EXHIBIT 10.41
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Published CUSIP Number:
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CREDIT AGREEMENT
Dated as of September 27, 2004
among
ODYSSEY RE HOLDINGS CORP.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS........................ 1
Section 1.01. Defined Terms........................................... 1
Section 1.02. Other Interpretive Provisions...........................22
Section 1.03. Accounting Terms........................................23
Section 1.04. Rounding................................................23
Section 1.05. Times of Day............................................23
Section 1.06. Letter of Credit Amounts................................23
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS...................24
Section 2.01. Revolving Loans.........................................24
Section 2.02. Borrowings, Conversions and Continuations of
Revolving Loans.........................................24
Section 2.03. Letters of Credit.......................................25
Section 2.04. Term Out................................................35
Section 2.05. Prepayments.............................................36
Section 2.06. Termination or Reduction of Commitments.................36
Section 2.07. Repayment of Loans......................................37
Section 2.08. Interest................................................37
Section 2.09. Fees....................................................37
Section 2.10. Computation of Interest and Fees........................38
Section 2.11. Evidence of Debt........................................38
Section 2.12. Payments Generally; Administrative Agent's Clawback.....39
Section 2.13. Sharing of Payments by Lenders..........................40
Section 2.14. Extension of Maturity Date..............................41
Section 2.15. Increase in Commitments.................................43
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY..................44
Section 3.01. Taxes...................................................44
Section 3.02. Illegality..............................................46
Section 3.03. Inability to Determine Rates............................46
Section 3.04. Increased Costs.........................................46
Section 3.05. Compensation for Losses.................................48
Section 3.06. Mitigation Obligations; Replacement of Lenders..........49
Section 3.07. Survival................................................49
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS...............49
Section 4.01. Conditions of Initial Credit Extension..................49
Section 4.02. Conditions to all Credit Extensions.....................51
ARTICLE V. REPRESENTATIONS AND WARRANTIES..........................51
Section 5.01. Existence, Qualification and Power; Compliance
with Laws...............................................51
Section 5.02. Authorization; No Contravention.........................52
Section 5.03. Governmental Authorization; Other Consents..............52
Section 5.04. Binding Effect..........................................52
Section 5.05. Financial Statements; No Material Adverse Effect........52
Section 5.06. Litigation..............................................53
Section 5.07. No Default..............................................53
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Section 5.08. Ownership of Property; Liens............................53
Section 5.09. Insurance...............................................54
Section 5.10. Taxes...................................................54
Section 5.11. ERISA Compliance........................................54
Section 5.12. Subsidiaries; Equity Interests..........................55
Section 5.13. Margin Regulations; Investment Company Act;
Public Utility Holding Company Act......................55
Section 5.14. Disclosure..............................................55
Section 5.15. Compliance with Laws....................................56
Section 5.16. Solvent.................................................56
Section 5.17. Licenses................................................56
Section 5.18. Reinsurance Agreements..................................56
ARTICLE VI. AFFIRMATIVE COVENANTS...................................57
Section 6.01. Financial Statements....................................57
Section 6.02. Certificates; Other Information.........................58
Section 6.03. Notices.................................................60
Section 6.04. Payment of Obligations..................................61
Section 6.05. Preservation of Existence, Etc..........................62
Section 6.06. Maintenance of Properties...............................62
Section 6.07. Maintenance of Insurance................................62
Section 6.08. Compliance with Laws....................................62
Section 6.09. Books and Records.......................................62
Section 6.10. Inspection Rights.......................................63
Section 6.11. Use of Proceeds.........................................63
Section 6.12. Dividends...............................................63
Section 6.13. Ownership of Insurance Subsidiaries.....................63
ARTICLE VII. NEGATIVE COVENANTS......................................63
Section 7.01. Liens...................................................63
Section 7.02. Investments.............................................65
Section 7.03. Indebtedness............................................65
Section 7.04. Merger; Consolidation; Disposition of Assets............66
Section 7.05. Restricted Payments.....................................67
Section 7.06. Change in Nature of Business............................67
Section 7.07. Transactions with Affiliates............................67
Section 7.08. Certain Amendments......................................67
Section 7.09. Burdensome Agreements...................................68
Section 7.10. Use of Proceeds.........................................68
Section 7.11. Fiscal Year.............................................68
Section 7.12. Pari Passu..............................................68
Section 7.13. Reinsurance Agreements..................................68
Section 7.14. Financial Covenants.....................................68
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES..........................69
Section 8.01. Events of Default.......................................69
Section 8.02. Remedies Upon Event of Default..........................71
Section 8.03. Application of Funds....................................72
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ARTICLE IX. ADMINISTRATIVE AGENT....................................73
Section 9.01. Appointment and Authority...............................73
Section 9.02. Rights as a Lender......................................73
Section 9.03. Exculpatory Provisions..................................73
Section 9.04. Reliance by Administrative Agent........................74
Section 9.05. Delegation of Duties....................................75
Section 9.06. Resignation of Administrative Agent.....................75
Section 9.07. Non-Reliance on Administrative Agent and Other Lenders..76
Section 9.08. No Other Duties, Etc....................................76
Section 9.09. Administrative Agent May File Proofs of Claim...........76
ARTICLE X. MISCELLANEOUS...........................................77
Section 10.01. Amendments, Etc.........................................77
Section 10.02. Notices; Effectiveness; Electronic Communication........78
Section 10.03. No Waiver; Cumulative Remedies..........................79
Section 10.04. Expenses; Indemnity; Damage Waiver......................80
Section 10.05. Payments Set Aside......................................81
Section 10.06. Successors and Assigns..................................82
Section 10.07. Treatment of Certain Information; Confidentiality.......86
Section 10.08. Right of Set-off........................................86
Section 10.09. Interest Rate Limitation................................87
Section 10.10. Counterparts; Integration; Effectiveness................87
Section 10.11. Survival of Representations and Warranties..............87
Section 10.12. Severability............................................87
Section 10.13. Replacement of Lenders..................................88
Section 10.14. Governing Law; Jurisdiction; Etc........................88
Section 10.15. Waiver Jury Trial.......................................89
Section 10.16. USA PATRIOT Act Notice..................................90
SIGNATURES...................................................................S-1
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SCHEDULES
1.01 Existing Letters of Credit
2.01 Commitments and Applicable Percentages
5.05 Supplement to Interim Financial Statements
5.10 Tax Sharing Agreements
5.12 Subsidiaries and Other Equity Investments
5.17 Licenses
5.18 Reinsurance Agreements
7.01 Existing Liens
7.03 Existing Indebtedness
7.07 Transactions with Affiliates
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Revolving Loan Notice
B Revolving Note
C Compliance Certificate
D Assignment and Assumption
E Security Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of September 27,
2004, among ODYSSEY RE HOLDINGS CORP, a Delaware corporation (the "Borrower"),
ODYSSEY AMERICA REINSURANCE CORPORATION, a Connecticut corporation ("OARC"),
CLEARWATER INSURANCE COMPANY, a Delaware corporation, ▇▇▇▇▇▇ INSURANCE COMPANY,
a Delaware corporation, ▇▇▇▇▇▇ SPECIALTY INSURANCE COMPANY, a New York
corporation, each lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), and BANK OF AMERICA, N.A., as
Administrative Agent and L/C Issuer.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Acquisition" means the acquisition by any Person of (a) a majority of
the Equity Interests of another Person, (b) all or substantially all of the
assets of another Person or (c) all or substantially all of a line of business
of another Person, in each case (i) whether or not involving a merger or
consolidation with such other Person and (ii) whether in one transaction or a
series of related transactions.
"Additional Commitment Lender" has the meaning specified in Section
2.14(d).
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify to the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement.
1
"A.M. Best" means A.M. Best Company, Inc. and any successor thereto.
"Annual Statement" means, with respect to any Insurance Subsidiary for
any fiscal year, the annual financial statements of such Insurance Subsidiary as
required to be filed with the Insurance Regulatory Authority of its jurisdiction
of domicile and in accordance with the laws of such jurisdiction, together with
all exhibits, schedules, certificates and actuarial opinions required to be
filed or delivered therewith, prepared in accordance with Statutory Accounting
Practices. References to amounts on particular exhibits, schedules, lines, pages
and columns of such Annual Statements are based on the formats promulgated by
the NAIC for 2003 Annual Statements for the applicable Insurance Subsidiary. 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 recorded in the referenced item
in the 2003 Annual Statement of the Insurance Subsidiary.
"Applicable Percentage" means with respect to any Lender at any time,
the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender's Commitment at such time. If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if
the Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.
"Applicable Rate" means a per annum rate equal to:
(a) with respect to Base Rate Loans, 0%;
(b) with respect to Eurodollar Rate Loans and Unsecured Letters of
Credit, 1.250%; and
(c) with respect to the Commitment Fee, 0.225%.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Asset Disposition" has the meaning specified in Section 7.04(b).
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit D or any other form approved form
approved by the Administrative Agent.
2
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2003, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Auto-Extension Letter of Credit" has the meaning specified in Section
2.03(b)(iii).
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the commitment of each Lender to make Loans and of the obligation
of the of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America'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 such rate announced by Bank of America 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
Rate.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrower Materials" has the meaning specified in Section 6.02.
"Borrower Reinsurance Agreement" means any arrangement whereby any
Insurance Subsidiary, as reinsurer, agrees to indemnify any other insurance or
reinsurance company against all or a portion of the insurance risks underwritten
by such insurance or reinsurance company under any insurance or reinsurance
policy.
"Borrowing" means a Revolving Borrowing.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar
3
Rate Loan, means any such day on which dealings in Dollar deposits are conducted
by and between banks in the London interbank eurodollar market.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Change in Law" means the occurrence, after the date of this Agreement,
of any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to
have "beneficial ownership" of all Equity Interests that such person or
group has the right to acquire (such right, an "option right"), whether
such right is exercisable immediately or only after the passage of
time) other than Fairfax, directly or indirectly, of 25% or more of the
Equity Interests of the Borrower entitled to vote for members of the
board of directors or equivalent governing body of such Person on a
fully-diluted basis (and taking into account all such securities that
such person or group has the right to acquire pursuant to any option
right); or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
the Borrower cease to be composed of individuals (i) who were members
of that board or equivalent governing body on the first day of such
period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body
was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one
or more directors by any person or group other than a solicitation for
the election of one or more directors by or on behalf of the board of
directors); or
(c) Fairfax shall fail to own more than 50% of the Equity Interests of
the Borrower entitled to vote for members of the board of directors of
the Borrower; or
(d) any Change of Control (as defined in any other Indebtedness of the
Borrower or any of its Subsidiaries) shall occur.
4
"Clearwater" means Clearwater Insurance Company (formerly Odyssey
Reinsurance Corporation), a Delaware corporation.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986.
"Collateral Agent" means Bank of America, N.A..
"Collateral Coverage Percentage" means the following percentages based
upon the A.M. Best Financial Strength Rating set forth below:
APPLICABLE COLLATERAL COVERAGE PERCENTAGES BASED UPON A.M. BEST
FINANCIAL STRENGTH RATING
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COLLATERAL DESCRIPTION A- OR BETTER LOWER THAN A-
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CASH 100% 90%
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NEGOTIABLE DEBT OBLIGATIONS ISSUED BY 90% 80%
THE U.S. TREASURY DEPARTMENT OR BACKED
BY THE FULL FAITH AND CREDIT OF THE U.S.
TREASURY
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NEGOTIABLE DEBT OBLIGATIONS ISSUED BY 80% 70%
U.S. FEDERAL AGENCIES
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"Collateral Deficiency" has the meaning specified in Section
2.03(m)(ii).
"Commitment" means, as to each Lender, its obligation to (a) make
Revolving Loans to the Borrower pursuant to Section 2.01, and (b) purchase
participations in L/C Obligations, and in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.
"Commitment Fee" has the meaning specified in Section 2.09(a).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Consolidated Indebtedness" means, as of the last day of any fiscal
quarter, the aggregate (without duplication) of all Indebtedness of the Borrower
and its Subsidiaries as of such date, determined on a consolidated basis in
accordance with GAAP. For purposes of calculating the Total Debt to
Capitalization Ratio, the aggregate amount of Convertible Debt shall be excluded
from the calculation of Consolidated Indebtedness.
5
"Consolidated Net Income" means, for any period, all amounts which, in
conformity with GAAP consistently applied, would be included under net income on
a consolidated income statement of the Borrower and each of its Subsidiaries for
such period.
"Consolidated Net Worth" means, at any time, the net worth of the
Borrower and its Subsidiaries at such time, determined on a consolidated basis
in accordance with GAAP but excluding any preferred stock or other class of
Equity Interest that, by its stated terms (or by the terms of any class of
Equity Interest issuable upon conversion thereof or in exchange therefor), or
upon the occurrence of any event, matures or is mandatorily redeemable, or is
redeemable at the option of the holders thereof, in whole or in part and
excluding the effect of Statement of Financial Accounting Standards No. 115
issued by the Financial Accounting Standards Board.
"Contingent Obligation" means, as to any Person (without duplication),
any direct or indirect liability of that Person, whether or not contingent, with
or without recourse, (a) with respect to any Indebtedness, lease, dividend,
letter of credit (excluding any letter of credit supporting reinsurance
liabilities to the extent of reserves established under GAAP) or other
obligation (the "primary obligations") of another person (the "primary obligor")
including (i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or provide funds for the
payment or discharge of any such primary obligation, or to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof (each, a "Guaranty
Obligation"); (b) with respect to any Surety Instrument issued for the account
of that Person or as to which that Person is otherwise liable for reimbursement
of drawings or payments; (c) to purchase any materials, supplies or other
property from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other property is
ever made or tendered, or such services are ever performed or tendered, or (d)
in respect of any Swap Contract; provided, however, that obligations of each of
the Insurance Subsidiaries under Insurance Agreements or Borrower Reinsurance
Agreements which are entered into 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 Obligations of such Insurance Subsidiary or the Borrower for the
purposes of this Agreement. The amount of any Person's obligation under any
Contingent Obligations shall (subject to any limitation set forth therein) be
deemed to be the lesser of (i) the outstanding principal amount (or maximum
permitted principal amount, if larger) of the Indebtedness, obligation or other
liability guaranteed or supported thereby or (ii) the maximum stated amount so
guaranteed or supported.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
6
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Convertible Debt" means the 4.375% Convertible Senior Debentures due
2022, dated June 18, 2002, in the initial aggregate amount of $110,000,000, and
which are outstanding on the Closing Date.
"Conversion Amount" has the meaning specified in Section 2.04(a).
"Credit Extension" means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.
"▇▇▇▇ & ▇▇▇▇▇▇▇" means ▇▇▇▇ & ▇▇▇▇▇▇▇ Holdings Corp., a Delaware
corporation.
"Debt Rating" means, as of any date of determination, the rating as
determined by S&P of the Borrower's non-credit enhanced, senior unsecured
long-term debt.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means(a) when used with respect to Obligations other
than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus
(ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2%
per annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b)
when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Rate plus 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Revolving Loans or participations in L/C Obligations required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
7
"Dollar" and "$" mean lawful money of the United States.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and the L/C Issuer, and (ii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
8
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not appear
on such page or service or such page or service shall not be available,
the rate per annum equal to the rate determined by the Administrative
Agent to be the offered rate on such other page or other service that
displays an average British Bankers Association Interest Settlement
Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which deposits in Dollars for delivery
on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America's London Branch to
major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the
first day of such Interest Period.
"Eurodollar Rate Loan" means a Revolving Loan that bears interest at a
rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending
9
Office is located, (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 10.13), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lender's failure or inability (other than as a
result of a Change in Law) to comply with Section 3.01(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 3.01(a).
"Existing Letters of Credit" means those Letters of Credit set forth on
Schedule 1.01.
"Existing Maturity Date" has the meaning specified in Section 2.14(a).
"Fairfax" means Fairfax Financial Holdings Limited, a Canada
corporation.
"Fair Market Value" means, as of any date of determination thereof and
with respect to any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a compulsion to
buy or sell).
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of
New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means the letter agreement, dated June 14, 2004 among the
Borrower, the Administrative Agent and the Arranger.
"Financial Strength Rating" means the opinion by A.M. Best of OARC's
ability to meet its obligations to its policyholders.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
10
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United
States set forth 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 such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
"Granting Lender" has the meaning specified in Section 10.06(h).
"Guarantee" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided, that a
Guarantee shall exclude (A) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of such
Person's business, and (B) obligations under indemnities in the ordinary course
of such Person's business (including, without limitation, pursuant to contracts
of insurance or reinsurance issued or assumed by such Person) or under stock
purchase or asset purchase or sale agreements, or which do not cover
Indebtedness of the type described in clauses (a) through (h) of the definition
of Indebtedness. The amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term "Guarantee" as a
verb has a corresponding meaning.
11
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Historical Statutory Statements" has the meaning specified in Section
5.05(c).
"▇▇▇▇▇▇" ▇▇▇▇▇▇ Insurance Company, a Delaware corporation.
"▇▇▇▇▇▇ Specialty" ▇▇▇▇▇▇ Specialty Insurance Company, a
New York
corporation.
"Increase Effective Date" has the meaning specified in Section 2.15(d).
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the
ordinary course of business and, in each case, not past due for more
than 60 days after the date on which such trade account payable was
created);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest
in such Person or any other Person, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited
12
liability company) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such
Person. The amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date. The
amount of any capital lease or Synthetic Lease Obligation as of any date shall
be deemed to be the amount of Attributable Indebtedness in respect thereof as of
such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 10.04(b).
"Insurance Agreement" means all contracts of insurance issued by an
Insurance Subsidiary.
