borrowing shall
-----------------------
be made upon the Borrower's irrevocable written notice delivered to the
Administrative Agent in the form of a Notice of Borrowing (which notice must be
received by the Administrative Agent prior to 9:00 a.m. (San Francisco time) (x)
three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans; and (y) one Business Day prior to the requested Borrowing
Date, in the case of Base Rate Loans, specifying:
(i) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $5,000,000 or any multiple of $500,000 in excess thereof;
(ii) the requested Borrowing Date, which shall be a Business Day;
(iii) the Type of Loans comprising the Borrowing; and
(iv) the duration of the Interest Period applicable to any
Offshore Loans included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period shall be three months.
provided, however, that with respect to the Borrowing of Offshore Rate Loans to
- -------- -------
be made on the Amendment Effective Date, the Notice of Borrowing shall be
delivered to the Administrative Agent not later than 2:00 p.m. (San Francisco
time) three (3) Business Days before the Amendment Effective Date.
- 20 -
(b) The Administrative Agent will promptly notify each Lender of its
receipt of any Notice of Borrowing and of the amount of such Lender's Pro Rata
Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of
each Borrowing available to the Administrative Agent for the account of the
Borrower at the Administrative Agent's Payment Office by 10:00 a.m. (San
Francisco time) on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. The proceeds of all such
Loans will then be made available to the Borrower by the Administrative Agent by
wire transfer in accordance with written instructions provided to the
Administrative Agent by the Borrower of like funds as received by the
Administrative Agent.
(d) After giving effect to any Borrowing, there may not be more than
five (5) different Interest Periods in effect.
SECTION 2.5. Conversion and Continuation Elections. (a) The Borrower
-------------------------------------
may, upon irrevocable written notice to the Administrative Agent in
accordance with Section 2.5(b):
-------------
(i) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of any
other Type of Loans, to convert any such Loans (or any part thereof in an
amount not less than $5,000,000, or that is in an integral multiple of
$500,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $500,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
- --------
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/Continuation to
be received by the Administrative Agent not later than 9:00 a.m. (San Francisco
time) at least (x) three Business Days in advance of the Conversion/Continuation
Date, if the Loans are to be converted into or continued as Offshore Rate Loans;
and (y) one Business Day in advance of the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(i) the proposed Conversion/Continuation Date;
- 21 -
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the Type of Loans resulting from the proposed conversion or
continuation; and
(iv) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, as the case may be, or if
any Default or Event of Default then exists, the Borrower shall be deemed to
have elected to convert such Offshore Rate Loans into Base Rate Loans effective
as of the expiration date of such Interest Period.
(d) The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the Borrower, the Administrative Agent will promptly notify each
Lender of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) After giving effect to any conversion or continuation of Loans,
there may not be more than five (5) different Interest Periods in effect.
SECTION 2.6. Repayments. (a) Subject to Section 3.4, the Borrower may,
---------- -----------
at any time or from time to time, upon not less than three (3) Business Days'
irrevocable notice to the Administrative Agent, ratably prepay Loans in whole or
in part, in minimum amounts of $1,000,000 or any multiple of $500,000 in excess
thereof. Such notice of prepayment shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will
promptly notify each Lender of its receipt of any such notice, and of such
Lender's Pro Rata Share of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with, in the case of prepayment of Offshore Rate Loans, accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to Section 3.4.
-----------
(b) If at any time the aggregate outstanding principal amount of the
Loans shall exceed the Commitment Amount in effect at such time, the Borrower
shall make a principal repayment of the Loans in an amount equal to such excess.
- 22 -
(c) The Borrower shall, immediately upon any acceleration of the
maturity date of the Loans pursuant to Section 7.2, repay the Loans.
-----------
(d) Within one Business Day after the Borrower receives any
Net Debt Proceeds or any Net Securities Proceeds, the Borrower shall repay the
Loans in an amount equal to 30% of such Net Debt Proceeds or Net Securities
Proceeds, as the case may be, unless such payment has been previously waived in
writing by the Required Lenders. The Commitment shall be reduced dollar by
dollar for any payment made pursuant to this Section 2.6(d).
--------------
(e) The Borrower shall repay to the Lenders on the Commitment
Termination Date the aggregate principal amount of Loans outstanding on such
date.
SECTION 2.7. Interest. (a) Each Loan shall bear interest on the
--------
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to, the Offshore Rate or the Base Rate, as the case may be
(and subject to the Borrower's right to convert to other Types of Loans under
Section 2.5), plus the Applicable Margin.
- ----------- ----
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Offshore Rate Loans under Section 2.6 for the portion of the Loans so prepaid
-----------
and upon payment (including prepayment) in full thereof and, during the
existence of any Event of Default, interest shall be paid on demand of the
Administrative Agent at the request or with the consent of the Required Lenders.
(c) Any change in the Applicable Margin or Applicable Non-Use
Fee Rate resulting from a change in the S & P Claims Rating shall be effective
as of the effective date of the change in the S & P Claims Rating. The Borrower
agrees promptly upon any change in the S & P Claims Rating to inform the Agent
thereof.
(d) Notwithstanding clause (a) of this Section, after acceleration or,
----------
at the election of the Required Lenders while any Event of Default exists, the
Borrower shall pay interest (after as well as before entry of judgment thereon
to the extent permitted by law) on the principal amount of all outstanding
Obligations, at a rate per annum which is determined by adding 3% per annum to
the Applicable Margin then in effect for such Loans and, in the case of
Obligations not subject to an interest rate, at a rate per annum equal to the
Base Rate plus 3%; provided, however, that, on and after the expiration of any
-------- -------
Interest Period applicable to any Offshore Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base Rate plus 3%.
- 23 -
(e) Anything herein to the contrary notwithstanding, the obligations
of the Borrower to any Lender hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Lender would be contrary to the provisions of
any law applicable to such Lender limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Lender, and in such
event the Borrower shall pay such Lender interest at the highest rate permitted
by applicable law.
SECTION 2.8. Fees. (a) Agency Fees. The Borrower shall pay fees to
---- -----------
the Administrative Agent for the Administrative Agent's own account, as required
by the letter agreement ("Fee Letter") between the Borrower and the
----------
Administrative Agent dated November 29, 1995 and as the Borrower and the
Administrative Agent may agree from time to time.
(b) Non-Use Fees. The Borrower shall pay to the Administrative Agent
------------
for the account of each Lender a non-use fee on the average daily unused portion
of such Lender's Commitment, computed on a quarterly basis in arrears on the
last Business Day of each calendar quarter based upon the daily utilization for
that quarter as calculated by the Administrative Agent, equal to the Applicable
Non-Use Fee Rate. Such non-use fee shall accrue from the Amendment Effective
Date to the Commitment Termination Date and shall be due and payable quarterly
in arrears on the last Business Day of each March, June, September and December
commencing on December 31, 1996 through the Commitment Termination Date, with
the final payment to be made on the Commitment Termination Date. The non-use
fees provided in this subsection shall accrue at all times after the above-
mentioned commencement date, including at any time during which one or more
conditions in Article VIII are not met. The non-use fee for the period prior to
------------
the Amendment Effective Date shall be due and payable pursuant to the terms of
the Original Credit Agreement.
SECTION 2.9. Computation of Fees and Interest. (a) All computations of
--------------------------------
fees and interest shall be made on the basis of a 360-day year and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof to the last
day thereof.
(b) Each determination of an interest rate by the Administrative Agent
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error.
SECTION 2.10. Payments by the Borrower. (a) All payments to be
------------------------
made by the Borrower shall be made without set-off, recoupment or counterclaim.
Except as otherwise expressly provided herein, all payments by the Borrower
shall be
- 24 -
made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in Dollars and in
immediately available funds, no later than 10:00 a.m. (San Francisco time) on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Administrative Agent later than 10:00 a.m. (San Francisco time) shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives notice from the Borrower
prior to the date on which any payment is due to the Lenders that the Borrower
will not make such payment in full as and when required, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower has not made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
SECTION 2.11. Payments by the Lenders to the Administrative Agent. (a)
---------------------------------------------------
Unless the Administrative Agent receives notice from a Lender on or prior to the
Amendment Effective Date or, with respect to any Borrowing after the Amendment
Effective Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Administrative Agent for the account of the Borrower the amount of that Lender's
Pro Rata Share of the Borrowing, the Administrative Agent may assume that each
Lender has made such amount available to the Administrative Agent in immediately
available funds on the Borrowing Date and the Administrative Agent may (but
shall not be so required), in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent any
Lender shall not have made its full amount available to the Administrative Agent
in immediately available funds and the Administrative Agent in such
circumstances has made available to the Borrower such amount, that Lender shall
on the Business Day following such Borrowing Date make such amount available to
the
- 25 -
Administrative Agent, together with interest at the Federal Funds Rate for each
day during such period. A notice of the Administrative Agent submitted to any
Lender with respect to amounts owing under this subsection (a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Administrative Agent shall constitute such Lender's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the Borrower of such
failure to fund and, upon demand by the Administrative Agent, the Borrower shall
pay such amount to the Administrative Agent for the Administrative Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.
SECTION 2.12. Sharing of Payments, Etc. If, other than as expressly
------------------------
provided elsewhere herein, any Lender shall obtain on account of the Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Pro Rata Share, such Lender
shall immediately (a) notify the Administrative Agent of such fact, and (b)
purchase from the other Lenders such participations in the Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
pro rata with each of them; provided, however, that if all or any portion of
-------- -------
such excess payment is thereafter recovered from the purchasing Lender, such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 10.10) with
-------------
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. The Administrative
Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case notify the Lenders following any such purchases or repayments.
- 26 -
SECTION 2.13. Termination Date Extension. (a) The Borrower
--------------------------
may, by notice to the Administrative Agent given not more than 90 days and not
less than 60 days prior to December 1, 1997 and/or December 1, 1998 (the
"Extension Request Date"), request that the Lenders extend the Commitment
----------------------
Termination Date for one year after the then scheduled Commitment Termination
Date. The Administrative Agent shall notify the Lenders of its receipt of any
notice given pursuant to this Section 2.13(a) within two Business Days after the
---------------
Administrative Agent's receipt thereof. Each Lender (a "Consenting Lender") may,
-----------------
by irrevocable notice to the Borrower and the Administrative Agent delivered to
the Borrower and the Administrative Agent not later than 45 days after the
Extension Request Date (the "Consent Period"), consent to such extension of the
--------------
Commitment Termination Date, which consent may be given or withheld by each
Lender in its absolute and sole discretion. Subject to Section 2.13(c), any such
---------------
extension shall take effect on and as of such December 1.
(b) Withdrawing Lenders. No extension pursuant to Section
------------------- -------
2.13(a) shall be effective with respect to a Lender that either (i) by a notice
- -------
(a "Withdrawal Notice") delivered to the Borrower and the Administrative Agent,
-----------------
declines to consent to such extension or (ii) has failed to respond to the
Borrower and the Administrative Agent within the Consent Period (each such
Lender giving a Withdrawal Notice or failing to respond in a timely manner being
"Withdrawing Lender").
------------------
(c) Replacement of Withdrawing Lender. The Borrower shall have
---------------------------------
the right during the 60 day period following the end of the Consent Period to
replace the Withdrawing Lender with an existing Lender or a new Lender who
consents to the extension of the Commitment Termination Date (a "Replacement
-----------
Lender"). In the event the Borrower has not replaced the Withdrawing Lender
- ------
within said 60 day period, the Termination Date shall not be extended.
(d) Assignment by Withdrawing Lender. A Withdrawing Lender
--------------------------------
shall be obliged, at the request of the Borrower and subject to the Withdrawing
Lender receiving payment in full of all amounts owing to it under this Agreement
concurrently with the effectiveness of an assignment, to assign, without
recourse or warranty and by an Assignment and Acceptance, all of its rights and
obligations hereunder to any Replacement Lender nominated by the Borrower and
willing to accept such assignment; provided that such assignee satisfies all the
--------
requirements of this Agreement and such assignment is consented to by the
Administrative Agent, which consent shall not be withheld or delayed
unreasonably.
(e) Scheduled Commitment Termination Date. If the scheduled
-------------------------------------
Commitment Termination Date shall have been extended in respect of Consenting
Lenders and any Replacement Lender in accordance with Section 2.13(a), all
---------------
references herein and in any Note to the "Commitment Termination Date" shall
refer to the Commitment Termination Date as so extended.
- 27 -
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.1. Taxes. (a) Any and all payments by the Borrower
-----
to each Lender or the Administrative Agent under this Agreement and any other
Loan Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Lender and the Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by the Lender or the Administrative Agent and
any liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this indemnification
shall be made within 30 days after the date the Lender or the Administrative
Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section) such Lender or the Administrative Agent, as the case may
be, receives an amount equal to the sum it would have received had no
such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Borrower shall also pay, without duplication, to each
Lender or the Administrative Agent for the account of such Lender, at
the time interest is paid, all additional amounts which the respective
Lender specifies as necessary to preserve the after-tax yield the
Lender would have received if such Taxes or Other Taxes had not been
imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to the Administrative Agent.
- 28 -
(e) If the Borrower is required to pay additional amounts to
any Lender or the Administrative Agent pursuant to Section 3.1(c), then such
--------------
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender or inconsistent with such Lender's internal
policies.
SECTION 3.2. Illegality. (a) If any Lender determines that the
----------
introduction of any Requirement of Law, or any change in any Requirement of Law,
or in the interpretation or administration of any Requirement of Law, has made
it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by the Lender to the Borrower
through the Administrative Agent, any obligation of that Lender to make Offshore
Rate Loans shall be suspended until the Lender notifies the Administrative Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist.
(b) If a Lender determines that it is unlawful to maintain
any Offshore Rate Loan, the Borrower shall, upon its receipt of notice of such
fact and demand from such Lender (with a copy to the Administrative Agent),
prepay in full such Offshore Rate Loans of that Lender then outstanding,
together with interest accrued thereon and amounts required under Section 3.4,
-----------
either on the last day of the Interest Period thereof, if the Lender may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such Offshore
Rate Loan. If the Borrower is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, the Borrower shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Lender to make or maintain
Offshore Rate Loans has been so terminated or suspended, the Borrower may elect,
by giving notice to the Lender through the Administrative Agent that all Loans
which would otherwise be made by the Lender as Offshore Rate Loans shall be
instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent under
this Section, the affected Lender shall designate a different Lending Office
with respect to its Offshore Rate Loans if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment of
the Lender, be illegal or otherwise disadvantageous to the Lender or
inconsistent with such Lender's internal policies.
SECTION 3.3. Increased Costs and Reduction of Return. (a) If
----------------------------------------
any Lender determines that, due to either (i) the
- 29 -
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the Offshore
Rate) in or in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any Offshore Rate Loans, then the Borrower shall be
liable for, and shall from time to time, upon demand (with a copy of such demand
to be sent to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs; provided that the Borrower shall not be
obligated to pay any additional amounts which were incurred by such Lender more
than 90 days prior to the date of such request.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Lender (or its Lending Office) or any corporation controlling
the Lender with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by the Lender or any
corporation controlling the Lender and (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines that the amount of such capital
is increased or its rate of return is decreased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Administrative Agent, the
Borrower shall pay to the Lender, from time to time as specified by the Lender,
additional amounts sufficient to compensate the Lender for such increase;
provided that the Borrower shall not be obligated to pay any additional amounts
which were incurred by such Lender more than 90 days prior to the date of such
request.
SECTION 3.4. Funding Losses. The Borrower shall reimburse each
---------------
Lender and hold each Lender harmless from any loss or expense which the Lender
may sustain or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert
a Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation that includes an Offshore Rate
Loan;
- 30 -
(c) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section 2.6;
-----------
(d) the prepayment (including pursuant to Section 2.6) or
-----------
other payment (including after acceleration thereof) of an Offshore Rate Loan on
a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.5 of any Offshore
-----------
Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Borrower to the Lenders under this Section
and under Section 3.3(a), each Offshore Rate Loan made by a Lender (and each
--------------
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
SECTION 3.5. Inability to Determine Rates. If the
-----------------------------
Administrative Agent determines that for any reason adequate and reasonable
means do not exist for determining the Offshore Rate for any requested Interest
Period with respect to a proposed Offshore Rate Loan, or the Administrative
Agent determines (or the Required Lenders advise the Administrative Agent) that
the Offshore Rate applicable pursuant to Section 2.7(a) for any requested
--------------
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Offshore Rate
Loans, as the case may be, hereunder shall be suspended until the Administrative
Agent revokes such notice in writing. Upon receipt of such notice, the Borrower
may revoke any Notice of Borrowing or Notice of Conversion/ Continuation then
submitted by it. If the Borrower does not revoke such Notice, the Lenders shall
make, convert or continue the Loans, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower, but such Loans
shall be made, converted or continued as Base Rate Loans instead of Offshore
Rate Loans.
SECTION 3.6. Certificates of Lenders. Any Lender claiming
------------------------
reimbursement or compensation under this Article III shall deliver to the
-----------
Borrower (with a copy to the Administrative Agent) a certificate setting forth
in reasonable detail the amount payable to the Lender hereunder and such
certificate shall
- 31 -
be conclusive and binding on the Borrower in the absence of manifest error.
SECTION 3.7. Substitution of Lenders. Upon the receipt by the
------------------------
Borrower from any Lender (an "Affected Lender") of a claim for compensation
---------------
under Section 3.1, 3.2 or 3.3 the Borrower may: (i) request the Affected Lender
----------- --- ---
to use its reasonable efforts to obtain a replacement bank or financial
institution satisfactory to the Borrower to acquire and assume all or a ratable
part of all of such Affected Lender's Loans and Commitment (a "Substitute
----------
Lender"); (ii) request one more of the other Lenders to acquire and assume all
- ------
or part of such Affected Lender's Loans and Commitment; or (iii) designate a
Substitute Lender. Any such designation of a Substitute Lender under clause (i)
or (iii) shall be subject to the prior written consent of the Administrative
Agent (which consent shall not be unreasonably withheld).
SECTION 3.8. Survival. The agreements and obligations of the
--------
Borrower in this Article III shall survive the payment of all other Obligations.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make
Loans hereunder, the Borrower represents and warrants to each Lender that:
SECTION 4.1. Due Organization, Authorization, etc. Each of the
-------------------------------------
Borrower and each Subsidiary (a) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, (b) is duly qualified to do business and in good standing in each
jurisdiction where, because of the nature of its activities or properties, such
qualification is required except where the failure to qualify would not have a
Material Adverse Effect, which jurisdictions are set forth with respect to the
Borrower and each Subsidiary on Schedule 4.1 as revised from time to time by the
------------
Borrower pursuant to Section 5.1(l), (c) has the requisite corporate power and
--------------
authority and the right to own and operate its properties, to lease the property
it operates under lease, and to conduct its business as now and proposed to be
conducted, and (d) has obtained all material licenses, permits, consents or
approvals from or by, and has made all filings with, and given all notices to,
all Governmental Authorities having jurisdiction, to the extent required for
such ownership, operation and conduct (including, without limitation, the
consummation of the transactions contemplated by this Agreement) as to each of
the foregoing, except where the failure to do so would not have a Material
Adverse Effect. The execution, delivery and performance by the Borrower of this
Agreement and the consummation of the transactions contemplated hereby and
thereby are within its
- 32 -
corporate powers and have been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval, if required). Each of the
Borrower and its Subsidiaries has received all other material consents and
approvals (if any shall be required) necessary for such execution, delivery and
performance, and such execution, delivery and performance do not and will not
contravene or conflict with, or create a Lien or right of termination or
acceleration under, any Requirement of Law or Contractual Obligation binding
upon the Borrower or such Subsidiaries. This Agreement and each of the Loan
Documents is (or when executed and delivered will be) the legal, valid, and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its respective terms; provided that the Borrower assumes for
purposes of this Section 4.1 that this Agreement and the other Loan Documents
-----------
have been validly executed and delivered by each of the parties thereto other
than the Borrower.
SECTION 4.2. Statutory Financial Statements. (a) The Annual
------------------------------
Statement of each of the Insurance Subsidiaries (including, without limitation,
the provisions made therein for investments and the valuation thereof, reserves,
policy and contract claims and statutory liabilities) as filed with the
appropriate Governmental Authority of its jurisdiction of domicile (the
"Department") and delivered to each Lender prior to the execution and delivery
----------
of this Agreement, as of and for the 1995 Fiscal Year, (the "Statutory Financial
-------------------
Statements"), have been prepared in accordance with SAP applied on a consistent
- ----------
basis (except as noted therein). Each such Statutory Financial Statement was in
compliance with applicable law when filed. The Statutory Financial Statements
fairly present the financial position, the results of operations and changes in
equity of each such Insurance Subsidiary as of and for the respective dates and
periods indicated therein in accordance with SAP applied on a consistent basis,
except as set forth in the notes thereto or on Schedule 4.2(a). Except for
---------------
liabilities and obligations, including, without limitation, reserves, policy and
contract claims and statutory liabilities (all of which have been computed in
accordance with SAP), disclosed or provided for in the Statutory Financial
Statements, the Insurance Subsidiaries did not have, as of the respective dates
of each of such financial statements, any liabilities or obligations (whether
absolute or contingent and whether due or to become due) which, in conformity
with SAP, applied on a consistent basis, would have been required to be or
should be disclosed or provided for in such financial statements. All books of
account of each of the Insurance Subsidiaries fully and fairly disclose all of
the transactions, properties, assets, investments, liabilities and obligations
of such Insurance Subsidiary and all of such books of account are in the
possession of each such Insurance Subsidiary and are true, correct and complete
in all material respects.
(b) Except as set forth on Schedule 4.2(b), there has been
---------------
no change in the business, assets, operations or financial
- 33 -
condition of the Borrower or any Subsidiary which has had or could reasonably be
expected to have a Material Adverse Effect since December 31, 1995.
SECTION 4.3. GAAP Financial Statements. (a) The audited
-------------------------
consolidated financial statements of the Borrower and its Subsidiaries for the
Fiscal Year ending December 31, 1995 and the unaudited consolidated financial
statements of the Borrower and its Subsidiaries for the nine months ended
September 30, 1996 which have been delivered to the Lenders (i) are true and
correct in all material respects, (ii) have been prepared in accordance with
GAAP (except as disclosed therein and, in the case of interim financial
statements, for the absence of footnote disclosures and normal year-end
adjustments) and (iii) present fairly the consolidated financial condition of
the Borrower and its Subsidiaries at such dates, the results of their operations
for the periods then ended and the investments and reserves for the periods then
ended.
(b) With respect to any representation and warranty which
is deemed to be made after the date hereof by the Borrower, the balance sheet
and statements of operations, of shareholders' equity and of cash flow, which as
of such date shall most recently have been furnished by or on behalf of the
Borrower to each Lender for the purposes of or in connection with this Agreement
or any transaction contemplated hereby, shall have been prepared in accordance
with GAAP consistently applied (except as disclosed therein and, in the case of
interim financial statements, for the absence of footnote disclosures), and
shall present fairly the consolidated financial condition of the corporations
covered thereby as at the dates thereof for the periods then ended, subject, in
the case of quarterly financial statements, to normal year-end audit
adjustments.
SECTION 4.4. Litigation and Contingent Liabilities.
-------------------------------------
(a) Except as set forth (including estimates of the dollar
amounts involved) in Schedule 4.4 hereto and (b) except for claims which are
------------
covered by Insurance Policies, coverage for which has not been denied in
writing, or which relate to Primary Policies or Reinsurance Agreements issued by
the Borrower or its Insurance Subsidiaries or to which it is a party entered
into by the Borrower or its Insurance Subsidiaries in the ordinary course of
business (referred to herein as "Ordinary Course Litigation"), no claim,
--------------------------
litigation (including, without limitation, derivative actions), arbitration,
governmental investigation or proceeding or inquiry is pending or threatened
against the Borrower or any of its Subsidiaries (i) which would, if adversely
determined, have a Material Adverse Effect or (ii) which relates to any of the
transactions contemplated hereby, and there is no basis known to the Borrower
for any of the foregoing. Other than any liability incident to such claims,
litigation or proceedings, the Borrower has no material Contingent Liabilities
not provided for
- 34 -
or referred to in the financial statements delivered pursuant to Section 4.3.
-----------
SECTION 4.5. Employee Benefit Plans. Set forth on Schedule
---------------------- --------
4.5 as revised from time to time by the Borrower pursuant to Section 5.1(l) is a
- --- --------------
list of all welfare plans and all pension plans, within the meaning of sections
3(1) and (2) of ERISA, respectively, which, to the knowledge of the Borrower,
are maintained with respect to employees of the Borrower or its Subsidiaries.
Also set forth in Schedule 4.5 as revised from time to time by the Borrower
------------
pursuant to Section 5.1(l) is a list of all Multiemployer Plans, all Welfare
--------------
Plans and all Plans which the Borrower has adopted or expects to adopt.
SECTION 4.6. Investment Company Act. Neither the Borrower nor
----------------------
any of its Subsidiaries is an "investment company" or a company "controlled by
an investment company," within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.7. Regulations G, U and X. Neither the Borrower nor
----------------------
any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock. None of the Borrower, any of its Subsidiaries, any
Affiliate of any of them or any Person acting on their behalf has taken or will
take action to cause the execution, delivery or performance of this Agreement,
the making or existence of the Loans or the use of proceeds of the Loans to
violate Regulations G, U or X of the FRB.