"Insurance Regulatory Authority" means, with respect to any Insurance
Subsidiary, the insurance department or similar Governmental Authority charged
with regulating insurance companies or insurance holding companies, in its
jurisdiction of domicile and, to the extent that it has regulatory authority
over such Insurance Subsidiary, in each other jurisdiction in which such
Insurance Subsidiary conducts business or is licensed to conduct business.
"Insurance Subsidiary" means any Subsidiary of the Borrower the ability
of which to pay dividends is regulated by an Insurance Regulatory Authority or
that is otherwise required to be regulated thereby in accordance with the
applicable Requirements of Law of its jurisdiction of domicile, and shall mean
and include, without limitation, each of OARC, Clearwater, ▇▇▇▇▇▇ and ▇▇▇▇▇▇
Specialty.
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date if a Revolving Loan and the Term Loan Maturity Date if a Term
Loan; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date if a Revolving Loan and the Term
Loan Maturity Date if a Term Loan.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Revolving Loan Notice;
provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period 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
13
(iii) (a) for Revolving Loans, no Interest Period shall extend beyond
the Maturity Date and (b) for Term Loans, no Interest Period shall
extend beyond the Term Loan Maturity Date.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IRS" means the United States Internal Revenue Service.
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
such issuance.
"Issuer Documents" means with respect to any Letter of Credit, the
Letter of Credit Application, and any other document, agreement and instrument
entered into by the L/C Issuer and the Letter of Credit Obligor or in favor of
the L/C Issuer and relating to any such Letter of Credit.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Applicable
Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Borrowing.
"L/C Collateral" means (i) cash, (ii) negotiable debt obligations
issued by the U.S. Treasury Department or backed by the full faith and credit of
the U.S. Treasury or (iii) negotiable debt obligations issued by U.S. federal
agencies, provided such collateral is (x) capable of being marked-to-market on a
weekly basis and (y) subject to a perfected, first priority Lien in favor of the
Collateral Agent for the benefit of the L/C Issuer and the Lenders.
14
"L/C Collateral Balance" means, with respect to each Secured Letter of
Credit, the sum of the Collateral Value of each type of L/C Collateral securing
such Secured Letter of Credit multiplied by the Collateral Coverage Percentage
for such type of L/C Collateral. For purposes hereof, the "Collateral Value" of
government or agency obligations or bonds shall be determined from the most
recent closing bid price for such obligations or bonds obtained from the Wall
Street Journal, or such other reputable reporting service as the Administrative
Agent may select. If such closing bid price is not available in the Wall Street
Journal, or such other reputable reporting service as the Administrative Agent
may select, the Collateral Value shall be the value quoted to the Administrative
Agent by a reputable brokerage firm selected by the Administrative Agent.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
amount available to be drawn under of all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph
hereto.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder
and shall include the Existing Letters of Credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
"Letter of Credit Obligors" means the Borrower, OARC, Clearwater,
▇▇▇▇▇▇ and ▇▇▇▇▇▇ Specialty and certain other Insurance Subsidiaries.
"Letter of Credit Sublimit" means an amount equal to $65,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
15
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"License" has the meaning specified in Section 5.18.
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Revolving Loan or a Term Loan, as applicable.
"Loan Documents" means this Agreement, each Note, each Issuer Document,
the Fee Letter, and all other documents executed and delivered by Borrower to
the Administrative Agent, the Collateral Agent or any Lender in connection
therewith.
"Loan Parties" means, collectively, the Borrower and each Letter of
Credit Obligor.
"Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets or properties of the Borrower and its
Subsidiaries, taken as a whole.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Maturity Date" means the later of (a) September 27, 2005 and (b) if
maturity is extended pursuant to Section 2.14, such extended maturity date as
determined pursuant to such Section.
"Mortgage Backed Securities" means investment securities representing
any undivided interest or participation in or which are secured by, a pool of
loans secured by mortgages or deeds of trust.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in absence of the National Association of Insurance
Commissioners or such successor, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.
16
"Non-Extending Lender" has the meaning specified in Section 2.14(b).
"Nonrenewal Notice Date" has the meaning specified in Section
2.03(b)(iii).
"Northbridge Financial" means Northbridge Financial Corporation, a
Canada corporation.
"Note" means either a Revolving Loan Note or a Term Loan Note, as the
context requires.
"Notice Date" has the meaning specified in Section 2.14(b).
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means (i) with respect to Revolving Loans on any
date, the aggregate outstanding principal amount thereof after giving effect to
any borrowings and prepayments or repayments of Revolving Loans occurring on
such date; and (ii) with respect to any L/C Obligations on any date, the amount
of such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of Unreimbursed Amounts.
"Participant" has the meaning specified in Section 10.06(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
17
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Platform" has the meaning specified in Section 6.02.
"Private Placement Debt" means the indebtedness of the Borrower (a) in
the aggregate original principal amount of $100,000,000 under its senior notes
designated "7.49% Senior Notes Due November 30, 2006", each payable in
accordance with the respective terms of such notes and Note Purchase Agreement
entered into with respect thereto and (b) in the aggregate original principal
amount of $225,000,000 under its senior notes designated "7.65% Senior Notes Due
2013", each payable in accordance with the respective terms of such notes and
Note Agreements entered into with respect thereto.
"Public Lender" has the meaning specified in Section 6.02.
"Quarterly Statement" means the quarterly statutory financial statement
of any Insurance Subsidiary required to be filed with the Insurance Regulatory
Authority of its jurisdiction of incorporation or, if no specific form is so
required, in the form of financial statements permitted by such Insurance
Regulatory Authority to be used for filing quarterly statutory financial
statements and shall contain the type of financial information permitted by such
Insurance Regulatory Authority to be disclosed therein, together with all
exhibits, schedules, certificates and actuarial opinions required to be filed or
delivered therewith, prepared in accordance with Statutory Accounting Practices.
"Reinsurance Agreement" means any agreement, contract, treaty,
certificate of other arrangement whereby any Insurance Subsidiary agrees to
transfer, cede or retrocede to another insurer or reinsurer all or part of the
liability assumed or assets held by such Insurance Subsidiary under a policy or
policies of insurance or reinsurance issued by such Insurance Subsidiary.
"Register" has the meaning specified in Section 10.06(c).
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
18
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Revolving Loans, a Revolving Loan Notice, and (b)
with respect to an L/C Credit Extension, a Letter of Credit Application.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations
being deemed "held" by such Lender for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, or controller of a Loan Party. Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.
"Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period made by each of the Lenders pursuant to Section
2.01.
"Revolving Loan" has the meaning specified in Section 2.01.
"Revolving Loan Note" means a promissory note made by the Borrower in
favor of a Lender evidencing Revolving Loans made by such Lender, substantially
in the form of Exhibit B.
"Revolving Loan Notice" means a notice of (a) a Revolving Borrowing,
(b) a conversion of Revolving Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"S&P" means Standard & Poor's Insurance Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
19
"Secured Letter of Credit" means a Letter of Credit issued hereunder
other than an Existing Letter of Credit.
"Security Agreement" means a Pledge and Security Agreement executed by
the Borrower and each of the Letter of Credit Obligors in favor of the
Collateral Agent, substantially in the form of Exhibit E.
"Solvent" means, with respect to any Person, as of any date of
determination, that the fair value of the assets of such Person (at fair
valuation) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date, that the present fair saleable value of the assets of such
Person will, as of such date, be greater than the amount that will be required
to pay the probable liability of such Person on its debts as such debts become
absolute and matured, and that, as of such date, such Person will be able to pay
all liabilities of such Person as such liabilities mature and such Person does
not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"SPC" has the meaning specified in Section 10.06(h).
"Statutory Accounting Practices" means, with respect to any Insurance
Subsidiary, the statutory accounting practices prescribed or permitted by the
relevant Insurance Regulatory Authority of its state of domicile, consistently
applied and maintained and in conformity with those used in the preparation of
the most recent Historical Statutory Statements.
"Statutory Surplus" means the total amount shown as "surplus as regards
policyholders" on line 35, column 1, page 3 of the Annual Statement of OARC.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Surplus Relief Reinsurance Agreement" means any agreement or other
arrangement whereby any Insurance Subsidiary cedes business under a reinsurance
agreement that would not be considered a transaction that indemnifies an insurer
against loss or liability relating to insurance risk, as determined in
accordance with Statement of Financial Accounting Standards No. 113 ("FAS 113")
issued by the Financial Accounting Standards Board.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or
20
bond index swaps or options or forward bond or forward bond price or forward
bond index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination of
any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a "Master Agreement"), including any such
obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Term Loan" has the meaning specified in Section 2.04(a).
"Term Loan Maturity Date" means the date that is 12 months after the
Maturity Date.
"Term Loan Note" has the meaning specified in Section 2.04(b).
"Term Out Notice" has the meaning specified in Section 2.04(a).
"Term Out Premium" has the meaning specified in Section 2.04(c).
"Total Debt to Capitalization Ratio" means, as of any date of
determination, the ratio of (a) Consolidated Indebtedness as of such date to (b)
the sum of (i) Consolidated Indebtedness and (ii) Consolidated Net Worth, each
as of such date; provided, however, for purposes of calculating the Total Debt
to Capitalization Ratio, only the amount of any outstanding claim against any of
the Guarantees set forth in items 1, 2 and 3 on Schedule 7.03 which has not been
21
indemnified and paid by Fairfax within 10 days after such claim is made against
any of such Guarantees shall be included in the calculation of Consolidated
Indebtedness.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Type" means, with respect to a Revolving Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
"Unsecured Letter of Credit" means each Existing Letter of Credit.
"Wholly Owned Subsidiary" means any Person in which (other than
directors' qualifying shares or similar interests required by law) 100% of the
Equity Interests of each class having ordinary voting power, and 100% of the
Equity Interests of every other class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of record, by the
Borrower, or by one or more Wholly Owned Subsidiaries, or both.
SECTION 1.02. OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (iii) the words
"herein," "hereof" and "hereunder" and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and
22
(vi) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
(b) 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."
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
SECTION 1.03. ACCOUNTING TERMS.
(a) Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
or Statutory Accounting Practices, as the case may be, applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.
(b) Changes in GAAP or Statutory Accounting Practices. If at any time
any change in GAAP or Statutory Accounting Practices, as the case may be, would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP or Statutory Accounting Practices, as the case
may be, (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP or Statutory Accounting Practices, as the case may be,
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP or Statutory Accounting
Practices, as the case may be.
SECTION 1.04. ROUNDING. Any financial ratios required to be
maintained by the Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).
SECTION 1.05. TIMES OF DAY. Unless otherwise specified, all
references herein to times of day shall be references to Eastern time (daylight
or standard, as applicable).
SECTION 1.06. LETTER OF CREDIT AMOUNTS. Unless otherwise specified
herein, the amount of a Letter of Credit at any time shall be deemed to mean be
the stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or the
terms of any Letter of Credit Application related thereto, provides
23
for one or more automatic increases in the stated amount thereof, the amount of
such Letter of Credit shall be deemed to be the maximum stated amount of such
Letter of Credit after giving effect to all such increases, whether or not such
maximum stated amount is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
SECTION 2.01. REVOLVING LOANS. Subject to the terms and conditions
set forth herein, each Lender severally agrees to make loans (each such loan, a
"Revolving Loan") to the Borrower from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Revolving Borrowing, (i) the Total Outstandings shall
not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount
of the Revolving Loans of any Lender, plus such Lender's Applicable Percentage
of the Outstanding Amount of all L/C Obligations, shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Borrower may borrow under this Section
2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Revolving
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
SECTION 2.02. BORROWINGS, CONVERSIONS AND CONTINUATIONS OF REVOLVING
LOANS.
(a) Each Revolving Borrowing, each conversion of Revolving Loans from
one Type to the other, and each continuation of Eurodollar Rate Loans shall be
made upon the Borrower's irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Revolving Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in Sections
2.03(c), each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Revolving Loan Notice (whether telephonic or written) shall specify (i)
whether the Borrower is requesting a Revolving Borrowing, a conversion of
Revolving Loans from one Type to the other, or a continuation of Eurodollar Rate
Loans, (ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal amount of
Revolving Loans to be borrowed, converted or continued, (iv) the Type of
Revolving Loans to be borrowed or to which existing Revolving Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Revolving Loan in a
Revolving Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Revolving Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower
24
requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans
in any such Revolving Loan Notice, but fails to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Revolving Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Applicable
Percentage of the applicable Revolving Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate
Loans described in the preceding subsection. In the case of a Revolving
Borrowing, each Lender shall make the amount of its Revolving Loan available to
the Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Revolving Loan Notice with respect to such
Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then
the proceeds of such Borrowing, first, shall be applied to the payment in full
of any such L/C Borrowings, and second, shall be made available to the Borrower
as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. At any time that
Base Rate Loans are outstanding, the Administrative Agent shall notify the
Borrower and the Lenders of any change in Bank of America's prime rate used in
determining the Base Rate promptly following the public announcement of such
change.
(e) After giving effect to all Revolving Borrowings, all conversions
of Revolving Loans from one Type to the other, and all continuations of
Revolving Loans as the same Type, there shall not be more than ten Interest
Periods in effect with respect to Revolving Loans.
SECTION 2.03. LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this Section 2.03, (1) from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Letter of Credit Obligors, and to
amend or extend Letters of Credit previously issued by it, in accordance with
25
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Letter of Credit Obligors and any drawings thereunder;
provided that after giving effect to any L/C Credit Extension with respect to
any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any
Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of
all L/C Obligations shall not exceed such Lender's Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by a Letter of Credit Obligor for the issuance or
amendment of a Letter of Credit shall be deemed to be a representation by such
Letter of Credit Obligor that the L/C Credit Extension so requested complies
with the conditions set forth in the proviso to the preceding sentence. Within
the foregoing limits, and subject to the terms and conditions hereof, each
Letter of Credit Obligor's ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Letter of Credit Obligors may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. Each Letter of Credit
(other than an Existing Letter of Credit) shall be a Secured Letter of Credit;
provided however that each such Secured Letter of Credit shall comply with the
provisions of Section 2.03(m) hereof throughout the entire term of such Letter
of Credit. All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto and from and after the Closing Date shall be subject to and
governed by the terms and conditions hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of
such requested Letter of Credit would occur more than twelve
months after the date of issuance or last extension, unless the
Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit
would occur after the Letter of Credit Expiration Date, unless
all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue
any Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or
any Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit,
or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon the L/C Issuer with respect to
such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which
the L/C Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
26
(B) the issuance of such Letter of Credit would violate
one or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative
Agent and the L/C Issuer, such Letter of Credit is in an initial
stated amount less than $200,000;
(D) such Letter of Credit is to be denominated in a
currency other than Dollars;
(E) such Letter of Credit contains any provisions for
automatic reinstatement of the stated amount after any drawing
thereunder; or
(F) a default of any Lender's obligations to fund under
Section 2.03(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered
into satisfactory arrangements with the Letter of Credit Obligor
or such Lender to eliminate the L/C Issuer's risk with respect
to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if
the L/C Issuer would not be permitted at such time to issue such Letter of
Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or (B)
the beneficiary of such Letter of Credit does not accept the proposed amendment
to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith, and the L/C Issuer shall have all of the benefits and immunities (A)
provided to the Administrative Agent in Article IX with respect to any acts
taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and Letter of Credit
Applications pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in Article IX included the L/C Issuer with
respect to such acts or omissions, and (B) as additionally provided herein with
respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of a Letter of Credit Obligor delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of such Letter of Credit Obligor. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than 11:00
a.m. at least two Business Days (or such later date and time as the
Administrative Agent and L/C Issuer may agree in a particular instance in their
sole discretion) prior to the proposed issuance date or date of amendment, as
the case may be. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit
27
(which shall be a Business Day); (B) the amount thereof; (C) the expiry date
thereof; (D) the name and address of the beneficiary thereof; (E) the documents
to be presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may require. In
the case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Letter of Credit Obligor shall furnish to the L/C Issuer and
the Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
such Letter of Credit Application from the Letter of Credit Obligor and, if not,
the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless
the L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied, then,
subject to the terms and conditions hereof, the L/C Issuer shall, on the
requested date, issue a Letter of Credit for the account of the applicable
Letter of Credit Obligor or enter into the applicable amendment, as the case may
be, in each case in accordance with the L/C Issuer's usual and customary
business practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer a risk participation in such Letter of Credit in an
amount equal to the product of such Lender's Applicable Percentage times the
amount of such Letter of Credit.