SECTION 4.8. Proceeds. The proceeds of the Loans will be used
--------
for general corporate purposes (including capital contributions to Subsidiaries
and acquisitions permitted under Section 6.3). None of such proceeds will be
-----------
used in violation of applicable law, and none of such proceeds will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any margin stock as defined in Regulation U of
the FRB.
SECTION 4.9. Insurance. Schedule 4.9 as revised from time to
--------- ------------
time by the Borrower pursuant to Section 5.1(l) sets forth a true and correct
--------------
summary of all Insurance Policies. No notice of any pending or threatened
cancellation or premium increase has been received by the Borrower or its
Subsidiaries with respect to any such Insurance Policies. The Borrower and its
Subsidiaries are in substantial compliance with all material conditions
contained in such Insurance Policies.
SECTION 4.10. Ownership of Properties. On the date of any
-----------------------
Loan, the Borrower and its Subsidiaries will have good title to all of their
respective material properties and assets, real and personal, of any nature
whatsoever.
- 35 -
SECTION 4.11. Business Locations. Schedule 4.11 as revised
------------------ -------------
from time to time by the Borrower pursuant to Section 5.1(l) lists each of the
--------------
locations where the Borrower maintains an office, a place of business or any
records.
SECTION 4.12. Accuracy of Information. All factual written
-----------------------
information furnished heretofore or contemporaneously herewith by or on behalf
of the Borrower or any of its Subsidiaries to the Administrative Agent or the
Lenders for purposes of or in connection with this Agreement or any of the
transactions contemplated hereby, as supplemented to the date hereof, is and all
other such factual written information hereafter furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Administrative Agent or the
Lenders will be, true and accurate in every material respect on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information not misleading.
SECTION 4.13. Subsidiaries. Schedule 4.13 as updated from
------------ --------------
time to time pursuant to Section 5.1(l) contains a complete list of the
--------------
Borrower's Subsidiaries.
SECTION 4.14. Insurance Licenses. Schedule 4.14 as revised
------------------ -------------
from time to time by the Borrower pursuant to Section 5.1(l) lists all of the
--------------
jurisdictions in which any of the Insurance Subsidiaries hold licenses
(including, without limitation, licenses or certificates of authority from
applicable insurance departments), permits or authorizations to transact
insurance and reinsurance business (collectively, the "Licenses"). Except as set
--------
forth on Schedule 4.14, to the best of the Borrower's knowledge, no such License
-------------
is the subject of a proceeding for suspension or revocation or any similar
proceedings, there is no sustainable basis for such a suspension or revocation,
and no such suspension or revocation is threatened by the Department. Schedule
--------
4.14 as revised from time to time by the Borrower pursuant to Section 5.1(l)
- ---- --------------
indicates the line or lines of insurance which each such Insurance Subsidiary is
permitted to be engaged in with respect to each License therein listed. The
Insurance Subsidiaries do not transact any insurance business, directly or
indirectly, in any jurisdiction other than those enumerated on Schedule 4.14 as
-------------
revised from time to time by the Borrower pursuant to Section 5.1(l) hereto,
--------------
where such business requires that any such Insurance Subsidiary obtain any
license, permit, governmental approval, consent or other authorization.
SECTION 4.15. Taxes. The Borrower and each of its
-----
Subsidiaries has filed all tax returns that are required to be filed by it, and
has paid or provided adequate reserves for the payment of all material taxes,
including, without limitation, all payroll taxes and federal and state
withholding taxes, and all assessments payable by it that have become due, other
than (a) those that are not yet delinquent or that are disclosed on
- 36 -
Schedule 4.15 and are being contested in good faith by appropriate proceedings
- -------------
and with respect to which reserves have been established, and are being
maintained, in accordance with GAAP or (b) those which the failure to file or
pay would not have a Material Adverse Effect. Except as set forth in Schedule
--------
4.15, on the Amendment Effective Date there is no ongoing audit or, to the
- ----
Borrower's knowledge, other governmental investigation of the tax liability of
the Borrower or any of its Subsidiaries and there is no unresolved claim by a
taxing authority concerning the Borrower's or any such Subsidiary's tax
liability, for any period for which returns have been filed or were due. As used
in this Section 4.15, the term "taxes" includes all taxes of any nature
------------
whatsoever and however denominated, including, without limitation, excise,
import, governmental fees, duties and all other charges, as well as additions to
tax, penalties and interest thereon, imposed by any government or
instrumentality, whether federal, state, local, foreign or other.
SECTION 4.16. Securities Laws. Neither the Borrower nor any
--------------
Affiliate, nor anyone acting on behalf of any such Person, has directly or
indirectly offered any interest in the Loans or any other Obligation for sale
to, or solicited any offer to acquire any such interest from, or has sold any
such interest to any Person that would subject the issuance or sale of the Loans
or any other liability to registration under the Securities Act of 1933, as
amended.
SECTION 4.17. Compliance with Laws. Neither the Borrower nor
--------------------
any of its Subsidiaries is in violation of any law, ordinance, rule, regulation,
order, policy, guideline or other requirement of any Governmental Authority, if
the effect of such violation could reasonably be expected to have a Material
Adverse Effect on the Borrower, or on the Borrower and its Subsidiaries taken as
a whole and, to the best of the Borrower's knowledge, no such violation has been
alleged and each of the Borrower and its Subsidiaries (i) has filed in a timely
manner all reports, documents and other materials required to be filed by it
with any Governmental Authority, if such failure to so file could reasonably be
expected to have a Material Adverse Effect; and the information contained in
each of such filings is true, correct and complete in all material respects and
(ii) has retained all records and documents required to be retained by it
pursuant to any law, ordinance, rule, regulation, order, policy, guideline or
other requirement of any Governmental Authority, if the failure to so retain
such records and documents could reasonably be expected to have a Material
Adverse Effect.
ARTICLE V.
AFFIRMATIVE COVENANTS
Until the Loans and all other Obligations are paid in full,
and until the Commitment Termination Date, the Borrower
- 37 -
agrees that, unless at any time the Required Lenders shall otherwise expressly
consent in writing, it will:
SECTION 5.1. Reports, Certificates and Other Information. Furnish or cause
-------------------------------------------
to be furnished to the Administrative Agent and the Lenders:
(a) GAAP Financial Statements:
-------------------------
(i) Within 50 days after the close of each of the first three
Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the
unaudited consolidated balance sheets of the Borrower and its
Subsidiaries, as of the close of such quarter and the related
consolidated statements of income and cash flows for that portion of
the Fiscal Year ending as of the close of such Fiscal Quarter, all
prepared in accordance with GAAP (subject to normal year-end
adjustments and except that footnote and schedule disclosure may be
abbreviated) and accompanied by the certification of the chief
executive officer, chief financial officer or treasurer of the Borrower
that all such financial statements are complete and correct and present
fairly in accordance with GAAP (subject to normal year-end adjustments)
the consolidated results of operations and cash flows of the Borrower
as at the end of such Fiscal Quarter and for the period then ended.
(ii) Within 95 days after the close of each Fiscal Year, a
copy of the annual audited consolidated financial statements of the
Borrower and its Subsidiaries, consisting of consolidated balance
sheets and consolidated statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the
consolidated figures for the previous Fiscal Year, which financial
statements shall be prepared in accordance with GAAP, certified without
material qualification by the independent certified public accountants
regularly retained by the Borrower, or any other firm of independent
certified public accountants of recognized national standing selected
by the Borrower and reasonably acceptable to the Required Lenders that
all such financial statements are complete and correct and present
fairly in accordance with GAAP the consolidated financial position and
the consolidated results of operations and cash flows of the Borrower
and its Subsidiaries as at the end of such year and for the period then
ended.
(b) Tax Returns. If requested by the Administrative Agent,
-----------
copies of all federal, state, local and foreign tax returns and reports in
respect of income, franchise or other taxes on or measured by income (excluding
sales, use or like taxes) filed by the Borrower or any of its Subsidiaries.
- 38 -
(c) SAP Financial Statements. Within (i) 5 days after the date
------------------------
filed with the Minister for each of its Fiscal Years, but in any event within
125 days after the end of each Fiscal Year of each Insurance Subsidiary a copy
of the Annual Statement of each Insurance Subsidiary for such Fiscal Year and
(ii) 5 days after the date filed with any Department for each of its Fiscal
Quarters, but in any event within 60 days after the end of each Fiscal Quarter
of each Insurance Subsidiary a copy of the Quarterly Statement of each Insurance
Subsidiary for such Fiscal Quarter, if any, required by such Department to be
filed, each of which statements delivered pursuant to clause (i) or (ii) to be
prepared in accordance with SAP and accompanied by the certification of the
chief financial officer or chief executive officer of each Insurance Subsidiary
that such financial statement is complete and correct and presents fairly in
accordance with SAP the financial position of such Insurance Subsidiary for the
period then ended.
(d) Notice of Default, etc. Immediately after an Executive
----------------------
Officer of the Borrower knows or has reason to know of the existence of any
Default, or any development or other information which would have a Material
Adverse Effect, telephonic or telegraphic notice specifying the nature of such
Default or development or information, including the anticipated effect thereof,
which notice shall be promptly confirmed in writing within two (2) Business
Days.
(e) Other Information. The following certificates and other
-----------------
information related to the Borrower:
(i) Promptly after completion of each such item but in no
event later than the fifteenth day of February of each Fiscal Year of
the Borrower, a copy of the Borrower's business plan.
(ii) Within five (5) Business Days of receipt, a copy of any
financial examination reports by a Governmental Authority with respect
to the Insurance Subsidiaries relating to the insurance business of the
Insurance Subsidiaries (when, and if, prepared); provided, the Borrower
--------
shall only be required to deliver any interim report hereunder at such
time as Borrower has knowledge that a final report will not be issued
and delivered to the Administrative Agent within 90 days of any such
interim report.
(iii) Copies of all filings (other than nonmaterial tax
filings) with Governmental Authorities by the Borrower or any
Subsidiary not later than five (5) Business Days after such filings are
made, including, without limitation, filings which seek approval of
Governmental Authorities with respect to transactions between the
Borrower or such Subsidiary and its Affiliates.
- 39 -
(iv) Within five (5) Business Days of such notice, notice of
proposed or actual suspension, termination or revocation of any
material License of the Insurance Subsidiaries by any Governmental
Authority or of receipt of notice from any Governmental Authority
notifying the Borrower of a hearing relating to such a suspension,
termination or revocation, including any request by a Governmental
Authority which commits the Borrower to take, or refrain from taking,
any action or which otherwise materially and adversely affects the
authority of the Borrower to conduct its business.
(v) Within five (5) Business Days of such notice, notice of
any pending or threatened investigation or regulatory proceeding (other
than routine periodic investigations or reviews) by any Governmental
Authority concerning the business, practices or operations of the
Borrower.
(vi) Simultaneously with delivery of the financial statements
provided pursuant to Section 5.1(a)(i), a list of all investments
-----------------
(including, without limitation, Permitted Investments) of the Borrower
and its Subsidiaries as of the end of such Fiscal Quarter.
(vii) Promptly, notice of any actual or, to the best of the
Borrower's knowledge, proposed material changes in the Insurance Code
governing the investment or dividend practices of any Insurance
Subsidiary.
(viii) Promptly, such additional financial and other
information as the Administrative Agent may from time to time
reasonably request.
(f) Compliance Certificates. Concurrently with the delivery to
-----------------------
the Administrative Agent of the GAAP financial statements under Sections
--------
5.1(a)(i) and 5.1(a)(ii), for each Fiscal Quarter and Fiscal Year of the
- --------- ----------
Borrower, and at any other time no later than thirty (30) Business Days
following a written request of the Administrative Agent, a duly completed
Compliance Certificate, signed by the chief financial officer or treasurer of
the Borrower, containing, among other things, a computation of, and showing
compliance with, each of the applicable financial ratios and restrictions
contained in Sections 6.1, 6.2 and 6.10, and to the effect that, to the best of
------------ --- ----
such officer's knowledge, as of such date no Default has occurred and is
continuing.
(g) Reports to SEC and to Shareholders. Promptly upon the
----------------------------------
filing or making thereof (i) copies of each filing and report made by the
Borrower or any of its Subsidiaries with or to any securities exchange or the
Securities and Exchange Commission and (ii) if the Borrower has issued stock in
a public offering, of each communication from the Borrower to shareholders
generally.