(iii) If the Letter of Credit Obligor so requests in any
applicable Letter of Credit Application, the L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit that has automatic
extension provisions (each, an "Auto-Extension Letter of Credit"); provided that
any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent
any such extension at least once in each twelve-month period (commencing with
the date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the "Non-Extension Notice Date") in
each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the L/C Issuer, the Letter of
Credit Obligor shall not be required to make a specific request to the L/C
Issuer for any such extension. Once an Auto-Extension Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not require) the
L/C Issuer to permit the extension of such Letter of Credit at any time to an
expiry date not later than the Letter of Credit Expiration Date; provided,
however, that the L/C Issuer shall not permit any such extension if (A) the L/C
Issuer has determined that it would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or
clause (iii) of Section 2.03(a) or otherwise), or (B) it has received notice
(which may be by telephone or in writing) on or before the day that is five
Business Days before the Non-Extension Notice Date (1) from the Administrative
Agent that the Required
28
Lenders have elected not to permit such extension or (2) from the Administrative
Agent, any Lender or the Letter of Credit Obligor that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied, and in
each such case directing the L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the Letter of
Credit Obligor and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Letter of Credit Obligor which requested the issuance of such Letter
of Credit and the Administrative Agent thereof. Not later than 11:00 a.m. on the
date of any payment by the L/C Issuer under a Letter of Credit (each such date,
an "Honor Date"), such Letter of Credit Obligor shall reimburse the L/C Issuer
through the Administrative Agent in an amount equal to the amount of such
drawing. If such Letter of Credit Obligor fails to so reimburse the L/C Issuer
by such time, the Administrative Agent shall promptly notify each Lender of the
Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"),
and the amount of such Lender's Applicable Percentage thereof. In such event,
the Borrower shall be deemed to have requested a Revolving Borrowing of Base
Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Aggregate Commitments and the conditions
set forth in Section 4.02 (other than the delivery of a Revolving Loan Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(ii) Each Lender shall upon any notice pursuant to Section
2.03(c)(i) make funds available to the Administrative Agent for the account of
the L/C Issuer at the Administrative Agent's Office in an amount equal to its
Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the
Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.03(c)(iii), each Lender that so makes
funds available shall be deemed to have made a Base Rate Loan to the Borrower in
such amount. The Administrative Agent shall remit the funds so received to the
L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Borrowing of Base Rate Loans because the conditions
set forth in Section 4.02 cannot be satisfied or for any other reason, the
Letter of Credit Obligor for whose account that such Letter of Credit was issued
shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate. In such event, each Lender's payment to the
Administrative Agent for the
29
account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.
(iv) Until each Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's
Applicable Percentage of such amount shall be solely for the account of the L/C
Issuer.
(v) Each Lender's obligation to make Revolving Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit,
as contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Letter of Credit Obligor or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make Revolving
Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Revolving Loan Notice).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of such Letter of Credit Obligor to reimburse the L/C Issuer for the
amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c)
by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled
to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds
Rate and a rate determined by the L/C Issuer in accordance with banking industry
rules on interbank compensation. A certificate of the L/C Issuer submitted to
any Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from Letter of Credit Obligor or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Applicable Percentage thereof
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's L/C Advance was outstanding) in the same
funds as those received by the Administrative Agent.
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(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Applicable Percentage thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under this clause
shall survive the payment in full of the Obligations and the termination of this
Agreement.
(e) Obligations Absolute. The obligation of each Letter of Credit
Obligor to reimburse the L/C Issuer for each drawing under each Letter of Credit
issued for such Letter of Credit Obligor's account and the obligation of each
Letter of Credit Obligor to repay each L/C Borrowing with respect to each Letter
of Credit issued for such Letter of Credit Obligor's account shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense
or other right that any Letter of Credit Obligor may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the L/C Issuer
or any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any Letter
of Credit Obligor.
The Letter of Credit Obligor shall promptly examine a copy of each
Letter of Credit issued for its account and each amendment thereto that is
delivered to it and, in the event of any
31
claim of noncompliance with the Letter of Credit Obligor's instructions or other
irregularity, the Letter of Credit Obligor will immediately notify the L/C
Issuer. Such Letter of Credit Obligor shall be conclusively deemed to have
waived any such claim against the L/C Issuer and its correspondents unless such
notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and each Letter of Credit
Obligor agree that, in paying any drawing under a Letter of Credit, the L/C
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document. None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the
L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. Each Letter of Credit
Obligor hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude each Letter of
Credit Obligor from pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. None of the L/C
Issuer, the Administrative Agent, any of their respective Related Parties nor
any correspondent, participant or assignee of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, a Letter of Credit Obligor may have a claim against
the L/C Issuer, and the L/C Issuer may be liable to a Letter of Credit Obligor,
to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by a Letter of Credit Obligor which
such Letter of Credit Obligor proves were caused by the L/C Issuer's willful
misconduct or gross negligence or the L/C Issuer's willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C
Issuer may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) Cash or Cash Collateral. Upon the request of the Administrative
Agent, (i) if, an Event of Default has occurred and is continuing, or (ii) if,
as of the Letter of Credit Expiration Date, any L/C Obligation for any reason
remains outstanding, the Borrower shall, in each case, immediately (A) Cash
Collateralize the then Outstanding Amount of all L/C Obligations or (B)
otherwise fully secure the then Outstanding Amount of all L/C Obligations by
delivering to the Collateral Agent L/C Collateral in an amount equal to the
Collateral Value of such L/C Collateral multiplied by the Collateral Coverage
Percentage for such type of L/C Collateral. Sections 2.05 and 8.02(c) set forth
certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this Section 2.03, Section 2.05 and Section 8.02(c), "Cash
Collateralize" means to pledge and deposit with or deliver to the Administrative
Agent, for the
32
benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby consented to by the Lenders); provided that such cash shall
be multiplied by the applicable Collateral Coverage Percentage. Derivatives of
such term have corresponding meanings. The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.
(h) Applicability of ISP. Unless otherwise expressly agreed by the
L/C Issuer and the Letter of Credit Obligor when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), the
rules of the ISP shall apply to each standby Letter of Credit.
(i) Letter of Credit Fees. Each Letter of Credit Obligor shall pay
to the Administrative Agent for the account of each Lender in accordance with
its Applicable Percentage a Letter of Credit fee (the "Letter of Credit Fee")
(i) for each Secured Letter of Credit issued for such Letter of Credit Obligor's
account equal to .30 of 1% per annum times the daily maximum amount available to
be drawn under such Secured Letter of Credit (whether or not such maximum amount
is then in effect under such Letter of Credit), and (ii) for each Unsecured
Letter of Credit issued for such Letter of Credit Obligor's account equal to the
Applicable Rate times the daily maximum amount available to be drawn under such
Unsecured Letter of Credit. For purposes of computing the daily amount available
to be drawn under any Letter of Credit, the amount of such Letter of Credit
shall be determined in accordance with Section 1.06. Letter of Credit Fees shall
be (i) computed on a quarterly basis in arrears and (ii) due and payable on the
first Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If
there is any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Unsecured Letter of Credit shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect. Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate. For purposes of calculating the Letter of Credit Fee, for any day that
there is a Collateral Deficiency with respect to a Secured Letter of Credit such
Secured Letter of Credit will be deemed to be an Unsecured Letter of Credit on
such day.
(j) Fronting Fee and Documentary and Processing Charges Payable to
L/C Issuer. Each Letter of Credit Obligor shall pay directly to the L/C Issuer
for its own account a fronting fee with respect to each Letter of Credit, at the
rate per annum equal to 0.125%, computed on the daily amount available to be
drawn under such Letter of Credit and on a quarterly basis in arrears, and due
and payable on the first Business Day after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand. For purposes of computing the daily amount available to be
drawn under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.06. In
33
addition, the Borrower shall pay directly to the L/C Issuer for its own account
the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. Such customary fees and standard costs
and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
(l) Letters of Credit Issued for Letter of Credit Obligors that are
Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding
hereunder may be in support of any obligations of, or is for the account of, a
Letter of Credit Obligor that is a Subsidiary, the Borrower shall be jointly and
severally obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. The Borrower hereby acknowledges that the
issuance of Letters of Credit for the account of Letter of Credit Obligors that
are Subsidiaries inures to the benefit of the Borrower, and that the Borrower's
business derives substantial benefits from the businesses of such Subsidiaries.
(m) Secured Letters of Credit.
(i) Prior to the issuance of each Secured Letter of Credit,
the Letter of Credit Obligor shall have pledged and deposited with or delivered
to the Collateral Agent for the benefit of the L/C Issuer and the Lenders (or
otherwise subject to a custodial agent control agreement or other agreement by
which the Collateral Agent has a perfected first Lien in the L/C Collateral),
L/C Collateral for each such Secured Letter of Credit pursuant to documentation
in form and substance satisfactory to the Collateral Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). The L/C Collateral
Balance for each such Secured Letter of Credit shall be no less than the face
amount of such Secured Letter of Credit. To the extent that the L/C Obligor of
such Secured Letter of Credit has not (A) delivered L/C Collateral consisting of
certificated securities or instruments into the possession of the Collateral
Agent to the extent such securities or instruments are not book-entry
instruments, (B) obtained the written agreement of any bailee or securities
intermediary in form and substance satisfactory to the Collateral Agent with
respect to any L/C Collateral, or (C) taken any other action required by the
Collateral Agent with respect to the L/C Collateral, the Administrative Agent,
in its sole discretion, may exclude from the calculations of L/C Collateral
Balance, the Collateral Value of any such L/C Collateral until the Letter of
Credit Obligor has complied with this Section 2.03(m)(i) to the sole
satisfaction of the Administrative Agent. Each Letter of Credit Obligor hereby
grants to the Collateral Agent, for the benefit of the L/C Issuer and the
Lenders, a security interest in all L/C Collateral and all proceeds of the
foregoing to secure all obligations of such Letter of Credit Obligor hereunder
in respect of Secured Letters of Credit issued for such Letter of Credit
Obligor's account.
(ii) If, at any time, (A) the L/C Collateral Balance for any
Secured Letter of Credit is less than the face amount of such Secured Letter of
Credit (a "Collateral Deficiency"), the Letter of Credit Obligor in respect of
such Secured Letter of Credit shall no later than fourteen (14) days from the
date of notice thereof by the Administrative Agent, pledge additional L/C
Collateral to cure such Collateral Deficiency. If such Letter of Credit Obligor
fails to pledge
34
additional L/C Collateral for such Secured Letter of Credit within the time
provided above, the Administrative Agent may immediately (A) designate such
Secured Letter of Credit an Unsecured Letter of Credit and (B) exercise its
rights and remedies set forth in Section 8.02(b) hereof, including without
limitation, liquidating all or part of the L/C Collateral for such Secured
Letter of Credit.
(iii) The Collateral Agent shall deliver to the Administrative
Agent for the benefit of the L/C Issuer and the Lenders, no later than 3 p.m.
Dallas, Texas time on the Monday of each week, with respect to each Secured
Letter of Credit, a report listing the L/C Collateral Balance for such Secured
Letter of Credit as of the Friday of the prior week.
SECTION 2.04. TERM OUT.
(a) Term-Out Option. On the Maturity Date, provided that (i) no
Default or Event of Default shall have occurred and be continuing on the
Maturity Date, (ii) the representations and warranties of the Borrower contained
in this Agreement and the other Loan Documents which are qualified as to
materiality are true and correct, and such representations and warranties which
are not qualified as to materiality are true and correct in all material
respects, in each case on and as of the Maturity Date, as though made on and as
of such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date) and (iii) the
Term Out Premium is paid on the Maturity Date, the Borrower shall have the
option (which shall not require the consent of any Lender) to convert all or a
portion of the Revolving Loans outstanding on the Maturity Date to term loans
(the "Term Loans"); provided, however, that the aggregate amount of the
Revolving Loans that may be converted to Term Loans shall not be less than
$5,000,000. Such election must be made no sooner than 45 days prior to the
Maturity Date, and no later than 35 days prior to the Maturity Date (or such
shorter period as agreed to by the Administrative Agent), by written notice to
the Administrative Agent of the election of such conversion (the "Term Out
Notice") in accordance with the terms of Section 10.02 hereof specifying the
principal amount of the Revolving Loans which the Borrower desires to convert to
Term Loans (the "Conversion Amount"). Promptly following its receipt of the Term
Out Notice, the Administrative Agent shall send a copy of the Term Out Notice to
each of the Lenders.
(b) Term Loans. Prior to the Maturity Date, to the extent requested
by each Lender in connection with the conversion of the Revolving Loans to Term
Loans, the Borrower shall execute and deliver new promissory notes to each
Lender in the form required by the Administrative Agent (the "Term Notes"). If
the Borrower has given the Term Out Notice, the lesser of (i) the Conversion
Amount and (ii) the Revolving Loans outstanding on the Maturity Date shall
automatically convert to Term Loans on the Maturity Date with each Lender being
deemed to have made its Applicable Percentage of such Term Loans, and the
Administrative Agent shall promptly notify each Lender of the principal amount
thereof. The principal amount of the Term Loans shall be due and payable on the
Term Loan Maturity Date, unless such Term Loans shall sooner become due and
payable pursuant to Section 8.02 or as otherwise provided in this Agreement. The
Term Loans shall be either Eurodollar Rate Loans or Base Rate Loans, with
interest accruing and being paid in the same manner as Revolving Loans, and with
the Term Loans to be designated as, continued as, or converted into Eurodollar
Rate Loans in the same
35
manner as Revolving Loans could be designated as, continued as, or converted
into Eurodollar Rate Loans or Base Rate Loans as provided in Section 2.02.
(c) Term Out Premium. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage, a fee (the "Term Out Premium") equal to 0.25% times the outstanding
aggregate principal amount of Revolving Loans that are converted to Term Loans
on the Maturity Date pursuant to this Section 2.04. The Term Out Premium shall
be due and payable on the Maturity Date.
SECTION 2.05. PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at
any time or from time to time voluntarily prepay Revolving Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment and the
Type(s) of Revolving Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the amount of such
Lender's Applicable Percentage 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.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Revolving
Loans of the Lenders in accordance with their respective Applicable Percentages.
(b) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b) unless
after the prepayment in full of the Loans the Total Outstandings exceed the
Aggregate Commitments then in effect.
SECTION 2.06. TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower
may, upon notice to the Administrative Agent, terminate the Aggregate
Commitments, or from time to time permanently reduce the Aggregate Commitments;
provided that (i) any such notice shall be received by the Administrative Agent
not later than 11:00 a.m. five Business Days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount of
$10,000,000 or any whole multiple of $1,000,000 in excess thereof, and (iii) the
Borrower shall not terminate or reduce the Aggregate Commitments if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitments. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction
of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall
be applied to the Commitment of each Lender according to such Lender's
36
Applicable Percentage. All fees accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective date of
such termination.
SECTION 2.07. REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Revolving Loans outstanding on such date.
(b) The Borrower shall repay to the Lenders on the Term Loan
Maturity Date the aggregate amount of Term Loans outstanding on such date.
SECTION 2.08. INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate
Revolving Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable
by the Borrower under any Loan Document is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event
of Default exists, the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
(iv) Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
SECTION 2.09. FEES. In addition to certain fees described in
subsections (i) and (j) of Section 2.03 and subsection (c) of Section 2.04:
37
(a) Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage, a commitment fee (the "Commitment Fee") equal to 0.225% times the
actual daily amount by which the Aggregate Commitments exceed the sum of (i) the
Outstanding Amount of Revolving Loans and (ii) the Outstanding Amount of L/C
Obligations. The Commitment Fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date. The Commitment Fee shall be calculated quarterly in arrears, and
if there is any change in the Applicable Rate during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall
have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
SECTION 2.10. COMPUTATION OF INTEREST AND FEES. All computations of
interest for Base Rate Loans when the Base Rate is determined by Bank of
America's "prime rate" shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 2.11. EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so 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
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender
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(through the Administrative Agent) a Note, which shall evidence such Lender's
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit. In the event of
any conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.
SECTION 2.12. PAYMENTS GENERALLY; ADMINISTRATIVE AGENT'S CLAWBACK.
(a) General. All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative Agent, for the account of
the respective Lenders to which such payment is owed, at the Administrative
Agent's Office in Dollars and in immediately available funds not later than 2:00
p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Applicable Percentage (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. If any payment
to be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent.
Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Revolving Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Revolving
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Revolving Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount in immediately available
funds with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender's
39
Revolving Loan included in such Revolving Borrowing. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative
Agent. Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the L/C Issuer hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the L/C Issuer,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the L/C Issuer, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender as provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Article IV are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Revolving Loans, to fund participations in Letters of Credit
and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Revolving Loan, to fund any such participation
or to make any payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Revolving Loan, to purchase its participation or to make
its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
SECTION 2.13. SHARING OF PAYMENTS BY LENDERS. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of the Revolving Loans made by
it, or the participations in L/C Obligations held by it resulting in such
Lender's receiving payment of a proportion of the aggregate amount of
40
such Revolving Loans or participations and accrued interest thereon greater than
its pro rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Revolving Loans and
subparticipations in L/C Obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
other amounts owing them, provided that:
(i) if any such participations or subparticipations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations or subparticipations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to
apply to (x) any payment made by the Borrower pursuant to and in accordance with
the express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Revolving Loans or subparticipations in L/C Obligations to any assignee or
participant, other than to the Borrower or any Subsidiary thereof (as to which
the provisions of this Section shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14. EXTENSION OF MATURITY DATE.
(a) Requests for Extension. The Borrower may, by notice to the
Administrative Agent (who shall promptly notify the Lenders), not earlier than
45 days and not later than 35 days prior to the Maturity Date then in effect
hereunder (the "Existing Maturity Date"), request that each Lender extend such
Lender's Maturity Date for an additional 364 days from the Existing Maturity
Date.
(b) Lender Elections to Extend. Each Lender, acting in its sole and
individual discretion, shall, by notice to the Administrative Agent given not
earlier than 30 days prior to the Existing Maturity Date and not later than the
date (the "Notice Date"), that is 20 days prior to the Existing Maturity Date,
advise the Administrative Agent whether or not such Lender agrees to such
extension (and each Lender that determines not to so extend its Maturity Date (a
"Non-Extending Lender") shall notify the Administrative Agent of such fact
promptly after such determination (but in any event no later than the Notice
Date) and any Lender that does not so advise the Administrative Agent on or
before the Notice Date shall be deemed to be a Non-Extending Lender. The
election of any Lender to agree to such extension shall not obligate any other
Lender to so agree.
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(c) Notification by Administrative Agent. The Administrative Agent
shall notify the Borrower of each Lender's determination under this Section no
later than the date 15 days prior to the Existing Maturity Date (or, if such
date is not a Business Day, on the next preceding Business Day).