- 40 -
(h) Notice of Litigation, License and ERISA Matters. Promptly
-----------------------------------------------
upon learning of the occurrence of any of the following, written notice thereof,
describing the same and the steps being taken by the Borrower with respect
thereto: (i) the institution of, or any adverse determination in, any
litigation, arbitration proceeding or governmental proceeding (including any
Internal Revenue Service or Department of Labor proceeding with respect to any
Plan or Welfare Plan) which could, if adversely determined, be reasonably
expected to have a Material Adverse Effect and which is not Ordinary Course
Litigation, (ii) the failure of any Person in the Controlled Group to make a
required contribution to any Plan if such failure is sufficient to give rise to
a Lien under section 302(f)(1) of ERISA, (iii) the institution of any steps by
any entity in the Controlled Group to withdraw from, or the institution of any
steps by the Borrower or any other Person to terminate under a distress
termination, any Plan or the taking of any action with respect to a Plan which
could result in the requirement that the Borrower or any of its Subsidiaries
furnish a bond or other security to such Plan, or the occurrence of any event
with respect to any Plan which could result in the incurrence by the Borrower or
any of its Subsidiaries of any material liability (other than a liability for
contributions or premiums), fine or penalty, (iv) the commencement of any
dispute which might lead to the modification, transfer, revocation, suspension
or termination of this Agreement or any Loan Document or (v) any event which
could be reasonably expected to have a Material Adverse Effect.
(i) Insurance Reports. Within five (5) Business Days of
-----------------
receipt of such notice by the Borrower or its Subsidiaries, written notice of
any cancellation or material adverse change in any material Insurance Policy
carried by the Borrower or any of its Subsidiaries.
(j) List of Directors and Officers and Amendments.
---------------------------------------------
Concurrently with the delivery of the financial statements required pursuant to
Section 5.1(a)(i) and (ii), (x) a list of the Executive Officers and Directors
- ----------------- ----
of the Borrower and its Subsidiaries and (y) copies of any amendments to the
Organization Documents, Shareholders Agreement or Registration Rights Agreement
to the extent such information is not included in the information provided
pursuant to Section 5.1(g) and to the extent such information has changed since
the last delivery pursuant to this Section.
(k) Formation of Subsidiaries. Promptly upon formation of any
-------------------------
Subsidiary, written notice of the name, purpose and capitalization of such
Subsidiary.
(l) Updated Schedules. From time to time, and in any event
-----------------
concurrently with delivery of the financial statements under Section 5.1(a)(i)
-----------------
and (ii), revised Schedules 4.1, 4.5, 4.9, 4.11, 4.13 and 4.14, if applicable,
---- --- --- --- ---- ---- ----
showing changes from the Schedules previously delivered.
---------
- 41 -
(m) Other Information. From time to time such other
-----------------
information concerning the Borrower or any Subsidiary as the Administrative
Agent or any Lender may reasonably request.
SECTION 5.2. Corporate Existence; Foreign Qualification. Do
------------------------------------------
and cause to be done at all times all things necessary to (a) maintain and
preserve the corporate existence of the Borrower and each Subsidiary of the
Borrower (except that inactive Subsidiaries of the Borrower may be merged out of
existence or dissolved), (b) be, and ensure that each Subsidiary of the Borrower
is, duly qualified to do business and be in good standing as a foreign
corporation in each jurisdiction where the nature of its business makes such
qualification necessary unless the failure to be so qualified would not have a
Material Adverse Effect, and (c) do or cause to be done all things necessary to
preserve and keep in full force and effect the Borrower's corporate existence.
SECTION 5.3. Books, Records and Inspections. (a) Maintain, and
------------------------------
cause each of its Subsidiaries to maintain, materially complete and accurate
books and records in accordance with GAAP and SAP, (b) permit, and cause each of
its Subsidiaries to permit, access at reasonable times by the Administrative
Agent to its books and records, (c) permit, and cause each of its Subsidiaries
to permit, the Administrative Agent or its designated representative to inspect
at reasonable times its properties and operations, and (d) permit, and cause
each of its Subsidiaries to permit, the Administrative Agent to discuss its
business, operations and financial condition with its officers and its
independent accountants.
SECTION 5.4. Insurance. Maintain, and cause each of its
---------
Subsidiaries to maintain, Insurance Policies to such extent and against such
hazards and liabilities as is required by law or customarily maintained by
prudent companies similarly situated.
SECTION 5.5. Taxes and Liabilities. Pay, and cause each of
---------------------
its Subsidiaries to pay, when due all material taxes, assessments and other
material liabilities except as contested in good faith and by appropriate
proceedings with respect to which reserves have been established, and are being
maintained, in accordance with GAAP if and so long as such contest could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.6. Employee Benefit Plans. Maintain, and cause each
----------------------
of its Subsidiaries to maintain, each Plan and Welfare Plan in compliance in all
material respects with all applicable Requirements of Law.
SECTION 5.7. Compliance with Laws. Comply, and cause each of
--------------------
its Subsidiaries to comply, (a) with all federal and local laws, rules and
regulations related to its businesses (including, without limitation, the
establishment of all insurance reserves required to be established under SAP and
- 42 -
applicable laws restricting the investments of the Borrower), and (b) with all
Contractual Obligations binding upon such entity, except where failure to so
comply would not in the aggregate have a Material Adverse Effect on the
Borrower.
SECTION 5.8. Maintenance of Permits. Maintain, and cause each
----------------------
of its Subsidiaries to maintain, all permits, licenses and consents as may be
required for the conduct of its business by any federal or local government
agency or instrumentality except where failure to maintain the same could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.9. Investments. Cause the Invested Assets of the
-----------
Borrower and its Subsidiaries to be invested at all times so as to be in full
compliance with each of the following guidelines:
(i) All Invested Assets of each Insurance Subsidiary shall be
in compliance with the applicable Insurance Code; and
(ii) At least 95% of Invested Assets shall constitute
Permitted Investments.
Notwithstanding the foregoing, to the extent that non-compliance with this
Section 5.9 results from a change in an investment's rating by the National
- -----------
Association of Insurance Commissioners or a rating agency, no Default shall be
deemed to occur as a result thereof so long as such investments constitute less
than 10% of the Invested Assets.
SECTION 5.10. Conduct of Business. Engage, and cause each
-------------------
Subsidiary to engage, primarily in the same business in which the Borrower and
its Subsidiaries are engaged on the date hereof (including, without limitation,
making no major changes in its business lines, geographic exposures, retention
levels or attachment points).
ARTICLE IV.
NEGATIVE COVENANTS
Until the Loans and all other Obligations are paid in full and until
the Commitment Termination Date, the Borrower agrees that, unless at any time
the Required Lenders shall otherwise expressly consent in writing, it will:
SECTION 6.1. Debt to Capital Ratio. Not permit the Debt to
---------------------
Capital Ratio to exceed .35:1, except to the extent that Net Worth has declined
solely as a result of operating losses or unrealized losses on the Invested
Assets in accordance with FAS No. 115, in which case the sole effect of such
failure under this Agreement shall be that the Borrower will not, and will not
- 43 -
permit any Subsidiary to, incur any additional Debt until such time as the
Borrower is in compliance with this Section 6.1.
-----------
SECTION 6.2. Net Worth. Not permit Net Worth to be less than
---------
125% of Consolidated Debt at any time.
SECTION 6.3. Mergers, Consolidations and Sales. Not, and not
---------------------------------
permit any of its Subsidiaries to, (a) merge or consolidate, or purchase or
otherwise acquire all or substantially all of the assets or stock of any class
of, or any partnership or joint venture interest in, any other Person (other
than a newly formed Subsidiary or the acquisition of a Subsidiary which complies
with clause (b)(ii) of this Section 6.3 or the acquisition of shares of a
-----------
Subsidiary held by minority shareholders), or (b) sell, transfer, convey or
lease all or any substantial part of its assets or sell or assign with or
without recourse any receivables, other than any sale, transfer, conveyance or
lease in the ordinary course of business except for (i) any such merger or
consolidation, sale, transfer, conveyance, lease or assignment of any wholly
owned Subsidiary into, with or to any other wholly owned Subsidiary and (ii)
purchases or acquisitions which comply with Section 5.10 provided (x) no Default
or Event of Default has occurred and is continuing or would result therefrom and
(y) the purchase price for any single purchase or acquisition does not exceed
25% of the Net Worth minus all amounts which in accordance with GAAP would be
-----
categorized as intangible assets (including goodwill) as of the date of such
purchase or acquisition and (z) the aggregate purchase price of all purchases
and acquisitions after the Closing Date do not exceed 100% of Net Worth minus
-----
all amounts which in accordance with GAAP would be categorized as intangible
assets (including goodwill).
SECTION 6.4. Regulations G, U and X. Not, and not permit any
----------------------
of its Subsidiaries to, use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying margin stock, as defined in Regulation U of
the FRB except as permitted in Section 5.9.
-----------
SECTION 6.5. Other Agreements. Not, and not permit any of its
----------------
Subsidiaries to, enter into any agreement containing any provision which would
be violated or breached by the performance of obligations hereunder or under any
instrument or document delivered or to be delivered by it hereunder or in
connection herewith.
SECTION 6.6. Transactions with Affiliates. Not, and not
----------------------------
permit any Subsidiary to, enter into, or cause, suffer or permit to exist,
directly or indirectly, any arrangement, transaction or contract with any of its
Affiliates unless such arrangement, transaction or contract is on an arm's
length basis; provided that (a) transactions between the Borrower and any
--------
wholly-owned Subsidiary of the Borrower or between any wholly-
- 44 -
owned Subsidiaries of the Borrower, (b) any restructuring of the Borrower's
existing capital structure in which only equity securities are issued and (c)
any transaction expressly contemplated by the Shareholders Agreement or the
Registration Rights Agreement, shall be excluded from the restrictions set forth
in this Section 6.6.
-----------
SECTION 6.7. Liens. Not, and not permit any of its
-----
Subsidiaries to, create or permit to exist any Lien with respect to any assets
now or hereafter existing or acquired, except the following: (i) Liens for
current taxes not delinquent or for taxes being contested in good faith and by
appropriate proceedings and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP, (ii) Liens
arising (x) in the ordinary course of business or (y) by operation of law for
sums being contested in good faith and by appropriate proceedings and in the
case of either clause (x) or (y) with respect to which adequate reserves have
--------- ---
been established, and are being maintained, in accordance with GAAP, or for sums
not due, and in either case not involving any deposits or advances for borrowed
money or the deferred purchase price of property or services, (iii) Liens in
connection with the acquisition of fixed assets after the date hereof and
attaching only to the property being acquired, (iv) Liens incurred in the
ordinary course of business in connection with workers' compensation,
unemployment insurance or other forms of governmental insurance or benefits, (v)
mechanics', workers', materialmen's and other like Liens arising in the ordinary
course of business in respect of obligations which are not delinquent or which
are being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (vi) liens on Invested Assets pursuant to
trust, letter of credit or other security arrangements in connection with
Reinsurance Agreements or Primary Policies and (vii) Liens listed on Schedule
--------
6.7 in effect on the date hereof; provided, however, that, no Lien shall be
- --- -------- -------
permitted to exist on the shares of stock of any Insurance Subsidiary.
SECTION 6.8. Restrictions On Negative Pledge Agreements. Not,
------------------------------------------
and not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any agreement, other than this Agreement which places any restrictions
upon the right of the Borrower or any of its Subsidiaries to sell, pledge or
otherwise dispose of any material portion of its properties now owned or
thereafter acquired other than as permitted herein, except for such restrictions
imposed by (a) federal or state laws upon the right of the Borrower or any of
its Subsidiaries to sell, pledge or otherwise dispose of securities owned by it
or (b) the Shareholders Agreement, the Registration Rights Agreement or
Organization Documents as in effect on the Amendment Effective Date.
- 45 -
SECTION 6.9. No Amendment of Certain Documents. Not enter into
---------------------------------
or permit to exist any amendment, modification or waiver of the Shareholders
Agreement, the Registration Rights Agreement or Organization Documents as in
effect on the Amendment Effective Date which would (a) create or amend
redemption provisions applicable to the Borrower's capital stock which provides
for redemption prior to the Commitment Termination Date as such Date may be
extended or (b) in any manner be materially adverse to the interests of the
Lenders.
SECTION 6.10. Dividends, Etc. Not, and not permit its Subsidiaries to,
--------------
(a) declare or pay any dividends on any of its capital stock (other than pro
rata payments of dividends by a Subsidiary to the Borrower and such Subsidiary's
other shareholders), (b) purchase or redeem any capital stock of the Borrower or
any Subsidiary or any warrants, options or other rights in respect of such stock
(other than the pro rata purchase or redemption by a Subsidiary of its capital
stock, warrants, options or other rights in respect of such stock), (c) pay
interest or principal on any Debt owed to any Founding Shareholder, or (d) set
aside funds for any of the foregoing (collectively "Restricted Payments");
-------------------
except that (i) the Borrower may declare or pay dividends on any of its Common
Shares in an amount not to exceed $7,000,000 in any Fiscal Quarter provided no
Default or Event of Default has occurred and is continuing on the date the
Borrower declares such dividend, (ii) the Borrower may declare or pay any
Restricted Payment described in clauses (a) or (b) above provided (x) no Default
---------- -
or Event of Default has occurred and is continuing on the date of such
declaration or payment and (y) except in the case of the purchase of shares of a
Subsidiary from minority shareholders of such Subsidiary, after giving effect to
such Restricted Payment, the Borrower's Net Worth exceeds $300,000,000 and (iii)
any Insurance Subsidiary may pay any Restricted Payment described in clause (b)
---------
above on a non prorata basis provided no Default or Event of Default has
occurred and is continuing on the date of such payment.
ARTICLE VII.
EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 7.1. Events of Default. Each of the following shall constitute
-----------------
an Event of Default under this Agreement:
(a) Non-Payment of Loan. Default in the payment when due of any
-------------------
principal on the Loans.
(b) Non-Payment of Interest, Fees, etc. Default, and continuance
----------------------------------
thereof for three (3) Business Days, in the payment when due of interest on the
Loans, fees or of any other amount payable hereunder or under the Loan
Documents.
- 46 -
(c) Non-Payment of Other Debt. (i) Default in the payment when due
-------------------------
(subject to any applicable grace period), whether by acceleration or otherwise,
of any other Debt of, or guaranteed by, the Borrower or any of its Subsidiaries
if the aggregate amount of Debt of the Borrower and/or any of its Subsidiaries
which is accelerated or due and payable, or which (subject to any applicable
grace period) may be accelerated or otherwise become due and payable, by reason
of such default or defaults is $5,000,000 or more, or (ii) default in the
performance or observance of any obligation or condition with respect to any
such other Debt of, or guaranteed by, the Borrower and/or any of its
Subsidiaries if the effect of such default or defaults is to accelerate the
maturity (subject to any applicable grace period) of any such Debt of $5,000,000
or more in the aggregate or to permit the holder or holders of such Debt of
$5,000,000 or more in the aggregate, or any trustee or agent for such holders,
to cause such Debt to become due and payable prior to its expressed maturity.
(d) Other Material Obligations. Except for obligations covered
--------------------------
under other provisions of this Article VII, default in the payment when due, or
-----------
in the performance or observance of, any material obligation of, or material
condition agreed to by, the Borrower or any of its Subsidiaries with respect to
any material purchase or lease obligation (unless the existence of any such
default is being contested by the Borrower in good faith and by appropriate
proceedings and the Borrower has established, and is maintaining, adequate
reserves therefor in accordance with GAAP) which default continues for a period
of 30 days.
(e) Bankruptcy, Insolvency, etc. (i) The Borrower or any Insurance
---------------------------
Subsidiary becomes insolvent or generally fails to pay, or admits in writing its
inability to pay, debts as they become due; (ii) there shall be commenced by or
against the Borrower or any Insurance Subsidiary any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, supervision, conservatorship,
liquidation, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, rehabilitation, conservation, supervision,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, obligations or liabilities, or (B)
seeking appointment of a receiver, trustee, custodian, rehabilitator,
conservator, supervisor, liquidator or other similar official for it or for all
or any substantial part of its assets, in each case which (1) results in the
entry of an order for relief or any such adjudication or appointment or (2) if
filed against such Person, remains undismissed, undischarged or unstayed for a
period of 60 days; or (iii) there shall be commenced against any of such
Subsidiaries any case, proceeding or other action seeking issuance of a warrant
of attachment,
- 47 -
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) any of such Persons shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause(ii) or (iii) above; or (v)
--------- -----
any Governmental Authority shall issue any order of conservation, supervision or
any other order of like effect relating to any of such Persons.
(f) Non-compliance With Certain Financial Covenants. Failure by the
-----------------------------------------------
Borrower to comply with its covenants set forth in Section 6.2 and continuance
-----------
of such failure for thirty days after the date the Borrower became aware of such
non-compliance unless (a) such failure is cured by a capital contribution or a
permanent reduction of Debt made during such thirty days, and (b) if the
Borrower's capital has fallen below that required under any Requirement of Law
(x) during such cure period no Governmental Authority places restrictions on the
Borrower or any Insurance Subsidiary or requires the Borrower or any Insurance
Subsidiary to take any action beyond the normal reporting requirements and (y)
after such cure the Borrower and its Insurance Subsidiaries are in compliance
with all Requirements of Law.
(g) Non-compliance With Other Financial Conditions. Failure by the
----------------------------------------------
Borrower to comply with its covenants set forth in Section 6.1, 6.8, 6.9, or
----------- --- ---
6.10.
- ----
(h) Non-compliance With Other Provisions. Failure by the Borrower to
------------------------------------
comply with or to perform any provision of this Agreement or the other Loan
Documents (and not constituting an Event of Default under any of the other
provisions of this Article VII) and continuance of such failure for 30 days
-----------
after notice thereof from the Administrative Agent to the Borrower.
(i) Warranties and Representations. Any warranty or representation
------------------------------
made by or on behalf of the Borrower or any Subsidiary herein is inaccurate or
incorrect or is breached or false or misleading in any material respect as of
the date such warranty or representation is made; or any schedule, certificate,
financial statement, report, notice, or other instrument furnished by or on
behalf of Borrower or any Subsidiary to the Administrative Agent or the Lenders
is false or misleading in any material respect on the date as of which the facts
therein set forth are stated or certified.
(j) Employee Benefit Plans. A contribution failure occurs with
----------------------
respect to any Plan sufficient to give rise to a Lien against the Borrower or
any of its Subsidiaries under section 302(f)(1) of ERISA (as in effect on the
Closing Date); or withdrawal by one or more companies in the Controlled Group
from one or more Multiemployer Plans to which it or they have an
- 48 -
obligation to contribute and the withdrawal liability (without unaccrued
interest) to multiemployer plans as a result of such withdrawal or withdrawals
(including any outstanding withdrawal liability that the Controlled Group has
incurred on the date of such withdrawal) is material.
(k) Loan Documents. Any action shall be taken by or on behalf of the
--------------
Borrower or any Affiliate thereof to discontinue any of the Loan Documents or to
contest the validity, binding nature or enforceability of any thereof.
(l) Change in Control. A Change in Control occurs.
-----------------
(m) Judgments. A final judgment or judgments which exceed an
---------
aggregate of $5,000,000 (excluding any portion thereof which is covered by
insurance so long as the insurer is reasonably likely to be able to pay and has
accepted a tender of defense and indemnification without reservation of rights)
shall be rendered against the Borrower or any Subsidiary and shall not have been
discharged or vacated or had execution thereof stayed pending appeal within 60
days after entry or filing of such judgment(s).
(n) Change in Law. Any change is made in the Insurance Code which
-------------
affects the dividend practices of any Insurance Subsidiary and which is
reasonably likely to have a Material Adverse Effect on the ability of the
Borrower to perform its obligations under the Agreement and such circumstances
shall continue for 120 days.
SECTION 7.2. Effect of Event of Default. If any Event of Default
--------------------------
described in Section 7.1(e) shall occur, the Loans and all other Obligations
--------------
shall become immediately due and payable, all without notice of any kind; and,
in the case of any other Event of Default, the Administrative Agent may, and
upon the written request of the Required Lenders shall, terminate the
Commitments hereunder and declare all or any portion of the Loans and all other
Obligations to be due and payable, whereupon the Commitments shall terminate and
all or such portion of the Loans and all other Obligations shall become
immediately due and payable, all without further notice of any kind. The
Administrative Agent shall promptly advise the Borrower of any such declaration
but failure to do so shall not impair the effect of such declaration.
Notwithstanding the foregoing, the effect as an Event of Default of any event
described in Section 7.1(a) may not be waived except by consent of all of the
--------------
Lenders and acknowledged by the Administrative Agent in writing.
- 49 -
ARTICLE VIII.
CONDITIONS
SECTION 8.1. Conditions to Occurrence of the Amendment Effective Date.
--------------------------------------------------------
The occurrence of the Amendment Effective Date shall be subject to receipt by
the Administrative Agent of all of the following, each duly executed and dated
the Amendment Effective Date (or such earlier date as shall be satisfactory to
the Administrative Agent), each in form and substance satisfactory to the
Administrative Agent (with sufficient copies for each Lender):
(a) This Agreement and Certain Related Documents. This Agreement and
--------------------------------------------
such other Loan Documents as are required to be delivered by the terms of this
Agreement.
(b) Resolutions. Certified copies of resolutions of the Board
-----------
of Directors of the Borrower authorizing the execution, delivery and
performance, respectively, of those documents and matters required of it with
respect to this Agreement or the other Loan Documents.
(c) Incumbency and Signatures. A certificate of an Authorized
-------------------------
Officer certifying the names of the individual or individuals authorized to sign
this Agreement and the other Loan Documents, together with a sample of the true
signature of each such individual. (The Lenders may conclusively rely on each
such certificate until formally advised by a like certificate of any changes
therein.)
(d) Opinion of Counsel. The opinions of counsel of the Borrower,
------------------
addressed to the Administrative Agent and the Lenders, in the form of Exhibit D.
---------
(e) Organization Documents, etc. A Certificate of an Authorized
---------------------------
Officer certifying true and correct copies of the Organization Documents, the
Shareholders Agreement and the Registration Rights Agreement.
(f) Insurance Proceedings. Certificate of an Authorized Officer that
---------------------
there are no material insurance regulatory proceedings pending or threatened
against the Borrower or any Insurance Subsidiary in any jurisdiction.
(g) Material Adverse Change Certificate. An officer's certificate,
-----------------------------------
signed by an Authorized Officer, certifying that to such officer's best
knowledge, since December 31, 1995, no event has occurred which individually or
in the aggregate could reasonably be expected to have a Material Adverse Effect.
(h) Other. Such other documents as the Administrative Agent may
-----
reasonably request.
- 50 -
SECTION 8.2. Conditions to All Borrowings. The obligation of the
----------------------------
Lenders to make all Loans shall be subject to the prior or concurrent
satisfaction (in form and substance satisfactory to the Administrative Agent) of
each of the conditions precedent set forth below:
(a) No Default. No Default shall have occurred and be continuing or
----------
will result from the making of the Loans and no Default shall have occurred and
be continuing under the Loan Documents or will result from the making of the
Loans.
(b) Warranties and Representations. (i) All warranties and
------------------------------
representations contained in this Agreement (other than Section 4.4 except in
-----------
the case of the initial Borrowing) shall be true and correct in all material
respects as of the date of any Loan, with the same effect as though made on the
date of and concurrently with the making of such Loan (except where such
representation speaks as of specified date) (ii) all covenants contained herein
and in such documents to be performed by each of the parties thereto (other than
the Administrative Agent or the Lenders) prior to the date of any Loan shall
have been performed and (iii) Net Worth shall equal at least $200,000,000.
(c) Litigation. (i) No litigation (including, without limitation,
----------
derivative actions), arbitration, governmental investigation or proceeding or
inquiry shall be, on the date of any Loan, pending, or to the knowledge of the
Borrower, threatened which seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or to obtain material relief as a result of, the
transactions contemplated hereunder or, in the reasonable opinion of the
Required Lenders, could be reasonably expected to be materially adverse to any
of the parties to this Agreement and which is not Ordinary Course Litigation,
and (ii) in the reasonable opinion of the Required Lenders, no material adverse
development shall have occurred in any litigation (including, without
limitation, derivative actions), arbitration, government investigation or
proceeding or inquiry disclosed in Schedule 4.4 which is likely to have a
------------
Material Adverse Effect.
(d) Fees. The fees referred to in Section 2.8 which are due and
---- -----------
payable on or prior to the Amendment Effective Date or the date of any Loan
shall have been paid to the Administrative Agent, where applicable, for the
benefit of the Lenders.
(e) Borrowing Request. The Administrative Agent shall have received a
-----------------
Borrowing Request in form and substance acceptable to the Administrative Agent.
- 51 -
ARTICLE IX.
THE ADMINISTRATIVE AGENT
SECTION 9.1. Appointment and Authorization. Each Lender hereby
-----------------------------
irrevocably (subject to Section 9.9) appoints, designates and authorizes the
-----------
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
SECTION 9.2. Delegation of Duties. The Administrative Agent may execute
--------------------
any of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
SECTION 9.3. Liability of Administrative Agent. None of the
---------------------------------
Agent-Related Persons shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any of
the Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Administrative
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
- 52 -
SECTION 9.4. Reliance by Administrative Agent. (a) The Administrative
--------------------------------
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 8.1, each Lender that has executed this Agreement shall be
-----------
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender.