(d) Additional Commitment Lenders. The Borrower shall have the
right on or before the Existing Maturity Date to replace each Non-Extending
Lender with, and add as "Lenders" under this Agreement in place thereof, one or
more Eligible Assignees (each, an "Additional Commitment Lender") as provided in
Section 10.13, each of which Additional Commitment Lenders shall have entered
into an Assignment and Assumption pursuant to which such Additional Commitment
Lender shall, effective as of the Existing Maturity Date, undertake a Commitment
(and, if any such Additional Commitment Lender is already a Lender, its
Commitment shall be in addition to such Lender's Commitment hereunder on such
date).
(e) Minimum Extension Requirement. If (and only if) the total of
the Commitments of the Lenders that have agreed so to extend their Maturity Date
and the additional Commitments of the Additional Commitment Lenders shall, in
the aggregate, equal or exceed $100,000,000, then, effective as of the Existing
Maturity Date, the Maturity Date of each Extending Lender and of each Additional
Commitment Lender shall be extended to the date falling 364 days after the
Existing Maturity Date (except that, if such date is not a Business Day, such
Maturity Date as so extended shall be the next preceding Business Day) and each
Additional Commitment Lender shall thereupon become a "Lender" for all purposes
of this Agreement.
(f) Conditions to Effectiveness of Extensions. Notwithstanding the
foregoing, the extension of the Maturity Date pursuant to this Section shall not
be effective with respect to any Lender unless:
(i) no Default or Event of Default shall have occurred and be
continuing on the date of such extension and after giving effect thereto;
(ii) the representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents that are qualified as
to materiality are true and correct, and such representations and warranties
which are not qualified as to materiality are true and correct in all material
respects, in each case on and as of the date of such extension and after giving
effect thereto, as though made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date); and
(iii) on the Maturity Date of each Non-Extending Lender, the
Borrower shall prepay any Revolving Loans outstanding on such date (and pay any
additional amounts required pursuant to Section 3.05) to the extent necessary to
keep outstanding Revolving Loans ratable with any revised Applicable Percentages
of the respective Lenders effective as of such date.
(g) Conflicting Provisions. This Section shall supersede any
provisions in Section 2.13 or 10.01 to the contrary.
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SECTION 2.15. INCREASE IN COMMITMENTS.
(a) Request for Increase. Provided there exists no Default, upon
notice to the Administrative Agent (which shall promptly notify the Lenders),
the Borrower may from time to time, request an increase in the Aggregate
Commitments by an amount (for all such requests) not exceeding $35,000,000;
provided that (i) any such request for an increase shall be in a minimum amount
of $5,000,000 and (ii) upon the increase of the Aggregate Commitments to a total
amount in excess of $100,000,000, Bank of America's Commitment shall be
decreased by $5,000,000. At the time of sending such notice, the Borrower (in
consultation with the Administrative Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten Business Days from the date of delivery of such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent and
the L/C Issuer (which approvals shall not be unreasonably withheld), the
Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel.
(d) Effective Date and Allocations. If the Aggregate Commitments
are increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the "Increase Effective Date") and
the final allocation of such increase. The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase and
the Increase Effective Date.
(e) Conditions to Effectiveness of Increase. As a condition
precedent to such increase, the Borrower shall deliver to the Administrative
Agent a certificate of each Loan Party dated as of the Increase Effective Date
(in sufficient copies for each Lender) signed by a Responsible Officer of such
Loan Party (i) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such increase, and (ii) in the case of the
Borrower, certifying that, before and after giving effect to such increase, (A)
the representations and warranties contained in Article V and the other Loan
Document which are qualified as to materiality are true and correct, and the
representations and warranties which are not qualified as to materiality are
true and correct in all material respects, in each case on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.15, the representations and warranties contained in subsections (a)
and (b) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and
(B) no Default exists. The Borrower shall
43
prepay any Revolving Loans outstanding on the Increase Effective Date (and pay
any additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Revolving Loans ratable with any revised
Applicable Percentages arising from any nonratable increase in the Commitments
under this Section.
(f) Conflicting Provisions. This Section shall supersede any
provisions in Sections 2.13 or 10.01 to the contrary.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.01. TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if the Borrower shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or L/C Issuer, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent, each Lender and the L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
44
(e) Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that the
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
(i) duly completed copies of Internal Revenue Service Form
W-8BEN claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form
W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank" within
the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder"
of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a
"controlled foreign corporation" described in section 881(c)(3)(C) of the Code
and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis
for claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the withholding
or deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative
Agent, any Lender or the L/C Issuer determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the L/C Issuer, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the Borrower,
upon the request of the Administrative Agent, such Lender or the L/C Issuer,
agrees to repay the
45
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or the L/C Issuer in the event the Administrative Agent, such Lender
or the L/C Issuer is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or the L/C Issuer to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.
SECTION 3.02. ILLEGALITY. If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Revolving Loans to Eurodollar Rate Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such
Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.
SECTION 3.03. INABILITY TO DETERMINE RATES. If the Required Lenders
determine that for any reason in connection with any request for a Eurodollar
Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits
are not being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such 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 Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Revolving Borrowing of Base Rate Loans in the amount specified therein.
SECTION 3.04. INCREASED COSTS.
(a) Increased Costs Generally. If any Change in Law shall
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or
46
for the account of, or credit extended or participated in by, any Lender (except
any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;
(ii) subject any Lender or the L/C Issuer to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Loan made by it, or change
the basis of taxation of payments to such Lender or the L/C Issuer in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London
interbank market any other condition, cost or expense affecting this Agreement
or Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender, or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then upon request of such Lender or the L/C Issuer, the Borrower will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the L/C Issuer
determines that any Change in Law affecting such Lender or the L/C Issuer or any
Lending Office of such Lender or such Lender's or the L/C Issuer's holding
company, if any, regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the L/C Issuer's capital or on
the capital of such Lender's or the L/C Issuer's holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the L/C Issuer, to a level below that which such Lender or
the L/C Issuer or such Lender's or the L/C Issuer's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's or
the L/C Issuer's policies and the policies of such Lender's or the L/C Issuer's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer or
such Lender's or the L/C Issuer's holding company for any such reduction
suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or
the L/C Issuer setting forth the amount or amounts necessary to compensate such
Lender or the L/C Issuer or its holding company, as the case may be, as
specified in subsection (a) or (b) of this Section and delivered to the Borrower
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
the L/C Issuer, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
47
(d) Delay in Requests. Failure or delay on the part of any Lender
or the L/C Issuer to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender's or the L/C Issuer's
right to demand such compensation, provided that the Borrower shall not be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than nine months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender's or the L/C
Issuer's intention to claim compensation therefor (except that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).
(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to
each Lender, as long as such Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (currently known as "Eurocurrency liabilities"), additional interest
on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual
costs of such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), which shall
be due and payable on each date on which interest is payable on such Loan,
provided the Borrower shall have received at least 10 days' prior notice (with a
copy to the Administrative Agent) of such additional interest from such Lender.
If a Lender fails to give notice 10 days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable 10 days from receipt of
such notice.
SECTION 3.05. COMPENSATION FOR LOSSES. Upon demand of any Lender
(with a copy to the Administrative Agent) from time to time, the Borrower shall
promptly compensate such Lender for and hold such Lender harmless from any loss,
cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.13;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank
48
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.
SECTION 3.06. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 3.04, or the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation
under Section 3.04, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, the Borrower may replace such Lender in accordance
with Section 10.13.
SECTION 3.07. SURVIVAL. All of the Borrower's obligations under this
Article III shall survive termination of the Aggregate Commitments and repayment
of all other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
SECTION 4.01. CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation
of the L/C Issuer and each Lender to make its initial Credit Extension hereunder
is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of
which shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and each of the
Lenders:
(i) executed counterparts of this Agreement and the Security
Agreement sufficient in number for distribution to the Administrative Agent,
each Lender and the Borrower;
(ii) a Revolving Note executed by the Borrower in favor of
each Lender requesting a Revolving Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible Officers of
each Loan Party as the Administrative Agent
49
may require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents to which such Loan Party is a party;
(iv) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is duly organized
or formed, and that each of the Borrower and each other Letter of Credit Obligor
is validly existing, in good standing and qualified to engage in business in
each jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
(v) a favorable opinion of (x) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, counsel to
the Borrower, OARC and Clearwater and (y) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, counsel to ▇▇▇▇▇▇ and
▇▇▇▇▇▇ Specialty, each addressed to the Administrative Agent and each Lender, as
to the matters concerning the Loan Parties and the Loan Documents as the
Required Lenders may reasonably request;
(vi) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
(vii) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that the conditions specified in Sections 4.02(a) and
(b) have been satisfied, and (B) that there has been no event or circumstance
since the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect;
(viii) a duly completed Compliance Certificate as of the last
day of the fiscal quarter of the Borrower most recently ended prior to the
Closing Date, signed by a Responsible Officer of the Borrower; and
(ix) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent, the L/C Issuer or the Required Lenders
reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall
have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall
have paid all fees, charges and disbursements of counsel to the Administrative
Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute
its reasonable estimate of such fees, charges and disbursements incurred or to
be incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Administrative Agent).
(d) The Closing Date shall have occurred on or before September 30,
2004.
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has
50
signed this Agreement shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.
SECTION 4.02. CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of
each Lender to honor any Request for Credit Extension (other than a Revolving
Loan Notice requesting only a conversion of Revolving Loans to the other Type,
or a continuation of Eurodollar Rate Loans) is subject to the following
conditions precedent:
(a) The representations and warranties of the Borrower and each
other Loan Party contained in Article V or any other Loan Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith which are qualified as to materiality shall be true and correct,
and the representations and warranties which are not qualified as to materiality
shall be true and correct in all material respects, in each case on and as of
the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.
(b) No Default shall exist, or would result from such proposed
Credit Extension or from the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer
shall have received a Request for Credit Extension in accordance with the
requirements hereof.
Each Request for Credit Extension (other than a Revolving Loan Notice
requesting only a conversion of Revolving Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed
to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
SECTION 5.01. EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH
LAWS. Each Loan Party and each Subsidiary thereof (a) is duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
and all requisite governmental licenses, authorizations, consents and approvals
to (i) own its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, (c) is
duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i), (c)
or (d), to
51
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.02. AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law. Each Loan Party and each Subsidiary thereof is in
compliance with all Contractual Obligations referred to in clause (b)(i), except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.03. GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document.
SECTION 5.04. BINDING EFFECT. This Agreement has been, and each other
Loan Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is party thereto. This Agreement constitutes,
and each other Loan Document when so delivered will constitute, a legal, valid
and binding obligation of such Loan Party, enforceable against each Loan Party
that is party thereto in accordance with its terms.
SECTION 5.05. FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries dated June 30, 2004, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 5.05
sets forth all material indebtedness and other liabilities,
52
direct or contingent, of the Borrower and its consolidated Subsidiaries as of
the date of such financial statements, including liabilities for taxes, material
commitments and Indebtedness.
(c) The Borrower has heretofore furnished to the Administrative
Agent copies of the Annual Statements of each of the Insurance Subsidiaries as
of December 31, 2003, and the Quarterly Statements of each of the Insurance
Subsidiaries as of June 30, 2004, each as filed with the relevant Insurance
Regulatory Authority (collectively, the "Historical Statutory Statements"). The
Historical Statutory Statements (including, without limitation, the provisions
made therein for investments and the valuation thereof, reserves, policy and
contract claims and statutory liabilities) have been prepared in accordance with
Statutory Accounting Practices, were in compliance with applicable Requirements
of Law when filed and present fairly the financial condition of the respective
Insurance Subsidiaries covered thereby as of the respective dates thereof and
the results of operations, changes in capital and surplus and cash flow of the
respective Insurance Subsidiaries covered thereby for the respective periods
then ended. Except for liabilities and obligations disclosed or provided for in
the Historical Statutory Statements (including, without limitation, reserves,
policy and contract claims and statutory liabilities), no Insurance Subsidiary
had, as of the date of its respective Historical Statutory Statements, any
material liabilities or obligations of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due) that, in accordance with
Statutory Accounting Practices, would have been required to have been disclosed
or provided for in such Historical Statutory Statements. All books of account of
each Insurance Subsidiary fully and fairly disclose all of its material
transactions, properties, assets, investments, liabilities, and obligations, are
in its possession and are true, correct and complete in all material respects.
(d) Since the date of the Audited Financial Statements, there has
been no event or circumstance, either individually or in the aggregate, that has
had or could reasonably be expected to have a Material Adverse Effect.
SECTION 5.06. LITIGATION. There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Borrower after due and
diligent investigation, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby, or (b) either individually or in
the aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
SECTION 5.07. NO DEFAULT. Neither the Borrower nor any Subsidiary is
in default under or with respect to any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.
SECTION 5.08. OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and
each Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
53
Adverse Effect. The property of the Borrower and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 7.01.
SECTION 5.09. INSURANCE. The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the
Borrower or the applicable Subsidiary operates, except as could reasonably be
expected to have a Material Adverse Effect.
SECTION 5.10. TAXES. The Borrower and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP or Statutory
Accounting Practices, as applicable. There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect. Except as set forth in Schedule 5.10, neither any Loan Party nor any
Subsidiary thereof is party to any tax sharing agreement.
SECTION 5.11. ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has (x) failed to meet the minimum funding
requirements of Section 412 of the Code or (y) any Unfunded Pension Liability
that could reasonably be expected to result in a Material Adverse Effect; (iii)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a
54
Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.
SECTION 5.12. SUBSIDIARIES; EQUITY INTERESTS. As of the Closing Date,
the Borrower has no Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 5.12, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.12 free
and clear of all Liens. Other than (i) stock and other instruments traded on
national exchanges and (ii) equity investments in a corporation or an entity
totaling less than 10% of outstanding Equity Interests of such corporation or
entity, the Borrower has no equity investments in any other corporation or
entity other than those specifically disclosed in Part(b) of Schedule 5.12. All
of the outstanding Equity Interests in the Borrower have been validly issued and
are fully paid and nonassessable.
SECTION 5.13. MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC
UTILITY HOLDING COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or
as one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.
Following the application of the proceeds of each Borrowing or drawing under
each Letter of Credit, not more than 25% of the value of the assets (either of
the Borrower only or of the Borrower and its Subsidiaries on a consolidated
basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to
any restriction contained in any agreement or instrument between the Borrower
and any Lender or any Affiliate of any Lender relating to Indebtedness and
within the scope of Section 8.01(e) will be margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or
any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
SECTION 5.14. DISCLOSURE. The Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other information furnished (whether in
writing or orally) by or on behalf of any Loan Party to the Administrative Agent
or any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
55
SECTION 5.15. COMPLIANCE WITH LAWS. Each of the Borrower and each
Subsidiary is in compliance in all material respects with the requirements of
all Laws (including Environmental Laws) and all orders, writs, injunctions and
decrees applicable to it or to its properties, except in such instances in which
(a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
SECTION 5.16. SOLVENT. The Borrower is, and the Borrower and its
Subsidiaries are on a consolidated basis, Solvent.
SECTION 5.17. LICENSES. Schedule 5.17 lists, with respect to each
Insurance Subsidiary, as of the Closing Date, all of the jurisdictions in which
such Insurance Subsidiary holds licenses (including, without limitation,
licenses or certificates of authority from relevant Insurance Regulatory
Authorities), permits or authorizations to transact insurance and reinsurance
business (collectively, the "Licenses"), and indicates the line or lines of
insurance in which each such Insurance Subsidiary is permitted to be engaged
with respect to each License therein listed. No License, the loss of which could
reasonably be expected to have a Material Adverse Effect, is the subject of
proceeding for suspension, revocation or limitation or any similar proceedings.
To the Borrower's knowledge, there is no sustainable basis for such a
suspension, revocation or limitation, and no such suspension, revocation or
limitation is threatened by any relevant Insurance Regulatory Authority. No
Insurance Subsidiary transacts as of the Closing Date any insurance business,
directly or indirectly, in any jurisdiction other than those listed on Schedule
5.18, where such business requires any license, permit or other authorization of
an Insurance Regulatory Authority of such jurisdiction, where such conduct could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.18. REINSURANCE AGREEMENTS.
(a) Except as set forth on Schedule F to the Annual Statements for
the Insurance Subsidiaries for the fiscal year ending December 31, 2003 as
updated by Schedule F to the June 30, 2004 financial statements, there are no
material liabilities outstanding as of the Closing Date under any Reinsurance
Agreement. (i) Each Reinsurance Agreement is in full force and effect; (ii) none
of the Insurance Subsidiaries or, to the knowledge of the Borrower, any other
party thereto, is in breach of or default under any such contract; and (iii) the
Borrower has no reason to believe that the financial condition of any other
party to any such contract is impaired such that a default thereunder by such
party could reasonably be anticipated, except to the extent in the case of
clauses (i), (ii) and (iii) immediately preceding where such failure to be in
full force or effect or such breach or default could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each
Reinsurance Agreement is qualified under all applicable Requirements of Law to
receive the statutory credit assigned to such Reinsurance Agreement in the
relevant Annual or Quarterly Statement at the time prepared, except where the
failure to be so qualified could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. Except as set forth on
Schedule 5.18, each Person to whom any of the Insurance Subsidiaries has ceded
any material liability pursuant to any Reinsurance Agreement on the Closing Date
either: (i) has a rating of "A-" or better by A.M. Best or S&P or (ii) has
56
provided collateral in favor of the applicable Insurance Subsidiary of the type
and in an amount described in Schedule 5.18.
(b) Except as set forth on Schedule 5.18, there are no Reinsurance
Agreements or Insurance Agreements between the Borrower or any of its
Subsidiaries and Affiliates (other than the Borrower and its Subsidiaries.)