SECTION 9.5. Notice of Default. The Administrative Agent shall not be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice from
a Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Lenders in accordance with
Article VII; provided, however, that unless and until the Administrative Agent
- ----------- -------- -------
has received any such request, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
- 53 -
SECTION 9.6. Credit Decision. Each Lender acknowledges that none of the
---------------
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Administrative Agent hereinafter taken, including any review of the
affairs of the Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of the Agent-Related Persons.
SECTION 9.7. Indemnification. Whether or not the transactions
---------------
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
-------- -------
that no Lender shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) 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, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive the
- 54 -
payment of all Obligations hereunder and the resignation or replacement of the
Administrative Agent.
SECTION 9.8. Administrative Agent in Individual Capacity. BofA and its
-------------------------------------------
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Subsidiaries and Affiliates as though BofA were not the
Administrative Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities, BofA or its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Subsidiary) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, BofA shall have the same rights and powers
under this Agreement as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and "Lenders" include
BofA in its individual capacity.
SECTION 9.9. Successor Administrative Agent. The Administrative Agent
------------------------------
may, and at the request of the Required Lenders shall, resign as Administrative
Agent upon 30 days' notice to the Lenders. If the Administrative Agent resigns
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor agent for the Lenders which successor agent shall be approved by the
Borrower. If no successor agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may appoint,
after consulting with the Lenders and the Borrower, a successor agent from among
the Lenders. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.4 and
---------- -------------
10.5 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. If no successor
agent has accepted appointment as Administrative Agent by the date which is 30
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.
SECTION 9.10. Withholding Tax. (a) If any Lender (other than a Lender
---------------
located in Bermuda) is a "foreign
- 55 -
corporation, partnership or trust" within the meaning of the Code and such
Lender claims exemption from, or a reduction of, U.S. withholding tax under
Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of the
Administrative Agent, to deliver to the Administrative Agent and the Borrower:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form 4224 before the payment
of any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid
under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Administrative Agent and the Borrower
of any change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Borrower to such Lender, such Lender agrees to notify the
Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrower to such Lender. To the extent of
such percentage amount, the Administrative Agent will treat such Lender's IRS
Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Administrative Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Administrative Agent may withhold
- 56 -
from any interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other
documentation required by subsection (a) of this Section are not delivered to
the Administrative Agent, then the Administrative Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Administrative Agent.
SECTION 9.11. Co-Agents. None of the Lenders identified on the facing
---------
page or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. Amendments and Waivers. No amendment or waiver of any
----------------------
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by the Required Lenders (or by the
Administrative Agent at the written request of the Required Lenders) and the
Borrower and acknowledged by the Administrative Agent, and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
-------- -------
consent shall, unless in writing and signed by all the Lenders
- 57 -
and the Borrower and acknowledged by the Administrative Agent, do any of the
following:
(a) increase or extend the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 7.2);
-----------
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder; or
(e) amend this Section, or Section 2.12, or any provision
herein providing for consent or other action by all Lenders;
and, provided further, that no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the Administrative Agent in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document.
SECTION 10.2. Notices. (a) All notices, requests and other
-------
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Borrower by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 10.2, and
-------------
(ii) except in the case of Notices of Borrowing and Notices of
Conversions/Continuation, shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 10.2; or, as directed to the Borrower
-------------
or the Administrative Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as directed to any
other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or, if delivered, upon delivery, except that notices
pursuant to Article II or IX shall not be effective until actually received by
---------- --
the Administrative Agent.
-58-
(c) Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent and the
Lenders shall be entitled to rely on the authority of any Person purporting to
be a Person authorized by the Borrower to give such notice and the
Administrative Agent and the Lenders shall not have any liability to the
Borrower or other Person on account of any action taken or not taken by the
Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans shall not be
affected in any way or to any extent by any failure by the Administrative Agent
and the Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent and the Lenders of a
confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.
SECTION 10.3. No Waiver; Cumulative Remedies. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
SECTION 10.4. Costs and Expenses. The Borrower shall:
------------------
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Administrative
Agent) within ten Business Days after demand for all costs and expenses incurred
by BofA (including in its capacity as Administrative Agent) in connection with
the development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
BofA (including in its capacity as Administrative Agent) with respect thereto;
and
(b) pay or reimburse the Administrative Agent and each Lender
within ten Business Days after demand for all costs and expenses (including
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
-59-
SECTION 10.5. Indemnity. Whether or not the transactions
---------
contemplated hereby are consummated, the Borrower shall indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
----------- ------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Administrative Agent or replacement of any Lender) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement
or the Loans or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
-----------
Liabilities"); provided, that the Borrower shall have no obligation hereunder to
- ----------- --------
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
SECTION 10.6. Payments Set Aside. To the extent that the
------------------
Borrower makes a payment to the Administrative Agent or the Lenders, or the
Administrative Agent or the Lenders exercise their right of set-off, and such
payment or the proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
pro rata share of any amount so recovered from or repaid by the Administrative
Agent.
SECTION 10.7. Successors and Assigns. The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and each Lender.
- 60 -
SECTION 10.8. Assignments, Participations, etc. (a) Any Lender
---------------------------------
may, with the written consent of the Borrower (at all times other than during
the existence of an Event of Default) and the Administrative Agent, which
consents shall not be unreasonably withheld, at any time assign and delegate to
one or more Eligible Assignees (provided that no written consent of the Borrower
or the Administrative Agent shall be required in connection with any assignment
and delegation by a Lender to an Eligible Assignee that is an Affiliate of such
Lender) (each an "Assignee") all, or any ratable part of all, of the Loans, the
--------
Commitments and the other rights and obligations of such Lender hereunder,
provided, however, that (x) the aggregate principal amount of the Commitment
- -------- -------
assigned by any Lender to someone other than another Lender shall be in a
minimum amount of $5,000,000 (or if less, the entire Commitment then held by
such Lender) and (y) after giving effect to any such assignment by a Lender, the
aggregate amount of the Commitments and/or Loans held by such assigning Lender
is at least $5,000,000 (unless such Lender has assigned the entire Commitment
and Loans then held by it). The Borrower and the Administrative Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrower and the
Administrative Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to the Borrower and the Administrative Agent an
Assignment and Acceptance in the form of Exhibit E ("Assignment and Acceptance")
---------- -------------------------
and (iii) the assignor Lender or Assignee has paid to the Administrative Agent a
processing fee in the amount of $3,000.
(b) From and after the date that the Administrative Agent
notifies the assignor Lender that it has received (and provided its consent with
respect to) an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents.
(c) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
--- -----
- 61 -
(d) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Borrower (a "Participant")
-----------
participating interests in any Loans, the Commitment of that Lender and the
other interests of that Lender (the "originating Lender") hereunder and under
------------------
the other Loan Documents; provided, however, that (i) the originating Lender's
-------- -------
obligations under this Agreement shall remain unchanged, (ii) the originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Borrower and the Administrative Agent shall continue to deal solely
and directly with the originating Lender in connection with the originating
Lender's rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Lender shall transfer or grant any participating interest
under which the Participant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other Loan Document,
except to the extent such amendment, consent or waiver would require unanimous
consent of the Lenders as described in the first proviso to Section 10.1. In the
----- ------- ------------
case of any such participation, the Participant shall be entitled to the benefit
of Sections 3.1, 3.3 and 10.5 to the extent the Lender selling such
------------ --- ----
participation would be so entitled as though it were also a Lender hereunder,
and if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Lender in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR (S).203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
SECTION 10.9. Confidentiality. Each Lender agrees to take and
---------------
to cause its Affiliates to take normal and reasonable precautions and exercise
due care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Borrower and provided to it by the Borrower or
any Subsidiary, or by the Administrative Agent on such Borrower's or
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Borrower or any Subsidiary; except to the extent such
information (i) was or becomes generally available to the public other than as a
result of disclosure by the Lender, or (ii) was
- 62 -
or becomes available on a non-confidential basis from a source other than the
Borrower, provided that such source is not bound by a confidentiality agreement
with the Borrower known to the Lender; provided, however, that any Lender may
-------- -------
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Lender is subject or in connection with
an examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the
Administrative Agent, any Lender or their respective Affiliates may be party;
(E) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors; (G) to any Participant or
Assignee, actual or potential, provided that such Person agrees in writing to
keep such information confidential to the same extent required of the Lenders
hereunder; (H) as to any Lender or its Affiliate, as expressly permitted under
the terms of any other document or agreement regarding confidentiality to which
the Borrower or any Subsidiary is party or is deemed party with such Lender or
such Affiliate; and (I) to its Affiliates which are either such Lender's parent
or it or its parent's wholly owned Subsidiary or, with the prior written consent
of the Borrower which shall not be unreasonably withheld, its other Affiliates.
SECTION 10.10. Set-off. In addition to any rights and remedies
-------
of the Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower 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 by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Lender shall have made demand under this Agreement
or any Loan Document and although such Obligations may be contingent or
unmatured. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
- -------- -------
validity of such set-off and application.
SECTION 10.11. Notification of Addresses, Lending Offices,
------------------------------------------
Etc. Each Lender shall notify the Administrative Agent in writing of any changes
- ---
in the address to which notices to the Lender should be directed, of addresses
of any Lending Office, of payment instructions in respect of all payments to be
made to it hereunder and of such other administrative information as the
Administrative Agent shall reasonably request.
- 63 -
SECTION 10.12. Counterparts. This Agreement may be executed in
------------
any number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.
SECTION 10.13. Severability. The illegality or
------------
unenforceability of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
SECTION 10.14. No Third Parties Benefited. This Agreement is
--------------------------
made and entered into for the sole protection and legal benefit of the Borrower,
the Lenders, the Administrative Agent and the Agent-Related Persons, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
SECTION 10.15. Governing Law and Jurisdiction. (a) THIS
------------------------------
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF ILLINOIS; PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID OR BY ANY OTHER MEANS PERMITTED BY ILLINOIS OR FEDERAL LAW.
SECTION 10.16. Waiver of Jury Trial. THE BORROWER, THE LENDERS
--------------------
AND THE ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH
-64-
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS
AND THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 10.17. Currency Indemnity. If, for the purposes of
------------------
obtaining judgment in any court in any jurisdiction with respect to any Loan
Document, it becomes necessary to convert into the currency of such jurisdiction
(the "Judgment Currency") any amount due under any Loan Document in any currency
-----------------
other than the Judgment Currency (the "Currency Due"), then conversion shall be
------------
made at the rate of exchange prevailing on the Business Day before the day on
which judgment is given. For this purpose, "rate of exchange" means the rate at
which the Administrative Agent is able, on the relevant date, to purchase the
Currency Due with the Judgment Currency in accordance with its normal practice
at its main branch in San Francisco, California. In the event that there is a
change in the rate of exchange prevailing between the Business Day before the
day on which the judgment is given and the date of payment of the amount due,
the Borrower will, on the day of payment, pay such additional amount, if any, or
be entitled to receive reimbursement of such amount, if any, as may be necessary
to ensure that the amount paid on such date is the amount in the Judgment
Currency which when converted at the rate of exchange prevailing on the date of
payment is the amount then due under any Loan Document in the Currency Due. If
the amount of the Currency Due which the Administrative Agent is so able to
purchase is less than the amount of the Currency Due originally due to it, the
Borrower shall indemnify and save the Administrative Agent harmless from and
against loss or damage arising as a result of such deficiency. This indemnity
shall constitute an obligation separate and independent from the other
obligations contained in any Loan Document, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by the Administrative Agent from time to time and shall continue in full force
and effect notwithstanding any judgment or order for a liquidated sum in respect
of an amount due under any Loan Document or under any judgment or order.
SECTION 10.18. Entire Agreement. This Agreement, together with
----------------
the other Loan Documents, embodies the entire agreement and understanding among
the Borrower, the Lenders and the Administrative Agent, and supersedes all prior
or contemporaneous agreements and understandings of such Persons,
-65-
verbal or written, relating to the subject matter hereof and thereof.
-66-
RENAISSANCERE HOLDINGS LTD.
By:
-------------------------------
Title:
----------------------------
S-1
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrative Agent
By:
-------------------------------
Title:
----------------------------
S-2
BANK OF AMERICA ILLINOIS
By:
-------------------------------
Title:
----------------------------
S-3
FLEET NATIONAL BANK, as Co-Agent
and as Lender
By:
-------------------------------
Title:
----------------------------
S-4
MELLON BANK, N.A., as Co-Agent and
as Lender
By:
-------------------------------
Title:
----------------------------
S-5
BANK OF MONTREAL
By:
-------------------------------
Title:
----------------------------
S-6
DEUTSCHE BANK AG, New York
and/or Cayman Islands Branch
By:
-------------------------------
Title:
----------------------------
S-7
BANK OF BERMUDA
By:
-------------------------------
Title:
----------------------------
S-8
THE BANK OF N.T. BUTTERFIELD & SON
LIMITED
By:
-------------------------------
Title:
----------------------------
S-9
SCHEDULE 4.2(a)
---------------
None
SCHEDULE 4.2(b)
---------------
None
SCHEDULE 4.4
------------
None
SCHEDULE 4.5
------------
Renaissance Reinsurance Ltd. Retirement Plan
SCHEDULE 4.11
-------------
Renaissance House
8-12 East Broadway
P.O. Box HM 2527
Hamilton HM GX
SCHEDULE 4.13
-------------
Renaissance Reinsurance Ltd.
Glencoe Insurance Ltd.
SCHEDULE 4.14
-------------
Bermuda licence for General Business Insurance
SCHEDULE 4.15
-------------
None
SCHEDULE 6.7
------------
Lien on a segregated portion of Renaissance Reinsurance Ltd.'s Invested Assets
for the benefit of Banks issuing Letters of Credit to Renaissance Reinsurance
Ltd.'s clients under Reinsurance Policies.
SCHEDULE 10.2
-------------
ADDRESSES
OFFSHORE AND DOMESTIC LENDING OFFICES,
- --------------------------------------
ADDRESSES FOR NOTICES
- ---------------------
BANK OF AMERICA NATIONAL TRUST
- ------------------------------
AND SAVINGS ASSOCIATION,
- -----------------------
as Administrative Agent
Bank of America National Trust
and Savings Association
231 S. La Salle Street
Chicago, IL 60697
Attention: Dawn Lenza
Telephone: (312) 828-4184
Facsimile: (312) 987-0889
BANK OF AMERICA ILLINOIS
- ------------------------
Domestic and Offshore Lending Office:
231 South LaSalle Street
Chicago, Illinois 60697
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Nita Savage
Telephone: (312) 828-4854
Facsimile: (312) 987-0889
FLEET NATIONAL BANK
- -------------------
Domestic and Offshore Lending Office:
777 Main Street, MSN 250
25th Floor
Hartford, Connecticut 06115
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Fleet National Bank
777 Main Street, MSN 250
Hartford, Connecticut 06115
Attention: Tom McKinlay
Telephone: (860) 986-4139
Facsimile: (860) 986-1264
MELLON BANK, N.A.
- -----------------
Domestic and Offshore Lending Office:
One Mellon Bank Center
#350
Pittsburgh, Pennsylvania 15258
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Mellon Bank, N.A.
One Mellon Bank Center
#350
Pittsburgh, Pennsylvania 15258
Attention: Bob Brandenstein
Telephone: (412) 234-1158
Facsimile: (412) 234-8087
THE BANK OF N.T. BUTTERFIELD & SON LIMITED
- ------------------------------------------
Domestic and Off-Shore Lending Office:
65 Front Street
Hamilton HM AX, Bermuda
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
The Bank of N.T. Butterfield & Son Limited
65 Front Street
Hamilton HM AX, Bermuda
Attention: Stuart Lee
Telephone: (441) 299-3453
Facsimile: (441) 299-9148
BANK OF MONTREAL
- ----------------
Domestic and Offshore Lending Office:
115 South LaSalle Street
Chicago, Illinois 60603
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Bruce Cox
Telephone: (312) 750-3891
Facsimile: (312) 750-4352
DEUTSCHE BANK AG, New York and/or Cayman Island Branch
- ----------------
Domestic and Off-Shore Lending Office:
31 West 52 Street
New York, New York 10019
Notices (other than Borrowing Notices and Notice of Conversion/Continuation):
31 West 52 Street
New York, New York 10019
Attention: Clinton M. Johnson
Telephone: (212) 469-8108
BANK OF BERMUDA
- ---------------
Domestic and Offshore Lending Office:
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
RENAISSANCERE HOLDINGS LTD.
- ---------------------------
Notices:
RenaissanceRe Holdings Ltd.
Renaissance House
8-12 East Broadway
Pembroke HM 19, Bermuda
Attention: Keith Hynes
Telephone: (441) 295-4513
Facsimile: (441) 292-9453
EXHIBIT A
NOTICE OF BORROWING
-------------------
Date: _______________________, 199
To: Bank of America National Trust and Savings Association as Administrative
Agent for the Lenders parties to the Third Amended and Restated Credit
Agreement dated as of ___________, 1996 (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among RenaissanceRe
----------------
Holdings Ltd., certain Lenders which are signatories thereto, Fleet
National Bank and Mellon Bank, N.A., as Co-Agents and Bank of America
National Trust and Savings Association, as Administrative Agent
Ladies and Gentlemen:
The undersigned, RenaissanceRe Holdings Ltd.(the "Borrower"), refers to the
--------
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.4 of the
Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
_________________________, 19__.
2. The aggregate amount of the proposed Borrowing is
$_____________.
3. The Borrowing is to be comprised of $_____________ of [Base
Rate] [Offshore Rate] Loans.
4. The duration of the Interest Period for the Offshore Rate Loans
included in the Borrowing shall be [_____ months].
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrower contained in
Article IV of the Credit Agreement (other than Section 4.4 except in the
case of the initial Borrowing) are true and correct as though made on and
as of such date (except to the extent such representations and warranties
relate to an earlier date, in which case they are true and correct as of
such date);
(b) no Default or Event of Default has occurred and is continuing,
or would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Loans to exceed the combined Commitments of the
Lenders.
RenaissanceRe Holdings, Ltd.
By:
-------------------------
Title:
----------------------
EXHIBIT B
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
Date: ________________, 199
To: Bank of America National Trust and Savings Association, as Administrative
Agent for the Lenders parties to the Third Amended and Restated Credit
Agreement dated as of __________, 1996 (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among RenaissanceRe
----------------
Holdings, Ltd., certain Lenders which are signatories thereto, Fleet
National Bank and Mellon Bank, N.A., as Co-Agents and Bank of America
National Trust and Savings Association, as Administrative Agent
Ladies and Gentlemen:
The undersigned, RenaissanceRe Holdings, Ltd. (the "Borrower"), refers to
--------
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.5 of the
Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The Conversion/Continuation Date is ___________________, 19__.
2. The aggregate amount of the Loans to be [converted] [continued]
is $______________.
3. The Loans are to be [converted into] [continued as] [Offshore Rate]
[Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be [____ days]
[____ months].
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed Conversion/Continuation Date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrower contained in
Article IV of the Credit Agreement (other than Section 4.4 except in the
case of the initial Borrowing) are true and correct as though made on and
as of such date (except to the extent such representations and warranties
relate to an earlier date, in which case they are true and correct as of
such date);
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation]; and
(c) the proposed [conversion][continuation] will not cause the
aggregate principal amount of all outstanding Loans to exceed the combined
Commitments of the Lenders.
RenaissanceRe Holdings, Ltd.
By:
-------------------------
Title:
----------------------
EXHIBIT C
RenaissanceRe Holdings Ltd.
COMPLIANCE CERTIFICATE
----------------------
Financial
Statement Date: _____________, 199
Reference is made to that certain Third Amended and Restated Credit
Agreement dated as of __________, 1996 (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among RenaissanceRe Holdings
----------------
Ltd., a Bermuda company (the "Borrower"), the several financial institutions
--------
from time to time parties to this Credit Agreement (the "Lenders"), Fleet
-------
National Bank and Mellon Bank, N.A., as Co-Agents and Bank of America National
Trust and Savings Association, as agent for the Lenders (in such capacity, the
"Administrative Agent"). Unless otherwise defined herein, capitalized terms used
--------------------
herein have the respective meanings assigned to them in the Credit Agreement.
The undersigned hereby certifies as of the date hereof that he/she is the
[chief executive officer] [chief financial officer] [treasurer] of the Borrower,
and that, as such, he/she is authorized to execute and deliver this Certificate
to the Lenders and the Administrative Agent on the behalf of the Borrower and
its consolidated Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
- --------------------------------------------------------------------------------
the financial statements required by Section 5.1(a)(ii) of the Credit Agreement.
- --------------------------------------------------------------------------------
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
----------
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of the Fiscal Year ended _______________, 199__ and
(b) the related consolidated statements of income and retained earnings and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of
________________ which report states that such consolidated financial statements
are complete and correct and have been prepared in accordance with GAAP, and
fairly present, in all material respects, the financial position of the Borrower
and its consolidated Subsidiaries for the periods indicated and on a basis
consistent with prior periods.
or
[Use the following paragraph if this Certificate is delivered in connection with
- --------------------------------------------------------------------------------
the financial statements required by subsection [5.1(a)(i)] of the Credit
- -------------------------------------------------------------------------
Agreement.]
- -----------
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
----------
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of the end of the
Fiscal Quarter ended __________, 199_, and (b) the related unaudited
consolidated statements of income, shareholders' equity, and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
and certified by [the chief financial officer] [treasurer] that such financial
statements were prepared in accordance with GAAP (subject only to ordinary, good
faith year-end audit adjustments and the absence of footnotes) and fairly
present, in all material respects, the financial position and the results of
operations of the Borrower and its consolidated Subsidiaries.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Borrower during the accounting period covered by the attached
financial statements.
3. To the best of the undersigned's knowledge, the Borrower, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Credit Agreement to be
observed, performed or satisfied by the Borrower, and the undersigned has no
knowledge of any Default or Event of Default.
4. The following financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
- ----------
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
___________________, 199_ .
RenaissanceRe Holdings Ltd.
By:
------------------------
Title:
---------------------
Schedule 2
----------
I. Section 6.1 - Debt to Capital Ratio.
-----------------------------------
A. Consolidated Debt $
----------
B. Net Worth $
----------
C. Items A plus B $
----------
D. Ratio of Item A to Item C :1
----------
[If Item D exceeds .35:1 a separate Schedule must be attached
setting forth the extent to which Net Worth has declined from
the previous Calculation Date due solely to operating losses
or unrealized losses on the investment portfolio in accordance
with FASB 115.]
II. Section 6.2 - Net Worth.
A. Net Worth (Item I.B.) $
----------
B. Consolidated Debt $
----------
C. Required Amount (125% of Item B) $
----------
III. Section 6.13 - Dividends Paid.
A. Net Worth (Item I.B.) (must exceed $300,000,000) $
----------
B. Dividends paid or capital
returned since last Compliance
Certificate $
----------
IV. Section 5.9 - Investments.
A. Total Investments $
----------
B. Permitted Investments $
----------
C. Item B divided by Item A %
----------
D. Required Percentage 95%
----------
[If Item C is less than 95%,
complete Items E-G]
E. Investments which ceased to be
Permitted Investments due to
change in ratings or notice
from Administrative Agent or
Required Lenders 90%
----------
F. Item B plus Item E $
----------
G. Item F divided by Item A %
-----------
H. Required Percentage 90%
-----------
The undersigned officer further certifies that, to the best of his/her
knowledge, no Default had occurred and was continuing as of the Calculation
Date.
RENAISSANCERE HOLDINGS LTD.
By
-------------------------
Title
----------------------
EXHIBIT D
---------
FORM OF OPINION OF BORROWER'S COUNSEL
__________, 1996
To: Bank of America National Trust and Savings Association, as
Administrative Agent, and
the Lenders referred to below
231 S. La Salle Street
Chicago, IL 60697
Re: RenaissanceRe Holdings Ltd.
--------------------------
Ladies and Gentlemen:
We have acted as Counsel to RenaissanceRe Holdings Ltd., a Bermuda
company (the "Borrower") in connection with that certain Third Amended and
Restated Credit Agreement dated as of __________, 1996 (the "Credit Agreement")
among the Borrower, various financial institutions which are, or may become,
parties thereto (the "Lenders"), Fleet National Bank and Mellon Bank, N.A., as
Co-Agents and Bank of America National Trust and Savings Association,
Administrative Agent for the Lenders (the "Administrative Agent").
This opinion is delivered to you pursuant to Section 8.1(d) of the
--------------
Credit Agreement. Capitalized terms not otherwise defined herein shall have the
definitions assigned to such terms in the Credit Agreement, unless the context
otherwise requires.
We have examined such matters of law and such certificates, documents
and records of public officials and of officers of the Borrower and its
Subsidiaries as we have deemed necessary for purposes of this opinion,
including, but not limited to, the Credit Agreement and the other Loan
Documents. As to questions of fact material to such opinions, we have relied on
certificates of officers of the Borrower and its Subsidiaries.
In rendering this opinion, we have made the following assumptions:
(a) All documents submitted to or reviewed by us are accurate and
complete and if not originals are true and correct copies of
the originals. The signatures on each of such documents by the
parties thereto (other than the Borrower) are genuine. Each
individual who signed such documents on behalf of any Person
(other than the Borrower) had the legal capacity to do so. All
individuals who signed such documents on behalf of a
corporation (other than the Borrower) were duly authorized to
do so.