(c) As of the Closing Date, no Insurance Subsidiary has any
reinsured obligations under any Surplus Relief Reinsurance Agreement.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each
Subsidiary to:
SECTION 6.01. FINANCIAL STATEMENTS. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income, comprehensive income, shareholders' equity
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, such consolidated statements to be audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any "going
concern" or like qualification or exception or any qualification or exception as
to the scope of such audit;
(b) as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal quarter, and the related consolidated statements of
income, comprehensive income, shareholders' equity and cash flows for such
fiscal quarter and for the portion of the Borrower's fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, such consolidated statements to
be certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition, results of operations, shareholders' equity and cash flows
of the Borrower and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes;
(c) upon the earlier of (i) fifteen (15) days after the regulatory
filing date or (ii) sixty-five (65) days after the end of each fiscal year, an
Annual Statement of each Insurance Subsidiary as of the end of such fiscal year
and for the fiscal year then ended, in the form filed
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with the relevant Insurance Regulatory Authority, prepared in accordance with
Statutory Accounting Practices;
(d) upon the earlier of (i) ten (10) days after the regulatory
filing date or (ii) sixty (60) days after the end of each of the first three
fiscal quarters of each fiscal year, a Quarterly Statement of each Insurance
Subsidiary as of the end of such fiscal quarter and for that portion of the
fiscal year then ended, in the form filed with the relevant Insurance Regulatory
Authority, prepared in accordance with Statutory Accounting Practices;
(e) promptly upon filing with the relevant Insurance Regulatory
Authority and in any event within ninety (90) days after the end of each fiscal
year, beginning with the fiscal year ended December 31, 2004, a copy of each
Insurance Subsidiary's "Statement of Actuarial Opinion" (or equivalent
information should the relevant Insurance Regulatory Authority not require such
a statement) as to the adequacy of such Insurance Subsidiary's loss reserves for
such fiscal year, together with a copy of its management discussion and analysis
in connection therewith, each in the format prescribed by the applicable
insurance laws of such Insurance Subsidiary's jurisdiction of domicile.
As to any information contained in materials furnished pursuant to Section
6.02(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
SECTION 6.02. CERTIFICATES; OTHER INFORMATION. Deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of the Borrower;
(b) promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Borrower by independent accountants in connection
with the accounts or books of the Borrower or any Subsidiary, or any audit of
any of them, in each case where such reports, letters or recommendations are
Material;
(c) promptly after the same are available, copies of each annual
report, proxy or financial statement or other Material report or Material
communication sent to the stockholders of the Borrower, and copies of all
annual, regular, periodic and special reports and registration statements which
the Borrower may file or be required to file with the SEC under Section 13 or
15(d) of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to the Administrative Agent pursuant hereto;
(d) promptly after the furnishing thereof, copies of any Material
statement or Material report furnished to any holder of debt securities of any
Loan Party or any Subsidiary thereof pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise
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required to be furnished to the Lenders pursuant to Section 6.01 or any other
clause of this Section 6.02;
(e) promptly, and in any event within five Business Days after
receipt thereof by any Loan Party or any Subsidiary thereof, copies of each
notice or other correspondence received from the SEC (or comparable agency in
any applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof and where
Borrower in its reasonable discretion determines that such investigation,
possible investigation or other inquiry is Material;
(f) promptly upon the sending or filing thereof, copies of any
"internal control" letter filed by or on behalf of the Borrower or any of its
Subsidiaries with any Insurance Regulatory Authority which is Material;
(g) within sixty (60) days of a request of the Administrative Agent
at the direction of the Required Lenders (which absent a showing of good cause
shall not be more often that one time during any twelve-month period), at the
Borrower's expense, an actuarial review of the liabilities and other items of
each Insurance Subsidiary prepared by an actuary or a firm of actuaries
reasonably acceptable to the Administrative Agent, such actuarial review to be
in form and substance reasonably acceptable to the Required Lenders;
(h) promptly after the same are available, all Material reports on
examination or similar Material reports, Material financial examination reports
or Material market conduct examination reports by the NAIC or any Insurance
Regulatory Authority or other Governmental Authority with respect to any
Insurance Subsidiary's insurance business, and all Material filings made under
applicable state insurance holding company acts by the Borrower or any of its
Subsidiaries, including, without limitation, filings seeking approval of
transactions with Affiliates; and
(i) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary (including,
without limitation, financial, actuarial and other information with respect to
Reinsurance Agreements), or compliance with the terms of the Loan Documents, as
the Administrative Agent or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the
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Borrower shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(a) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, "Borrower Materials") by posting the Borrower Materials on
IntraLinks or another similar electronic system (the "Platform") and (b) certain
of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a "Public Lender"). The Borrower hereby agrees that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that
the word "PUBLIC" shall appear prominently on the first page thereof; (x) by
marking Borrower Materials "PUBLIC," the Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger, the L/C Issuer and the
Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked "PUBLIC" are permitted to be made available through a portion of the
Platform designated "Public Investor;" and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor."
SECTION 6.03. NOTICES. Promptly notify the Administrative Agent and
each Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected
to result in a Material Adverse Effect, including (i) breach or non-performance
of, or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any announcement by S&P of any downward change in the Debt
Rating of Borrower;
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(e) of any announcement by A.M. Best of any downward change in the
Financial Strength Rating of any Insurance Subsidiary;
(f) of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary;
(g) the receipt by the Borrower or any of its Subsidiaries from any
Insurance Regulatory Authority or other Governmental Authority of (A) any notice
asserting any failure by the Borrower or any of its Subsidiaries to be in
compliance with applicable Requirements of Law, or that threatens the taking of
any action against the Borrower or such Subsidiary, or sets forth circumstances,
if taken or adversely determined, that would be reasonably likely to have a
Material Adverse Effect, or (B) any notice of an actual or threatened
suspension, limitation or revocation of, failure to renew, or imposition of any
restraining order, escrow or impoundment of funds in connection with, any
license, permit, accreditation or authorization of the Borrower or any of its
Subsidiaries, where such action or inaction would be reasonably likely to have a
Material Adverse Effect;
(h) the occurrence of any actual change in any insurance statute or
regulation governing the investment or dividend practices of any Insurance
Subsidiary that would be reasonably likely to have a Material Adverse Effect;
(i) (i) the occurrence of any material amendment or modification to
any Reinsurance Agreement (whether entered into before or after the Closing
Date), including any such agreements that are in a runoff mode on the Closing
Date, which amendment or modification would be reasonably likely to have a
Material Adverse Effect, or (ii) the receipt by the Borrower or any of its
Subsidiaries of any written notice of any denial of coverage, litigation, claim
or arbitration arising out of any Reinsurance Agreement to which it is a party
which would reasonably be likely to have a Material Adverse Effect; or
(j) any judicial or administrative order limiting or controlling the
insurance business of any Insurance Subsidiary (and not the insurance industry
generally) which has been issued or adopted and which has had, or which could
reasonably be expected to have, a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
SECTION 6.04. PAYMENT OF OBLIGATIONS. Pay and discharge as the same
shall become due and payable, all its obligations and liabilities, including (a)
all tax liabilities, assessments and governmental charges or levies upon it or
its properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP or Statutory Accounting Practices, as the case may be, are being
maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if
unpaid, would by law become a Lien upon its property unless the same are being
contested in good faith by
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appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP or Statutory Accounting Practices, as the case may be, are being
maintained by the Borrower or such Subsidiary other than Liens arising pursuant
to ERISA; and (c) all Indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
SECTION 6.05. PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
SECTION 6.06. MAINTENANCE OF PROPERTIES. Maintain, preserve and
protect all of its material properties and equipment necessary in the operation
of its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; provided that this Section shall not prevent the
Borrower or any Subsidiary from discontinuing the operation and the maintenance
of any of its properties if such discontinuance is desirable in the conduct of
its business and the Borrower has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 6.07. MAINTENANCE OF INSURANCE. Maintain with financially
sound and reputable insurance companies not Affiliates of the Borrower,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons.
SECTION 6.08. COMPLIANCE WITH LAWS. Comply in all material respects
with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.09. BOOKS AND RECORDS. (a) Maintain proper books of record
and account, in which full, true and correct entries in conformity with GAAP or
Statutory Accounting Practices, as the case may be, consistently applied shall
be made of all financial transactions and matters involving the assets and
business of the Borrower or such Subsidiary, as the case may be; and (b)
maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
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SECTION 6.10. INSPECTION RIGHTS. Permit representatives and agents of
the Administrative Agent and each Lender, at the Administrative Agent's or
Lender's expense (but at the Borrower's expense after the occurrence and during
the continuance of an Event of Default), to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and employees and, with the prior written
consent of the Borrower prior to the occurrence and continuance of an Event of
Default (which consent shall not be unreasonably withheld), the independent
public accountants of the Borrower, all at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, that when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective
representatives or agents) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
SECTION 6.11. USE OF PROCEEDS. Use the proceeds of (i) the Credit
Extensions for general corporate purposes not in contravention of any Law or of
any Loan Document and (ii) Letters of Credit to support reinsurance liabilities.
SECTION 6.12. DIVIDENDS. Take all action necessary to cause its
Subsidiaries to make such dividends, distributions, or other payments to the
Borrower as shall be necessary for the Borrower to make payments of the
Obligations. In the event the approval of any Governmental Authority or other
Person is required in order for any such Subsidiary to make any such dividends,
distributions or other payments to the Borrower, or for the Borrower to make any
such principal or interest payments, the Borrower will forthwith exercise its
best efforts and take all actions permitted by law and necessary to obtain such
approval.
SECTION 6.13. OWNERSHIP OF INSURANCE SUBSIDIARIES. Cause each of its
Insurance Subsidiaries which has a net capital worth in excess of $10,000,000 to
remain at all times a Wholly Owned Subsidiary of the Borrower, except as
expressly permitted otherwise by Section 7.04.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
SECTION 7.01. LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01
and any renewals or extensions thereof, provided that (i) the property covered
thereby is not changed, (ii) the amount secured or benefited thereby is not
increased, (iii) the direct or any contingent obligor with respect thereto is
not changed, and (iv) any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);
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(c) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing appeal or
other surety bonds related to such judgments;
(i) Liens consisting of deposits made by an Insurance Subsidiary
with the Insurance Regulatory Authority in its jurisdiction of domicile or other
statutory Liens or claims imposed or required by applicable insurance Law or
regulation against the assets of any Insurance Subsidiary, in each case in favor
of all policyholders of such Insurance Subsidiary and in the ordinary course of
such Insurance Subsidiary's business;
(j) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into the Borrower or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Borrower or any Subsidiary at the time such property is so acquired (whether or
not the Indebtedness secured thereby shall have been assumed), provided that no
such Lien shall have been created or assumed in contemplation of such
consolidation or merger or such Person's becoming a Subsidiary or such
acquisition of property;
(k) Liens entered into in the ordinary course of business of a
Subsidiary's reinsurance business with respect to trust agreements; and
(l) Liens (other than Liens specified in clauses (a) through (k)
above) on other than stock of any Insurance Subsidiary securing other
Obligations of the Borrower and its Subsidiaries not to exceed $10,000,000 in
aggregate at any one time outstanding.
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SECTION 7.02. INVESTMENTS. Make any Investments in (a) Fairfax, ▇▇▇▇
& ▇▇▇▇▇▇▇, Northbridge Financial or their respective Affiliates and Subsidiaries
(other than the Borrower and its Subsidiaries) or (b) debt and equity securities
of Fairfax, ▇▇▇▇ & ▇▇▇▇▇▇▇, Northbridge Financial or their respective Affiliates
and Subsidiaries (other than the Borrower and its Subsidiaries), other than (i)
Investments listed on Schedule 7.02, (ii) existing and future Investments in
investment trusts, hedge funds and other investment vehicles managed by Fairfax
or any of its Affiliates and (iii) Investments in investment vehicles where
Affiliates of Fairfax are co-investors.
SECTION 7.03. INDEBTEDNESS. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on
Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof;
provided that (i) the amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal or extension except by an amount equal
to a reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate;
(c) Indebtedness of any Wholly Owned Subsidiary of the Borrower to
the Borrower or to another Wholly Owned Subsidiary and of the Borrower to any
Wholly Owned Subsidiary;
(d) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a "market view;" and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) the Private Placement Debt;
(f) the Convertible Debt;
(g) obligations entered into in the ordinary course of business of a
Subsidiary's reinsurance business with respect to trust agreements; and
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(h) other unsecured Indebtedness, provided that no Default or Event
of Default would exist at the time of the incurrence thereof and after giving
effect thereto.
SECTION 7.04. MERGER; CONSOLIDATION; DISPOSITION OF ASSETS.
(a) Liquidate, wind up or dissolve, enter into any consolidation,
merger or other combination, or sell, assign, lease, convey, transfer,
assumption reinsure or otherwise dispose of (whether in one or a series of
transactions) any of its assets to any Person (except that a Subsidiary of the
Borrower may (x) merge or consolidate with, or sell, assign, lease, convey,
transfer, or otherwise dispose of (whether in one or a series of transactions)
assets to the Borrower or a Subsidiary of the Borrower and (y) sell, assign,
lease, convey, transfer, or otherwise dispose of all of its assets in compliance
with the provisions of Sections 7.04(b) or 7.04(c) below).
(b) Except as permitted under Sections 7.04(a) or 7.04(c) below,
sell, assign, lease, convey, transfer, assumption reinsure or otherwise dispose
of (whether in one or a series of transactions) any of its assets (an "Asset
Disposition") unless (i) in the good faith opinion of the Borrower, the Asset
Disposition is in exchange for consideration having a Fair Market Value at least
equal to that of the property exchanged and is in the best interest of the
Borrower or such Subsidiary; (ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would exist; and (iii) immediately
after giving effect to the Asset Disposition, the Fair Market Value of all
property that was the subject of any Asset Disposition occurring in the then
current fiscal year of the Borrower would not exceed 10% of Consolidated Net
Worth as of the then most recently ended fiscal year of the Borrower; provided,
however, that notwithstanding the foregoing, the Borrower and its Subsidiaries,
in the ordinary course of business, may sell, assign, lease, convey, transfer,
or otherwise dispose of, (i) inventory held for sale, (2) equipment, fixtures,
supplies or materials no longer required in the operation of the business of the
Borrower or any of its Subsidiaries or that is obsolete or (3) securities in the
investment portfolios of the Borrower or its Subsidiaries.
(c) Notwithstanding the foregoing, any Subsidiary may merge or
consolidate with, or sell or otherwise dispose of assets to, another Subsidiary
or the Borrower so long as (i) the surviving transferee corporation is the
Borrower or a Wholly Owned Subsidiary and (ii) immediately after giving effect
thereto, no Default or Event of Default would exist.
(d) Except as otherwise set forth in this Section 7.04, the Borrower
will not, and will not permit or cause any of its Insurance Subsidiaries to
sell, or otherwise dispose of, any capital stock of any Insurance Subsidiary
which has a net capital worth in excess of $10,000,000.
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SECTION 7.05. RESTRICTED PAYMENTS. Declare or make any dividend
payment, or make any other distribution of cash, property or assets, in respect
of any of its capital stock or any warrants, rights or options (other than
employee stock options) to acquire its capital stock, or purchase, redeem,
retire or otherwise acquire for value any shares of its capital stock or any
warrants, rights or options to acquire its capital stock, or set aside funds for
any of the foregoing, except that:
(a) each Wholly Owned Subsidiary may declare and make dividend
payments or other distributions to the Borrower or another Wholly Owned
Subsidiary to the extent permitted under applicable Requirements of Law and, as
to the Insurance Subsidiaries, by each relevant Insurance Regulatory Authority;
and
(b) so long as no Default or Event of Default exists or would result
therefrom, the Borrower may make dividends, payments, distributions,
acquisition, purchases, retirements or redemptions in an aggregate amount during
any fiscal year not to exceed the lesser of (i) 20% of Consolidated Net Income
for such fiscal year and (ii) 50% of Consolidated Net Worth at the end of such
fiscal year; provided however in no event shall dividends and distributions to
Fairfax during any fiscal year exceed $20,000,000 in aggregate amount.
The Borrower will not, and will not permit or cause any of its Subsidiaries to,
make (or give any notice in respect of) any voluntary or optional payment or
prepayment on any Indebtedness or, directly or indirectly, make any redemption
(including pursuant to any change of control provision), retirement, defeasance
or other acquisition for value of any Indebtedness, or make any deposit or
otherwise set aside funds for any of the foregoing purposes; provided, however,
the Borrower and its Subsidiaries may voluntarily prepay, voluntarily redeem,
voluntarily retire, voluntarily defease or voluntarily acquire for value any
Indebtedness so long as no Default or Event of Default exists or would result
therefrom.
SECTION 7.06. CHANGE IN NATURE OF BUSINESS. Engage to any substantial
degree in any business other than the lines of property and casualty insurance
or reinsurance business and other businesses engaged in by the Borrower and its
Subsidiaries on the date hereof or a business reasonably related thereto.
SECTION 7.07. TRANSACTIONS WITH AFFILIATES. Enter into any material
transaction with any officer, director, stockholder or other Affiliate of the
Borrower or any Subsidiary, except in the ordinary course of its business and
upon fair and reasonable terms that are no less favorable to it than it would
obtain in a comparable arm's length transaction with a Person other than an
Affiliate of the Borrower or such Subsidiary; provided, however, that nothing
contained in this Section shall prohibit:
(a) transactions described on Schedule 7.07 or otherwise expressly
permitted hereunder; and
(b) the payment by Borrower of reasonable and customary fees to
members of its board of directors.