(b) The Lenders and the Administrative Agent have the corporate power
and authority to execute and deliver the Credit Agreement and
other Loan Documents to which they are parties and to perform
their obligations under the Credit Agreement and the other Loan
Documents.
(c) The execution and delivery by the Administrative Agent and the
Lenders of the Credit Agreement and the other Loan Documents to
which they are parties have been duly authorized by all requisite
corporate action and such documents have been duly executed and
delivered by the Administrative Agent and the Lenders.
Based upon the foregoing and subject to the limitations, qualifications
and exceptions set forth herein, we are of opinion that:
1. Each of the Borrower and each Subsidiary (i) is a corporation
duly organized, validly existing and in good standing under the
laws of Bermuda, (ii) is duly qualified to do business and in
good standing in each jurisdiction where, because of the nature
of its activities or properties, such qualification is required,
which jurisdictions are set forth with respect to the Borrower
and each Subsidiary on Schedule 4.1 of the Credit Agreement,
------------
(iii) has the requisite corporate power and authority and the
right to own and operate its properties, to lease the
property it operate under lease, and to conduct its business as
now and proposed to be conducted and (iv) has obtained all
material licenses, permits, consents or approvals from or by, and
has made all filings with, and given all notices to, all
Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct (including,
without limitation, the consummation of the transactions
contemplated by the Credit Agreement and the other Loan
Documents) as to each of the foregoing except where the failure
to do so would not have a Material Adverse Effect on the Borrower
and its Subsidiaries taken as a whole.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the consummation of the transactions
contemplated thereby are within its corporate powers and have
been duly authorized by all necessary corporate action
(including, without limitation, shareholder approval, if
required).
3. The Borrower has received all governmental and other consents and
approvals (if any shall be required) necessary for the execution,
delivery and performance of the Credit Agreement and the other
Loan Documents, and such execution, delivery and performance do
not and
will not contravene or conflict with, or create a Lien or
right of termination or acceleration under, its Organization
Documents or the Shareholders' Agreement or any Requirement of
Law or Contractual Obligation binding upon the Borrower or its
Subsidiaries.
4. The Credit Agreement and the other Loan Documents to which it is
a party have been executed by the Borrower and constitute the
legal, binding and enforceable obligations of Borrower
enforceable against the Borrower in accordance with their
respective terms.
5. Neither the Borrower nor any of its Subsidiaries is an
"investment company" or a company "controlled by an investment
company", within the meaning of the Investment Company Act of
1940, as amended.
6. Except as set forth in Schedule 4.5 of the Credit Agreement, no
------------
claim, litigation (including, without limitation, derivative
actions), arbitration, governmental investigation or proceeding
or inquiry is pending or threatened against the Borrower or any
of its Subsidiaries (i) which would, if adversely determined,
have a Material Adverse Effect on the Borrower or its
Subsidiaries taken as a whole or (ii) which relates to any of the
transactions contemplated hereby, and there is no basis known for
any of the foregoing.
7. No recording, filing, privilege or other tax must be paid in
connection with, or as a result, the execution, delivery or
enforcement of the Credit Agreement and the other Loan Documents.
8. Neither the Administrative Agent nor any Lender will be required
to qualify to do business in Bermuda in order to exercise its
rights under the Credit Agreement and the other Loan Documents.
9. The choice of the laws of the State of Illinois to govern the
Credit Agreement and the other Loan Documents is valid under the
laws of Bermuda and will be given effect in any proceeding
brought against the Borrower in a Bermuda court.
10. Any judgment against the Borrower for a fixed sum of money
obtained with respect to the Credit Agreement and the other Loan
Documents will be recognized by and will be permitted to be
enforced against the Borrower in an action brought against the
Borrower in a Bermuda court.
The opinions expressed herein are limited (i) to the extent that
general equitable principles limit the availability of equitable remedies,
including but not limited to the remedy of
specific performance, injunctive relief, the appointment of a receiver, and
rights of acceleration; and (ii) to the extent that the enforceability of the
Credit Agreement and the other Loan Documents is limited by applicable
bankruptcy, insolvency, and other debtor relief laws of general applicability.
This opinion is based on my knowledge of the law and facts as of the
date hereof. I assume no duty to update or supplement this opinion to reflect
any facts or circumstances which may hereafter come to my attention or to
reflect any changes in any law which may hereafter occur or become effective.
Respectfully submitted,
EXHIBIT E
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
---------------------------------------------
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
--------------
Acceptance") dated as of __________, 199__ is made between
- ----------
______________________________ (the "Assignor") and __________________________
--------
(the "Assignee").
--------
RECITALS
--------
WHEREAS, the Assignor is party to that certain Third Amended
and Restated Credit Agreement dated as of __________, 1996 (as amended, amended
and restated, modified, supplemented or renewed, the "Credit Agreement") among
----------------
RenaissanceRe Holdings Ltd., a Bermuda company (the "Borrower"), the several
--------
financial institutions from time to time party thereto (including the Assignor,
the "Lenders"), Fleet National Bank and Mellon Bank, N.A., as Co-Agents and Bank
-------
of America National Trust and Savings Association, as agent for the Lenders (the
"Administrative Agent"). Any terms defined in the Credit Agreement and not
--------------------
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor
has committed to making Loans (the "Committed Loans") to the Borrower in an
---------------
aggregate amount not to exceed $__________ (the "Commitment");
----------
WHEREAS, [the Assignor has made Committed Loans in the
aggregate principal amount of $__________ to the Borrower] [no Committed Loans
are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part
of the] [all] rights and obligations of the Assignor under the Credit Agreement
in respect of its Commitment, [together with a corresponding portion of each of
its outstanding Committed Loans,] in an amount equal to $__________ (the
"Assigned Amount") on the terms and subject to the conditions set forth herein
---------------
and the Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
-------------------------
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except
as provided in this Assignment and Acceptance) __% (the "Assignee's Percentage
---------------------
Share") of (A) the Commitment and the Committed Loans of the Assignor and (B)
- -----
all related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender. It is the
intent of the parties hereto that the Commitment of the Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections 10.4 and 10.5 of the Credit Agreement to the extent such rights relate
to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's Commitment will be
$__________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's Commitment will be
$__________.
2. Payments.
--------
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the
Administrative Agent a processing fee in the amount specified in Section 10.8(a)
of the Credit Agreement.
3. Reallocation of Payments.
------------------------
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment, and Committed Loans shall be for the account of
the Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision.
---------------------------
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 5.16 of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, 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 and legal decisions in taking or not
taking action under the Credit Agreement.
5. Effective Date; Notices.
-----------------------
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________, 199__ (the
"Effective Date"); provided that the following conditions precedent have been
-------------- --------
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Borrower and the Administrative
Agent required for an effective assignment of the Assigned Amount by the
Assignor to the Assignee under Section 10.8(a) of the Credit Agreement
shall have been duly obtained and shall be in full force and effect as of
the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof
and in Section 10.8(a) of the Credit Agreement shall have been paid to the
Administrative Agent; and
(v) the Assignor shall have assigned and the Assignee shall
have assumed a percentage equal to the Assignee's Percentage Share of the
rights and obligations of the Assignor under the Credit Agreement (if such
agreement exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Administrative
Agent for acknowledgement by the
Administrative Agent, a Notice of Assignment in the form attached hereto as
Schedule 1.
- ----------
[6. Administrative Agent. [INCLUDE ONLY IF ASSIGNOR IS
--------------------
ADMINISTRATIVE AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Administrative Agent by the Lenders
pursuant to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Administrative Agent under the Credit
Agreement.]
7. Withholding Tax.
---------------
The Assignee (a) represents and warrants to the Lender, the
Administrative Agent and the Borrower that under applicable law and treaties no
tax will be required to be withheld by the Lender with respect to any payments
to be made to the Assignee hereunder, (b) agrees to furnish (if it is organized
under the laws of any jurisdiction other than the United States or any State
thereof) to the Administrative Agent and the Borrower prior to the time that the
Administrative Agent or Borrower is required to make any payment of principal,
interest or fees hereunder, duplicate executed originals of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
the Assignee claims entitlement to the benefits of a tax treaty that provides
for a complete exemption from U.S. federal income withholding tax on all
payments hereunder) and agrees to provide new Forms 4224 or 1001 upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by the Assignee, and (c) agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. Representations and Warranties.
------------------------------
(a) The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to take,
and has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any
agreements or undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; and (iv) this Assignment and
Acceptance has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignor, enforceable against the Assignor
in accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Borrower, or the performance or observance by the Borrower,
of any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances.
------------------
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or
instruments to the Borrower or the Administrative Agent, which may be required
in connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
-------------
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-
off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. The Assignor and
the Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in Illinois over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Illinois State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the
--------------------------------------------------------------
Assignor and the Assignee, provided that such provisions are not inconsistent
- -----------------------------------------------------------------------------
with the Credit Agreement.]
- ---------------------------
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
------------------------------
Title:
---------------------------
By:
------------------------------
Title:
---------------------------
Address: [ASSIGNEE]
By:
------------------------------
Title:
---------------------------
By:
------------------------------
Title:
---------------------------
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
-----------------------------------
_______________, 19__
Bank of America National Trust
and Savings Association, as Administrative Agent
231 S. La Salle St.
Chicago, IL 60697
[Name and Address of Borrower]
Ladies and Gentlemen:
We refer to the Third Amended and Restated Credit Agreement dated as of
__________, 1996 (as amended, amended and restated, modified, supplemented or
renewed from time to time the "Credit Agreement") among RenaissanceRe Holdings
----------------
Ltd. (the "Borrower"), the Lenders referred to therein, Fleet National Bank and
--------
Mellon Bank, N.A., as Co-Agents and Bank of America National Trust and Savings
Association as agent for the Lenders (the "Administrative Agent"). Terms defined
--------------------
in the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor[,] [and] all
outstanding Loans made by the Assignor) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). Before
giving effect to such assignment the Assignor's Commitment is $ ___________[,]
[and] the aggregate amount of its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of the
Administrative Agent and, if applicable, RenaissanceRe Holdings Ltd. to such
assignment, the Assignee will be bound by the terms of the Credit Agreement as
fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
--------------------------
Address:
-------------------------------
-------------------------------
-------------------------------
Attention:
-----------------------------
Telephone: ( )
--- -----------------------
Telecopier: ( )
--- ----------------------
Telex (Answerback):
--------------------
(B) Payment Instructions:
Account No.:
---------------------------
At:
---------------------------
---------------------------
---------------------------
Reference:
---------------------------
Attention:
---------------------------
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
---------------------------
Title:
-------------------------
By:
---------------------------
Title:
-------------------------
[NAME OF ASSIGNEE]
By:
---------------------------
Title:
-------------------------
By:
---------------------------
Title:
-------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
RENAISSANCERE HOLDINGS LTD.
By:
-----------------------------
Title:
--------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By:
------------------------------
Its:
-----------------------------
EXHIBIT F
---------
[FORM OF] PROMISSORY NOTE
-------------------------
$_____________ ________, 199_
FOR VALUE RECEIVED, the undersigned, RenaissanceRe Holdings
Ltd., a Bermuda company (the "Company"), hereby promises to pay to the order of
-------
________________. (the "Lender") the principal sum of _______________ Dollars
------
($__________) or, if less, the aggregate unpaid principal amount of all Loans
made by the Lender to the Borrower pursuant to the Third Amended and Restated
Credit Agreement, dated as of __________, 1996 (such Credit Agreement, as it may
be amended, restated, supplemented or otherwise modified from time to time,
being hereinafter called the "Credit Agreement"), among the Company, the Lender,
----------------
the other banks parties thereto, Fleet National Bank and Mellon Bank N.A., as
Co-Agents, Bank of America National Trust and Savings Association, as
Administrative Agent for the Lenders, on the dates and in the amounts provided
in the Credit Agreement. The Borrower further promises to pay interest on the
unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
The Lender is authorized to endorse the amount and the date on
which each Loan is made, the maturity date therefor and each payment of
principal with respect thereto on the schedules annexed hereto and made a part
hereof, or on continuations thereof which shall be attached hereto and made a
part hereof; provided, that any failure to endorse such information on such
schedule or continuation thereof shall not in any manner affect any obligation
of the Company under the Credit Agreement and this Promissory Note (the "Note").
----
This Note is one of the Notes referred to in, and is entitled
to the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. Terms defined in the Credit Agreement are used herein with
their defined meanings therein unless otherwise defined herein. This Note shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of Illinois applicable to contracts made and to be performed entirely
within such State.
RENAISSANCERE HOLDINGS LTD.
By:
------------------------
Title:
---------------------
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
------------------------------------------------
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
--------------------------------------------------------
1. To be executed by the chief financial officer or treasurer of the Borrower.