SECTION 7.08. CERTAIN AMENDMENTS. (a) Amend, modify or waive, or
permit the amendment, modification or waiver of, any provision of any agreement
or instrument evidencing
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or governing any Indebtedness or (b) amend or modify its articles or certificate
of incorporation or bylaws, in each case under clauses (a) and (b) other than
any amendments or modifications that could not reasonably be expected to affect
the Lenders adversely.
SECTION 7.09. BURDENSOME AGREEMENTS. Create or otherwise cause or
suffer to exist or become effective any restriction or encumbrance on (a) the
ability of the Borrower and its Subsidiaries to perform and comply with their
respective obligations under the Loan Documents, (b) the ability of the Borrower
or any Subsidiary to grant, assume or permit to exist any Lien upon any of its
assets or properties as security, directly or indirectly, for the Obligations,
other than the restrictions set forth in the Loan Documents, or (c) the ability
of any Subsidiary to make payments or other distributions in respect of its
capital to the Borrower or any other Subsidiary, or make transfers to the
Borrower or any other Subsidiary, in each case, other than as existing under or
by reason of the Loan Documents or applicable Requirements of Law.
SECTION 7.10. USE OF PROCEEDS. Use the proceeds of any Credit
Extension, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.
SECTION 7.11. FISCAL YEAR. Permit or cause any of its Insurance
Subsidiaries to, change the ending date of its fiscal year to a date other than
December 31.
SECTION 7.12. PARI PASSU. Make, create, assume, or suffer to exist
any Lien to secure any Indebtedness, or Contingent Obligations to support any
Indebtedness, except as specifically permitted under Section 7.01 or Section
7.03, unless the Obligations shall be secured and supported on a pari passu
basis in form satisfactory to the Required Lenders.
SECTION 7.13. REINSURANCE AGREEMENTS. Permit or cause any of its
Insurance Subsidiaries to be or become a party to any Reinsurance Agreements
(excluding any retrocession agreement and any Reinsurance Agreement with respect
to which the reinsurer's obligations thereunder are fully-secured) with any
reinsurer not rated "A-" or better by A.M. Best or S&P except (a) as listed on
Schedule 5.18 (and only in amounts presently existing as listed on such
Schedule) with a lower rating so listed on the date hereof, but not less than
such listed rating and (b) additional amounts of up to 10% of ceded premiums in
any fiscal year.
SECTION 7.14. FINANCIAL COVENANTS.
(a) MAXIMUM TOTAL DEBT TO CAPITALIZATION RATIO. Permit the Total
Debt to Capitalization Ratio to exceed 0.30 to 1.0 at any time.
(b) MINIMUM STATUTORY SURPLUS. Permit the Statutory Surplus to be
less than $1,000,000,000.
(c) MINIMUM RISK-BASED CAPITAL. Permit the ratio of (i) "total
adjusted capital" (within the meaning of the Risk-Based Capital for Insurers
Model Act as promulgated by the NAIC as of the date hereof (the "Model Act")) of
OARC to (ii) 2 times the "Authorized Control Level Risk-Based Capital" (within
the meaning of the Model Act) of OARC to be less than one
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hundred fifty percent (150%), as of the last day of any fiscal quarter,
beginning with the fiscal quarter ending September 30, 2004.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT. Any of the following shall
constitute an Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any Loan
or any L/C Obligation, or (ii) within three days after the same becomes due, any
interest on any Loan or on any L/C Obligation, or any fee due hereunder, or
(iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe
any term, covenant or agreement contained in any of Section 6.03, 6.05, 6.10, or
6.11 or Article VII (other than Section 7.13); or
(c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith which is qualified as to
materiality shall be incorrect or misleading, and any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein which is not qualified as to materiality
shall be incorrect or misleading in all material respects, in each case when
made or deemed made; or
(e) Cross-Default. (i) The Borrower or any Subsidiary fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $25,000,000 and such failure continues after
the applicable notice or grace period, if any, specified in the relevant
document or (ii) the Borrower or any Subsidiary fails to observe or perform any
other agreement or condition relating to any such Indebtedness or such Guarantee
or contained in any instrument or agreement evidencing, securing or relating
thereto and such failure continues after the applicable notice or grace period,
if any, specified in the relevant document, or (iii) any other event occurs, the
effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay,
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defease or redeem such Indebtedness to be made, prior to its stated maturity, or
such Guarantee to become payable, or cash collateral in respect thereof to be
demanded, in excess of such amount; or (iv) there occurs under any Swap Contract
an Early Termination Date (as defined in such Swap Contract) resulting from (A)
any event of default under such Swap Contract as to which the Borrower or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Borrower or such Subsidiary as a
result thereof is greater than $25,000,000; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against the Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding 5% of Consolidated Net Worth that is not stayed,
discharged or paid within 20 days after entry thereof (to the extent not covered
by independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 20 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $5,000,000; or
(j) Invalidity of Loan Documents. Any material provision of any
Loan Document, at any time after its execution and delivery and for any reason
other than as expressly permitted
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hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or any Loan Party or any other Person contests
in any manner the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or rescind
any provision of any Loan Document; or
(k) Loss of Licenses. Any Governmental Authority revokes, fails to
renew or suspends any License of the Borrower or any Insurance Subsidiary, which
revocation, failure or suspension has had or could reasonably be expected to
have a Material Adverse Effect, or the Borrower or any Insurance Subsidiary for
any reason loses any License which loss had had or could reasonably be expected
to have a Material Adverse Effect, or the Borrower or any Insurance Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any License which imposition has or could reasonably be expected to
have a Material Adverse Effect; or
(l) Adverse Order. Any Insurance Subsidiary shall be the subject of
a final non-appealable order imposing a fine in an amount in excess of
$10,000,000 in any single instance or other such orders imposing fines in excess
of $25,000,000 in the aggregate after the date of this Agreement by or at the
request of any state insurance regulatory agency as a result of the violation by
such Insurance Subsidiary of such state's applicable insurance Laws or the
regulations promulgated in connection therewith; or
(m) Ratings Downgrade. The S&P Debt Rating of the Borrower falls
below BB or the A.M. Best Financial Strength Rating for OARC falls below B+; or
(n) L/C Collateral. The face amount of any Secured Letter of Credit
exceeds the L/C Collateral Balance for such Secured Letter of Credit for a
period of (14) days or more; or
(o) Change of Control. There occurs any Change of Control.
SECTION 8.02. REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
(other than an Event of Default pursuant to Section 8.01(n)) occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
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(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender;
provided, further, if any Event of Default pursuant to Section 8.01(n) occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(i) require that the Borrower Cash Collateralize the L/C Obligations
in respect of such Secured Letter of Credit (in an amount equal to the
difference between then Outstanding Amount thereof and the L/C Collateral
Balance for such Secured Letter of Credit); and
(ii) liquidate all or any part of the L/C Collateral for such Secured
Letter of Credit.
SECTION 8.03. APPLICATION OF FUNDS. After the exercise of remedies
provided for in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.02),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders and the L/C Issuer (including fees, charges and disbursements of
counsel to the respective Lenders and the L/C Issuer and amounts payable under
Article III), ratably among them in proportion to the amounts described in this
clause Second payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, L/C Borrowings and other Obligations,
ratably among the Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders and
the L/C Issuer in proportion to the respective amounts described in this clause
Fourth held by them;
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Fifth, to the Administrative Agent for the account of the L/C Issuer,
to Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT AND AUTHORITY.
Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank
of America to act on its behalf as the Administrative Agent hereunder and under
the other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent, the Lenders, and the L/C
Issuer, and neither the Borrower nor any of the other Letter of Credit Obligors
shall have rights as a third party beneficiary of any of such provisions.
SECTION 9.02. RIGHTS AS A LENDER. The Person serving as the
Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.
SECTION 9.03. EXCULPATORY PROVISIONS.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or
73
by the other Loan Documents that the Administrative Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel,
may expose the Administrative Agent to liability or that is contrary to any Loan
Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower, any of its
Affiliates or any of the Letter of Credit Obligors that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary, or as
the Administrative Agent shall believe in good faith shall be necessary, under
the circumstances as provided in Sections 10.01 and 8.02 or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Letter of Credit Obligor, a Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
SECTION 9.04. RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Loan or the issuance of such
Letter of Credit. The Administrative Agent may
74
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
SECTION 9.05. DELEGATION OF DUTIES.
The Administrative Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
SECTION 9.06. RESIGNATION OF ADMINISTRATIVE AGENT.
The Administrative Agent may at any time give notice of its resignation
to the Lenders, the L/C Issuer and the Borrower. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a
successor Administrative Agent meeting the qualifications set forth above;
provided that if the Administrative Agent shall notify the Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent's resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or
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omitted to be taken by any of them while the retiring Administrative Agent was
acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to
this Section shall also constitute its resignation as L/C Issuer. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, (a)
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer, (b) the retiring L/C
Issuer shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangement
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit.
SECTION 9.07. ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender and the L/C Issuer acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
SECTION 9.08. NO OTHER DUTIES, ETC. Anything herein to the contrary
notwithstanding, none of the Bookrunners or Arrangers listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as
Administrative Agent, a Lender or the L/C Issuer hereunder.
SECTION 9.09. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower or
any Letter of Credit Obligor) shall be entitled and empowered, by intervention
in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
L/C Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
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(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment
or composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent to any
departure by the Borrower or any other Loan Party therefrom, shall be effective
unless in writing signed by the Required Lenders and the Borrower or the
applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and each 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 amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.02) without the written consent
of such Lender;
(c) postpone 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 without
the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second
proviso to this Section 10.01) any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any obligation of the Borrower to pay interest or Letter of Credit Fees
at the Default Rate;
(e) change Section 2.13 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
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(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; or
(g) (i) release any of the L/C Collateral for any Secured Letter of
Credit (other than pursuant to the exercise of remedies pursuant to the second
proviso of Section 8.02), (ii) change the definition of "Collateral Coverage
Percentage", or (iii) waive any Event of Default pursuant to Section 8.01(n),
without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (iii) Section 10.06(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such amendment, waiver or other
modification; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
SECTION 10.02. NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, any Letter of Credit Obligor, the
Administrative Agent or the L/C Issuer, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02; and
(ii) if to any other Lender, to the address, telecopier
number, electronic mail address or telephone number specified in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
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(b) Electronic Communications. Notices and other communications to
the Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to
Article II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent, the Borrower or
any Letter of Credit Obligor may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) Change of Address, Etc. Each of the Borrower, any Letter of
Credit Obligor, the Administrative Agent and the L/C Issuer may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto. Each other Lender may change
its address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrower, each Letter of Credit Obligor, the
Administrative Agent and the L/C Issuer.
(d) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Revolving Loan Notices)
purportedly given by or on behalf of the Borrower or any Letter of Credit
Obligor even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower and each Letter of Credit
Obligor shall indemnify the Administrative Agent, the L/C Issuer, each Lender
and the Related Parties of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower or such Letter of Credit
Obligor. All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.
SECTION 10.03. NO WAIVER; CUMULATIVE REMEDIES. No failure by any
Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by
any such Person in exercising, 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
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or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 10.04. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrower (and each Letter of Credit
Obligor, to the extent related to any Letter of Credit issued for the account of
such Letter of Credit Obligor) shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), in connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the L/C Issuer in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the L/C Issuer (including the fees, charges
and disbursements of any counsel for the Administrative Agent, any Lender or the
L/C Issuer), in connection with the enforcement or protection of its rights (A)
in connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) Indemnification by the Borrower. The Borrower (and each Letter
of Credit Obligor, to the extent related to any Letter of Credit issued for the
account of such Letter of Credit Obligor) shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each
Related Party of any of the foregoing Persons (each such Person being called an
Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN
PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE
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NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee's obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Borrower or
any Letter of Credit Obligor for any reason fails to indefeasibly pay any amount
required under subsection (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related
Party of any of the foregoing, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent), the L/C Issuer or such Related
Party, as the case may be, such Lender's Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or the L/C Issuer in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such
sub-agent) or L/C Issuer in connection with such capacity. The obligations of
the Lenders under this subsection (c) are subject to the provisions of Section
2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Borrower and each Letter of Credit Obligor
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee
referred to in subsection (b) above shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be payable
not later than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent and the L/C Issuer, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
SECTION 10.05. PAYMENTS SET ASIDE. To the extent that any payment by
or on behalf of the Borrower or any Letter of Credit Obligor is made to the
Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent,
the L/C Issuer or any Lender exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently
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invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent,
the L/C Issuer or such Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor
Relief Law 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
setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees
to pay to the Administrative Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect. The obligations of the Lenders and the L/C Issuer under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.
SECTION 10.06. SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
neither the Borrower nor any Letter of Credit Obligor may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) or (i) of this
Section, or (iv) to an SPC in accordance with the provisions of subsection (h)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Assignment by Lenders. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations) at the time owing to it); provided that
(i) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if
the Commitment is not then in effect, the principal outstanding balance of the
Loans of the assigning Lender subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so
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long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed);
(ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent and the L/C Issuer unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, and the Eligible Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided that no processing and recordation fee shall be required
for an assignment from a Lender to an Affiliate of that Lender.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower and each Letter of Credit Obligor, shall
maintain at the Administrative Agent's Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, each Letter of Credit Obligor, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each of the Borrower, each Letter of Credit Obligor
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice. In addition, at any time that a request for a consent for a
material or substantive change to the Loan Documents is pending, any Lender
wishing to consult with other Lenders in connection therewith may request and
receive from the Administrative Agent a copy of the Register.
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(d) Participations. Any Lender may at any time, without the consent
of, or notice to, the Borrower, any Letter of Credit Obligor or the
Administrative Agent, sell participations to any Person (other than a natural
person or the Borrower or any of the Borrower's Affiliates or Subsidiaries)
(each, a "Participant") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans (including such Lender's participations in L/C Obligations)
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, each Letter of Credit Obligor, the Administrative Agent, the Lenders
and the L/C Issuer shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower and each Letter of Credit Obligor agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's and each Letter of Credit Obligor's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
and each Letter of Credit Obligor is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower and
each Letter of Credit Obligor, to comply with Section 3.01(e) as though it were
a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any
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applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the
New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent, the Borrower and each Letter of Credit Obligor (an "SPC")
the option to provide all or any part of any Revolving Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Revolving Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Revolving Loan, the Granting
Lender shall be obligated to make such Revolving Loan pursuant to the terms
hereof, or if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower or any Letter of Credit Obligor under this Agreement
(including its obligations under Section 3.04), (ii) no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement for which a
Lender would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder. The
making of a Revolving Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Revolving Loan were made
by such Granting Lender. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent, assign all
or any portion of its right to receive payment with respect to any Revolving
Loan to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Revolving Loans to any rating
agency, commercial paper dealer or provider of any surety or Guarantee or credit
or liquidity enhancement to such SPC.
(i) Resignation as L/C Issuer after Assignment. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank
of America may, upon 30 days' notice to the Borrower, the Letter of Credit
Obligors, and the Lenders, resign as L/C Issuer. In the event of any such
resignation as L/C Issuer, the Borrower shall be entitled to appoint from among
the Lenders a successor L/C Issuer hereunder; provided, however, that no failure
by the Borrower to appoint any such successor shall affect the resignation of
Bank of America as L/C Issuer. If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Revolving Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
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SECTION 10.07. TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates' and to its and its
Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and shall have agreed to keep such Information confidential
substantially in accordance with this Section 10.07), (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the NAIC), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the prior written consent
of the Borrower and each Letter of Credit Obligor or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender,
the L/C Issuer or any of their respective Affiliates on a nonconfidential basis
from a source other than the Borrower or a Letter of Credit Obligor.
For purposes of this Section, "Information" means all information
received from the Borrower, any Letter of Credit Obligor or any Subsidiary
relating to the Borrower, any Letter of Credit Obligor or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower, any Letter of Credit
Obligor or any Subsidiary, provided that, in the case of information received
from the Borrower or any Subsidiary after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.08. RIGHT OF SET-OFF. If an Event of Default shall have
occurred and be continuing, each Lender, the L/C Issuer and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or for the
credit or the account of the Borrower or any Letter of Credit Obligor against
any and all of the obligations of the Borrower or such Letter of Credit Obligor
now or hereafter existing under this Agreement or any other Loan Document to
such Lender or the L/C Issuer, irrespective of whether or not such Lender or the
L/C Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower or such Letter of Credit
Obligor may be contingent or unmatured or are owed to a branch or office of such
Lender or the L/C Issuer different from the branch or office holding such
deposit or obligated on such indebtedness. The
86
rights of each Lender, the L/C Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the L/C Issuer or their respective Affiliates may
have. Each Lender and the L/C Issuer agrees to notify the Borrower or any Letter
of Credit Obligor, as the case may be, and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
SECTION 10.09. INTEREST RATE LIMITATION. Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower or Letter of Credit
Obligor, as the case may be. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Lender exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.
SECTION 10.10. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 10.11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
SECTION 10.12. SEVERABILITY. If any provision of this Agreement or
the other Loan Documents is held to be illegal, invalid or unenforceable, (a)
the legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith
87
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.13. REPLACEMENT OF LENDERS. If any Lender requests
compensation under Section 3.04, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, if any Lender is a Defaulting Lender or if
any other circumstance exists hereunder that gives the Borrower the right to
replace a Lender as a party hereto, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in, and consents required by, Section
10.06), all of its interests, rights and obligations under this Agreement and
the related Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment),
provided that:
(a) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans and L/C Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
SECTION 10.14. GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN
PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK SITTING IN
NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
88
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 10.15. WAIVER JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
89
SECTION 10.16. USA PATRIOT ACT NOTICE. Each Lender that is subject to
the Act (as hereinafter defined) and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance
with the Act.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
90
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ODYSSEY RE HOLDINGS CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President & Chief
Financial Officer
ODYSSEY AMERICA REINSURANCE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President & Chief
Operating Officer
CLEARWATER INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President & Chief
Operating Officer
▇▇▇▇▇▇ INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President & Chief
Financial Officer
S-1
▇▇▇▇▇▇ SPECIALTY INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President & Chief
Financial Officer
---------------------------------
S-2
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
S-3
BANK OF AMERICA, N.A., as a Lender,
and L/C Issuer
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Managing Director
---------------------------------
S-4
JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
S-5
CITIZENS NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
S-6
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Managing Director
---------------------------------
S-7
DISCLOSURE SCHEDULE TO
CREDIT AGREEMENT
This Disclosure Schedule has been prepared in connection with the
Credit Agreement, dated as of September ___, 2004 among
Odyssey Re Holdings
Corp., as the Borrower, Bank of America, N.A., as Administrative Agent and L/C
Issuer, the other Lenders party thereto and Bank of America Securities LLC, as
Sole Lead Arranger and Sole Book Manager (the "
Credit Agreement"). Unless
otherwise defined in this Disclosure Schedule, all capitalized terms used herein
shall have the meanings ascribed to them in the
Credit Agreement.
This Disclosure Schedule is qualified in its entirety by reference to
specific provisions of the
Credit Agreement, and is not intended to constitute,
and shall not be construed as constituting, representations or warranties of the
any or all of the Loan Parties except as and to the extent provided in the
Credit Agreement. Inclusion of information herein shall not be construed as an
admission that such information is material to the business, assets, financial
condition or operations of the Borrower or any of the other Loan Parties.
Headings have been inserted on the sections of the Disclosure Schedule
for convenience of reference only and shall to no extent have the effect of
amending or changing the express description of the sections as set forth in the
Credit Agreement. The annexes or exhibits to any particular section of this
Disclosure Schedule form an integral part of this Disclosure Schedule and are
incorporated by reference for all purposes as if set forth fully herein.
SCHEDULE 2.01
COMMITMENTS
AND APPLICABLE PERCENTAGES
LENDER COMMITMENT APPLICABLE PERCENTAGE
--------------------------------------------------------------------------------
Bank of America, N.A. $35,000,000 38.888888889%
JPMorgan Chase Bank $25,000,000 27.777777778%
Citizens National Bank $20,000,000 22.222222222%
11.111111111%
PNC Bank $10,000,000
Total $90,000,000 100.000000000%
1
SCHEDULE 5.10
TAX SHARING AGREEMENTS
1. Tax Allocation Agreement, dated as of June 19, 2001 and as amended, by
and between Fairfax Inc.,
Odyssey Re Holdings Corp., Odyssey America Reinsurance
Corporation, Clearwater Insurance Company and ▇▇▇▇▇▇ Insurance Company.
2. Tax Allocation Agreement, dated as of October 28, 2003, between
Odyssey
Re Holdings Corp. and ▇▇▇▇▇▇ Specialty Insurance Company (f/k/a General Security
Indemnity Company).
SCHEDULE 5.12
SUBSIDIARIES AND OTHER EQUITY INVESTMENTS
a. Subsidiaries of the Borrower
Odyssey America Reinsurance Corporation Connecticut
Clearwater Insurance Company Delaware
▇▇▇▇▇▇ Insurance Company Delaware
▇▇▇▇▇▇ Specialty Insurance Company
New York
O.R.E. Holdings Limited Mauritius
Odyssey UK Holdings Corp. Delaware
Newline Holdings UK Limited U.K.
Newline Underwriting Management Limited U.K.
Newline Corporate Name Limited U.K.
Newline Underwriting Limited U.K.
▇▇▇▇▇▇ Holdings UK Limited U.K.
▇▇▇▇▇▇ Corporate Name Limited U.K.
▇▇▇▇▇▇ Underwriting Limited U.K.
▇▇▇▇▇▇ Underwriting Management Limited U.K.
Odyssey Holdings Latin America, Inc. Delaware
Odyssey Latin America, Inc. Delaware
Odyssey Servicios Limitada Chile
Odyssey Services, SA de CV Mexico
First Capital Insurance Limited (97.7%) Singapore
b. Equity Interests of the Borrower
1. Clearwater Insurance Company owns 47.42% of the Class 1 common
stock of TRG Holding Corporation, a Delaware corporation ("TRG
Holding"). TRG Holding owns 100% of the capital stock of The
Resolution Group, Inc., a Delaware corporation ("TRG"). TRG owns
100% of the capital stock of Envision Claims Management
Corporation, a New Jersey Corporation, and Resolution Reinsurance
Services Corporation, a Delaware corporation ("RRSC"). RRSC owns
100% of the capital stock of St. John's Insurance Company
Limited, a Bermuda company.
2. Odyssey America Reinsurance Corporation and Clearwater Insurance
Company each own 7.51% of the capital stock of Advent Capital
(Holdings) PLC (United Kingdom).
3. O.R.E. Holdings Limited owns 45% of the capital stock of ▇▇▇▇▇▇
Enterprises Private Limited (India).
4. Odyssey America and Clearwater together own a majority (56.19%)
of the Class A shares of HWIC Asia Fund (Mauritius), representing
45.97% of the total voting power of all Classes of HWIC Asia Fund
shares. None of the Class B, C and D shares are held by ORH,
Odyssey America, Clearwater, or other ORH companies. The voting
rights of the Class A, B, C and D Shares are identical.
5. Clearwater owns 4,115,065 shares, or 13.6%, of the common stock
of Hub International Limited, with a book/adjusted carrying value
and fair value of $63,451,009 as of December 31, 2003.
SCHEDULE 5.17
LICENSES
See attached 20 pages.
ODYSSEY AMERICA REINSURANCE CORPORATION
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Miscellaneous Casualty, including
Official Surety Bonds, Marine
Alaska Health, Property, Casualty (all clauses), Surety,
Marine, Wet Marine, Transportation
Arizona Casualty w/o Workers' Compensation, Disability,
Marine and Transportation, Property, Surety,
Vehicle
Arkansas Property, Casualty, Surety, Marine and Disability
California Fire, Marine, Surety, Plate Glass Liability,
Workers' Compensation, Sprinkler, Automobile,
Miscellaneous
Canada Limited to the business of Reinsurance: Property,
Accident & Sickness, Aircraft, Automobile, Boiler
and Machinery, Hail, Legal Expense, Liability
Insurance
Colorado Accident & Health, Fidelity & Surety, General
Property, Motor Vehicle (Casualty), Professional
Malpractice, Crop, General Casualty, Mortgage
Guaranty, Motor Vehicle (Property), Workers'
Compensation
Connecticut Fire, Extended Coverage, Other Allied Lines,
Homeowners Multiple Peril, Commercial Multiple
Peril, Earthquake, Growing Crops, Ocean Marine,
Inland Marine, Accident and Health, ▇▇▇▇▇▇▇'▇
Compensation, Liability other than Auto (B.I. and
P.D.), Auto Liability (B.I. and P.D.), Auto
Physical Damage, Aircraft (all perils), Fidelity
and Surety, Glass, Burglary and Theft, Boiler and
Machinery, Reinsurance
Delaware Health, Property, Marine & Transportation,
Casualty (including: Vehicle, Liability, Burglary
& Theft, Personal Property Floater, Glass, Boiler
& Machinery, Credit, Leakage & Fire Extinguisher
Equipment, Malpractice, Elevator, Congenital
Defects, Livestock, Entertainments and
Miscellaneous
District of Columbia Aircraft (all perils), all other A & H, Allied
Lines, Boiler and Machinery, Burglary and Theft,
Collectively Renewable A & H, Commercial Auto
Physical Damage, Commercial Multiple Peril
(Non-Liability), Credit, Credit A & H (Group &
Individual), Earthquake, Farmowners Multiple
Peril, Fidelity, Fire, Glass, Group Accident and
Health, Guaranteed Renewable A & H, Homeowners
Multiple Peril, Inland Marine, Medical
Malpractice, Non-Cancellable A & H, Non-renewable
for Stated Reasons Only, Ocean Marine, Other
Commercial Auto Liability, Other Liability, Other
Private Passenger Auto Liability, Private
Passenger Auto Physical Damage, Property and
Casualty, Surety, Workers' Compensation
Florida Allied Lines, Commercial Auto Physical Damage,
Commercial Automobile Liability, Commercial Multi
Peril, Fire, Medical Malpractice, Other Liability,
PPA Physical Damage, Private Passenger Auto
Liability, Workers' Compensation
Georgia Property, Marine and Transportation, Casualty
(including Workers' Compensation), Surety
Hawaii Casualty, Marine, Property, Surety
Idaho Casualty (including Workers' Compensation),
Surety, Marine and Transportation, Property
Illinois Class 2 - Casualty, Fidelity, Surety (Accident and
Health, Vehicle, Liability, Workers' Compensation,
Burglary and Forgery, Glass, Fidelity and Surety,
Miscellaneous
Class 3 - Fire, Marine, Etc. (Fire, Elements,
Marine and Transportation, Vehicle, Property
Damage, Sprinkler Leakage and Crop, Other Fire and
Marine Risks
Indiana Class 2 - Accident & Health, Employer's Liability,
Burglary & Theft, Glass, Boiler & Machinery, Motor
Vehicle, Water Damage, Liability, Credit, Title,
Fidelity and Surety (excluding bail bonds),
Miscellaneous, Legal Expenses
Class 3 - Property, Crops, Leakage and Fire
Extinguisher Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied Lines,
Homeowners Multiple Peril (incl. B.I.), Commercial
Multiple Peril, Earthquake, Growing Crops, Ocean
Marine, Inland Marine, Accident Only (Individual),
Accident and Health (Individual), Hospital and
Medical Expense (Individual), Group Accident and
Health, Non-Cancellable Accident and Health,
Workers' Compensation, Liability other than Auto
(B.I.), Liability other than Auto (P.D.), Auto
Liability (B.I.), Auto Liability (P.D.), Auto
Physical Damage, Aircraft Physical Damage,
Fidelity, Surety, Glass, Burglary and Theft,
Boiler and Machinery
Kansas Fire, Windstorm & Hail, Extended Coverage,
Additional Perils on Growing Crops, Hail on
Growing Crops, Optional Perils, Sprinkler Leakage,
Business Interruption, Earthquake, Water Damage,
Aircraft Hull, Ocean Marine, Inland Marine, Rain,
Automobile, Physical Damage, Flood, Homeowners
Policies, Accident & Health, Automobile Liability,
General Liability, Workers' Compensation,
Fidelity, Surety & Forgery Bonds, Glass, Burglary,
Theft & Robbery, Boiler & Machinery, Credit,
Malpractice Liability, Livestock Mortality,
Aircraft Liability, Cargo Liability
Kentucky Property, Casualty Surety, Marine and
Transportation Insurance
Louisiana Health and Accident, Vehicle, Liability, Burglary
and Forgery, Worker's Compensation, Glass,
Fidelity and Surety, Fire and Extended Coverage,
Steam Boiler and Sprinkler Leakage, Crop and
Livestock, Marine and Transportation (Inland
Marine), Miscellaneous
Maine Medial Malpractice
Maryland Casualty (not including Vehicle Liability,
Mortgage Guaranty & Workers' Compensation),
Health, Marine, Wet Marine and Transportation,
Property and Marine (excluding Wet Marine and
Transportation), Surety, Vehicle Liability,
Workers' Compensation
Massachusetts Fire, Burglary, Robbery, Theft, Livestock, Repair-
Replacement, Inland Marine Only, Fidelity and
Surety, Reinsurance except Life, Nuclear Energy,
Special Hazards, Comprehensive M.V. & Aircraft,
Boiler (No Inspector), Liability other than Auto,
Auto Liability, Glass, Water Damage and Sprinkler
Leakage, Elevator Damage and Collision
Michigan Disability, Property, Ocean Marine, Inland Marine,
Legal Expense, Automobile Insurance - limited,
Casualty: Steam Boiler, Flywheel & Machinery,
Casualty: Liability, Casualty: Workers'
Compensation, Casualty: Automobile, Casualty:
Plate Glass, Casualty: Sprinkler & Water Damage,
Casualty: Credit, Casualty: Burglary and Theft,
Casualty: Livestock, Casualty: Malpractice, Surety
& Fidelity
Minnesota Fire, Inland and Ocean Marine, Personal Property
Floater, Boiler & Machinery, Accident & Health,
Workers' Compensation, Fidelity & Surety, Glass,
Burglary & Theft, Security & Drafts, Water Damage,
Livestock, Credit, Automobile, General Liability,
Elevator
Mississippi Fire and Allied Lines, Industrial Fire,
Casualty/Liability, Fidelity, Surety, Workers'
Compensation, Boiler and Machinery, Plate Glass,
Trip Accident and Baggage, Inland Marine, Ocean
Marine, Legal, Auto Phy. Damage/Liab, Guaranty
Missouri Qualified Reinsurer
Montana Disability, Property, Casualty, Surety, Marine
Nebraska Sickness and Accident Insurance, Property
Insurance, Glass Insurance, Burglary and Theft
Insurance, Boiler and Machinery Insurance,
Liability Insurance, Workers' Comp. and Employer's
Liability, Vehicle Insurance, Fidelity Insurance,
Surety Insurance, Credit Insurance, Marine
Insurance, Miscellaneous Insurance
Nevada Health, Property, Casualty, Surety, Marine &
Transportation
New Hampshire Limited to Reinsurance (Accident & Health,
Property & Casualty)
New Jersey Fire and Allied Lines, Earthquake, Growing Crops,
Ocean Marine, Inland Marine, Automobile Liability
(BI), Automobile Liability (PD), Automobile
Physical Damage, Aircraft Physical Damage, Other
Liability, Boiler & Machinery, Fidelity & Surety,
Credit, Burglary & Theft, Glass, Sprinkler Leakage
& Water Damage, Livestock, Smoke or Smudge,
Physical Loss to Buildings, Radioactive
Contamination, Mechanical Breakdown/Power Failure
New Mexico Property, Marine and Transportation, Casualty,
Surety, Vehicle
New York Accident and Health, Fire, Miscellaneous Property,
Water Damage, Burglary and Theft, Glass, Boiler
and Machinery, Elevator, Animal, Collision,
Personal Injury Liability, Property Damage
Liability, Workers' Compensation and Employer's
Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and
Inland Marine, Marine Protection and Indemnity
Insurance
North Carolina Fire Insurance: Fire, Miscellaneous Property
(extended coverage and growing crops), Water
Damage (including sprinkler leakage - Commercial &
Residential), Burglary and Theft, Glass, Marine
(Inland and Ocean)
Casualty Insurance: Boiler and Machinery,
Elevator, Animal, Collision (Automobile and
Other), Personal Injury Liability (Automobile and
Other), Property Damage Liability (Automobile and
Other),Workmen's Compensation & Employer's
Liability, Fidelity and Surety, Motor Vehicle and
Aircraft (Property Damage, Fire, Theft,
Compensation, Collision), Marine Protections and
Indemnity
North Dakota Accident & Health, Casualty, Property
Ohio Aircraft, Allied Lines, Boiler & Machinery,
Burglary & Theft, Commercial Auto - Liability,
Commercial Auto - No Fault, Commercial Auto -
Phys. Damage, Credit, Credit Accident & Health,
Earthquake, Fidelity, Financial Guaranty, Fire,
Glass, Group Accident & Health, Inland Marine,
Medical Malpractice, Multiple Peril - Commercial,
Multiple Peril - Farmowners, Multiple Peril -
Homeowners, Ocean Marine, Other Liability, Private
Passenger Auto - Liability, Private Passenger
Auto-Other, Private Passenger - Phys. Damage,
Surety, Workers' Compensation
Oklahoma Accident & Health, Property, Casualty, Marine,
Surety, Vehicle
Oregon Property, Casualty (including Workers'
Compensation), Marine and Transportation, Surety,
Health
Pennsylvania Accident & Health, Boiler and Machinery, Credit,
Fidelity and Surety, Inland Marine and Physical
Damage, Mine and Machinery, Other Liability,
Property and Allied Lines, Worker's Compensation,
Auto Liability, Burglary and Theft, Elevator,
Glass, Livestock, Ocean Marine, Personal Property
Floater, Water Damage
Puerto Rico Disability, Property, Marine and Transportation,
Vehicle, Casualty and Surety Reinsurance
Exclusively
Rhode Island Fire, Accident and Health, Ocean marine, Inland
marine, Fidelity, Liability, Plate Glass, Boiler
and Machinery, Burglary, Credit, Automobile,
Engine, Elevator, Miscellaneous
South Carolina Property, Casualty, Surety, Marine
South Dakota Fire & Allied Lines, Inland & Ocean Marine,
Worker's Compensation, Bodily Injury (No Auto),
Property Damage (No Auto), Bodily Injury (Auto),
Property Damage (Auto), Physical Damage (Auto),
Fidelity & Surety Bonds, Glass, Burglary & Theft,
Boiler & Machinery, Aircraft, Credit (Mortgage
Guaranty), Crop Hail, Livestock, Travel Accident
and Baggage, Pre-Paid Legal, Bail Bonds
Tennessee Property, Vehicle, Casualty, Surety
Texas Fire, Allied Coverages, Hail-growing crops only,
Rain, Inland Marine, Ocean Marine,
Aircraft-liability & physical damage, Accident,
Health, Employer's Liability,
Automobile--liability & physical damage, Liability
other than Automobile, Fidelity & Surety, Glass,
Burglary & Theft, Forgery, Boiler & Machinery,
Credit, Livestock, Reinsurance on all lines
authorized to be written on a direct basis
Utah Disability, Property, Surety, Liability (including
veh., excl. dis), Marine & Transport, Workers'
Compensation, Vehicle Liability, Professional
Liability (encl. Med. Mal.)
Vermont Health
Virginia Accident and Sickness, Fire, Miscellaneous
Property, Inland Marine, Workers'
Compensation-Employer, Liability Other than Auto,
Automobile Liability, Automobile Physical Damage,
Fidelity, Surety, Glass, Burglary and Theft,
Boiler & Machinery, Credit, Home Protection
Washington Disability, Property, Marine and Transportation,
Vehicle, General Casualty, Surety
West Virginia Accident and Sickness, Fire, Marine, Casualty,
Surety
Wisconsin Fire, Inland Marine, and other Property Insurance,
Ocean Marine Insurance, Disability Insurance,
Liability and Incidental Medical Expense
Insurance, Automobile and Aircraft Insurance,
Fidelity Insurance, Surety Insurance, Credit
Insurance, Worker's Compensation Insurance, Legal
Expense Insurance, Credit Unemployment Insurance,
Miscellaneous
Wyoming Multiple Lines
U.S. Treasury Can do direct writing and can be used as a
reinsurer
CLEARWATER INSURANCE COMPANY
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Miscellaneous Casualty, including
Official Surety Bonds
Alaska Health, Property, Casualty (all clauses), Surety,
Marine, Wet Marine & Transportation
Arizona Casualty w/o Workers' Compensation, Disability,
Marine and Transportation, Property, Surety,
Vehicle
Arkansas Reinsurance Basis Only - Property, Casualty,
Marine
California Fire, Marine, Surety, Disability, Plate Glass,
Liability, Workers' Compensation, Common Carrier
Liability, Boiler and Machinery, Burglary, Credit,
Sprinkler, Team and Vehicle, Automobile, Aircraft
and Miscellaneous
Colorado Accredit Non-admitted Reinsurer
Connecticut Reinsurance Only
Delaware Health, Property, Surety, Marine & Transportation,
Casualty (including - Vehicle, Liability, Burglary
& Theft, Personal Property Floater, Glass, Boiler
& Machinery, Credit, Workmens' Compensation &
Employers Liability, Leakage & Fire Extinguishing
Equipment, Malpractice, Elevator, Congenital
Defects, Livestock, Entertainments, Miscellaneous)
District of Columbia Allied Lines, Boiler and Machinery, Burglary and
Theft, Commercial Auto No-fault (PIP), Commercial
Auto Physical Damage, Commercial Multiple Peril
(Non-Liability), Earthquake, Farmowners Multiple
Peril, Fire, Glass, Homeowners Multiple Peril,
Inland Marine, Medical Malpractice, Ocean Marine,
Other Commercial Auto Liability, Other Liability,
Other Private Passenger Auto Liability, Private
Passenger Auto Physical Damage, Property and
Casualty, Surety, Workers' Compensation
Florida Accredit Reinsurer
Georgia Property, Marine and Transportation, Casualty
(including Workers' Compensation), Surety
Hawaii Accredit Reinsurer
Idaho Property, Marine & Transportation, Casualty
(excludes Worker's Compensation), Surety
Illinois Class 2 - Casualty, Fidelity & Surety (Accident &
Health, Vehicle, Liability, Workmen's
Compensation, Burglary & Forgery, Glass, Fidelity
& Surety, Miscellaneous, Other Casualty Risk,
Contingent Losses)
Class 3 - Fire and Marine, Etc. (Fire, Elements,
War, Riot and Explosion, Marine and
Transportation, Vehicle, Property Damage,
Sprinkler Leakage and Crop, Other Fire and Marine
Risks, Contingent Losses
Indiana Class 2 - Accident and Health, Employer's
Liability, Burglary & Theft, Glass, Boiler &
Machinery, Motor Vehicle, Water Damage, Liability,
Credit, Title, Fidelity and Surety (excluding Bail
Bonds), Miscellaneous
Class 3 - Property, Crops, Leakage and Fire
Extinguisher Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied Lines,
Homeowners Multiple Peril (incl. B.I.), Commercial
Multiple Peril, Earthquake, Growing Crops, Ocean
Marine, Inland Marine, Accident Only (Individual),
Accident and Health (Individual), Hospital and
Medical Expense (Individual), Group Accident and
Health, Non-Cancellable Accident and Health,
Workers' Compensation, Liability other than Auto
(B.I.), Liability other than Auto (P.D.), Auto
Liability (B.I.), Auto Liability (P.D.), Auto
Physical Damage, Aircraft Physical Damage,
Fidelity, Surety, Glass, Burglary and Theft,
Boiler and Machinery
Kansas Reinsurance Only - Fire, Windstorm & Hail,
Extended Coverage, Hail on Growing Crops, Optional
Perils, Sprinkler Leakage, Business Interruption,
Earthquake, Water Damage, Aircraft Hull, Ocean
Marine, Inland Marine, Rain, Automobile Physical
Damage, Flood, Homeowners Policies, Accident &
health, Automobile Liability, General Liability,
Workers' Compensation, Fidelity, Surety & Forgery
Bonds, Glass, Burglary, Theft & Robbery, Boiler &
Machinery, Credit, Malpractice Liability,
Livestock Mortality, Aircraft Liability, Cargo
Liability
Kentucky Accredited Reinsurer
Louisiana Health and Accident, Vehicle, Liability, Worker's
Compensation, Burglary and Forgery, Glass, Fire
and Extended Coverage, Steam Boiler and Sprinkler
Leakage, Crop and Livestock, Marine and
Transportation (Inland Marine), Miscellaneous
Maine Accredited for Reinsurance (Not "Approved
Reinsurer")
Maryland Non-admitted Accepted Reinsurance Carrier
Massachusetts Approved Reinsurer
Michigan Property, Ocean Marine, Inland Marine, Automobile
Insurance - limited
Casualty: Steam Boiler, Flywheel & Machinery,
Casualty: Liability, Casualty: Workers'
Compensation, Casualty: Automobile, Casualty:
Plate Glass, Casualty: Sprinkler and Water Damage,
Casualty: Credit, Casualty: Burglary and Theft,
Casualty: Livestock, Casualty: Malpractice,
Casualty: Misc-Other, Disability coverage
supplemental to Auto Insurance, Surety & Fidelity
Minnesota Accredit Reinsurer Property
Mississippi Fire and Allied Lines, Industrial Fire, Casualty,
Fidelity, Surety, Workers' Compensation, Boiler
and Machinery, Plate Glass, Inland Marine, Ocean
Marine, Accident & Health, Auto Phy. Damage and
Liability
Missouri Qualified Reinsurer
Montana Property, Casualty, Surety, Marine
Nebraska Sickness and Accident Insurance, Property
Insurance, Glass Insurance, Burglary and Theft
Insurance, Boiler and Machinery Insurance,
Liability Insurance, Liability Insurance, Workers'
Compensation & Employer's Liability, Vehicle
Insurance, Fidelity Insurance, Surety Insurance,
Credit Insurance, Marine Insurance, Miscellaneous
Insurance
Nevada Reinsurance Only - Property
New Hampshire Limited to Reinsurance - Accident and Health,
Property and Casualty
New Jersey Reinsurance Only - Fire and Allied Lines,
Earthquake, Growing Crops, Ocean Marine, Inland
Marine, Workers' Compensation & Employers'
Liability, Automobile Liability (BI), Automobile
Liability (PD), Automobile Physical Damage,
Aircraft Physical Damage, Other Liability, Boiler
& Machinery, Fidelity & Surety, Credit, Burglary &
Theft, Glass, Sprinkler Leakage & Water Damage,
Livestock, Smoke or Smudge, Physical Loss to
Buildings, Radioactive Contamination, Accident and
Health
New Mexico Accredit Reinsurer
New York Accident and Health, Fire, Miscellaneous Property,
Water Damage, Burglary and Theft, Glass, Boiler
and Machinery, Elevator, Animal, Collision,
Personal Injury Liability, Property Damage
Liability, Workers' Compensation and Employer's
Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and
Inland Marine, Marine Protection and Indemnity
Insurance, Special Risk
North Carolina Fire, Miscellaneous Property (extended coverage
and growing crops), Water Damage (including
sprinkler leakage - Commercial & Residential),
Burglary and Theft, Glass, Boiler and Machinery,
Elevator, Animal, Collision (Automobile and
Other), Personal Injury Liability (Automobile and
Other), Property Damage Liability (Automobile and
Other), Workmen's Compensation and Employer's
Liability, Fidelity and Surety Insurance, Credit
Insurance, Motor Vehicle and Aircraft (Property
Damage, Fire, Theft, Compensation, Collision),
Marine Insurance (Inland and Ocean), Marine
Protection and Indemnity Insurance, Aircraft
Voluntary Settlement, Hole-in-One
North Dakota Accredited Reinsurer
Ohio Aircraft, Allied Lines, Boiler & Machinery,
Burglary & Theft, Commercial Auto - Liability,
Commercial Auto - No Fault, Commercial Auto -
Phys. Damage, Credit, Earthquake, Fidelity,
Financial Guaranty, Fire, Glass, Inland Marine,
Medical Malpractice, Multiple Peril - Commercial,
Multiple Peril - Farmowners, Multiple Peril -
Homeowners, Ocean Marine, Other Liability, Private
Passenger Auto - Liability, Private Passenger
Auto-Other, Private Passenger - Phys. Damage,
Surety, Workers' Compensation
Oklahoma Accident & Health, Property, Casualty, Marine,
Vehicle, Surety
Oregon Property, Casualty (Including Worker's
Compensation), Marine and Transportation, Surety
Pennsylvania Accident and Health, Boiler and Machinery, Credit,
Fidelity and Surety, Inland Marine and Physical
Damage, Mine and Machinery, Other Liability,
Property and Allied Lines, Worker's Compensation,
Auto Liability, Burglary and Theft, Elevator,
Glass Livestock, Ocean marine, Personal Property
Floater, Water Damage
Puerto Rico Reinsurance Exclusively - Disability, Property,
Marine and Transportation, Vehicle, Casualty,
Surety
Rhode Island Property, Casualty, Surety
South Carolina Approved Unlicensed Reinsurer - Accident/Health,
Property, Casualty, Surety, Marine
South Dakota Qualified Reinsurer
Tennessee Property, Casualty, Surety
Texas Fire, Allied Coverages, Hail-growing crops only,
Rain, Inland Marine, Ocean Marine, Aircraft -
Liability & Physical Damage, Accident, Health,
Workers' Compensation & Employers' Liability,
Employers' Liability, Automobile - Liability &
Physical Damage, Liability other than Automobile,
Fidelity & Surety, Glass, Burglary & Theft,
Forgery, Boiler & Machinery, Reinsurance on all
lines authorized to be written on a direct basis
Utah Accident & Health, Property, Surety, Vehicle
Liability, Liability, Marine & Transport, Workers'
Compensation, Professional Liability
Vermont Accredit Reinsurer
Virginia Fire, Miscellaneous Property, Farm Multiple Peril,
Homeowners Multiple Peril, Commercial Multiple
Peril, Ocean Marine, Inland Marine, Workers
Compensation - Employer, Liability Other than
Auto, Automobile Liability, Automobile Physical
Damage, Aircraft Liability, Air Physical Damage,
Fidelity, Surety, Glass, Burglary and Theft,
Boiler & Machinery, Credit Animal, Water Damage
Washington Disability, Property, Marine & Transportation,
Vehicle, General Casualty, Surety
West Virginia Fire, Marine, Casualty, Surety
Wisconsin Fire, Inland Marine, and other Property Insurance,
Ocean Marine Insurance, Disability Insurance,
Liability and Incidental Medical Expense
Insurance, Automobile Insurance, Fidelity
Insurance, Surety Insurance, Credit Insurance,
Worker's Compensation Insurance, Miscellaneous,
Aircraft Insurance
Wyoming Accredit Reinsurer
U.S. Treasury Can be Direct Writer or Reinsurer
▇▇▇▇▇▇ INSURANCE COMPANY
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
Alabama Property, Miscellaneous Casualty, including
Official Surety Bonds
Alaska Property, Casualty (all clauses), Surety, Marine,
Wet Marine and Transportation
Arizona Casualty w/o Workers' Compensation, Marine and
Transportation, Property, Vehicle
Arkansas Property, Casualty (including Workers'
Compensation), Surety and Marine
California Fire, Marine, Surety, Disability, Plate Glass,
Liability, Workers' Compensation, Common Carrier
Liability, Boiler and Machinery, Burglary, Credit,
Sprinkler, Team and Vehicle, Automobile, Aircraft
and Miscellaneous
Colorado General Property, Credit (Casualty, Accident &
Health), Fidelity and Surety, Motor Vehicle
(Property), Workers' Compensation, Crop, General
Casualty, Motor Vehicle (Casualty), Professional
Malpractice
Connecticut Liability other than Auto (B.I. and P.D.), Auto
Liability (B.I. and P.D.), Auto Physical Damage
Delaware Property, Surety, Marine & Transportation,
Casualty (including: Vehicle, Liability, Burglary
& Theft, Personal Property Floater, Glass, Boiler
& Machinery, Credit, Workers' Compensation &
Employers' Liability, Leakage & Fire Extinguisher
Equipment, Malpractice, Elevator, Congenital
Defects, Livestock, Entertainments and
Miscellaneous
District of Columbia Aircraft (all Perils), Allied Lines, Boiler and
Machinery, Burglary and Theft, Commercial Auto
No-fault (PIP), Commercial Auto Physical Damage,
Commercial Multiple Peril (Non-Liability),
Earthquake, Farmowners Multiple Peril, Fidelity,
Fire, Glass, Homeowners Multiple Peril, Inland
Marine, Liability-Claims Made, Medical
Malpractice-Claims Mad, Medical
Malpractice-Occurrence, Ocean Marine, Other
Liability-Occurrence, Private Passenger Auto
No-fault (PIP), Private Passenger Auto Physical
Damage, Products Liability, Property and Casualty,
Surety, Workers' Compensation
Florida Fire, Allied Lines, Farmowners Multi Peril,
Homeowners Multi Peril, Commercial Multi Peril,
Inland Marine, Earthquake, Workers; Compensation,
Other Liability, Private Passenger Auto Liability,
Commercial Auto Liability, Private Passenger Auto
Physical Damage, Commercial Auto Physical Damage,
Glass, Burglary and Theft, Boiler and Machinery,
Industrial Fire, Industrial Extended Coverage
Georgia Property, Marine and Transportation, Casualty
(including Workers' Compensation), Surety
Hawaii Accident and Health or Sickness, Casualty, Marine,
Property, Surety, Vehicle
Idaho Casualty (including Workers' Compensation),
Surety, Marine and Transportation, Property
Illinois Class 2 - Casualty, Fidelity, Surety (Accident and
Health, Vehicle, Liability, Workers' Compensation,
Burglary and Forgery, Glass, Fidelity and Surety,
Miscellaneous, Other Casualty Risks, Contingent
Losses Livestock and Domestic Animals, Legal
Expense Insurance)
Class 3 - Fire, Marine, Etc. (Fire, Elements, War,
Riot and Explosion, Marine and Transportation,
Vehicle, Property Damage, Sprinkler Leakage and
Crop, Other Fire and Marine Risks, Contingent
Losses, Legal Expense Insurance
Indiana Class 2 - Employer's Liability, Burglary & Theft,
Glass, Boiler & Machinery, Motor Vehicle, Water
Damage, Liability, Credit, Fidelity and Surety
(excluding bail bonds), Miscellaneous, Legal
Expenses
Class 3 - Property, Crops, Leakage and Fire
Extinguisher Equipment, Inland Marine
Iowa Fire, Extended Coverage, Other Allied Lines,
Homeowners Multiple Peril (incl. B.I.), Commercial
Multiple Peril, Earthquake, Growing Crops, Ocean
Marine, Inland Marine, Accident Only (Individual),
Accident and Health (Individual), Hospital and
Medical Expense (Individual), Group Accident and
Health, Non-Cancellable Accident and Health,
Workers' Compensation, Liability other than Auto
(B.I.), Liability other than Auto (P.D.), Auto
Liability (B.I.), Auto Liability (P.D.), Auto
Physical Damage, Aircraft Physical Damage,
Fidelity, Surety, Glass, Burglary and Theft,
Boiler and Machinery
Kansas Eligible Non-Admitted insurer
Kentucky Property, Surety, Casualty (no limitations)
Louisiana Vehicle, Liability, Homeowners, Fire and Extended
Coverage
Maryland Casualty (not including Vehicle Liability,
Mortgage Guaranty & Workers' Compensation),
Marine, Wet Marine and Transportation, Property
and Marine (excluding Wet Marine and
Transportation), Surety, Vehicle Liability,
Workers' Compensation
Massachusetts Fire, Inland Marine Only, Boiler, Workers'
Compensation, Auto Liability, Glass, Water Damage
and Sprinkler Leakage, Elevator Property Damage
and Collision, Burglary, Robbery, Theft,
Repair-Replacement, Stock Companies (Extension of
Coverage), Comprehensive M.V. & Aircraft, Personal
Property Floater, Dwellings, Commercial Property
Michigan Property, Ocean Marine, Inland Marine, Casualty:
Steam Boiler, Flywheel & Machinery, Casualty:
Liability, Casualty: Workers' Compensation,
Casualty: Automobile, Casualty: Plate Glass,
Casualty: Sprinkler & Water Damage, Casualty:
Burglary and Theft, Casualty: Livestock, Casualty:
Malpractice, Casualty: Misc-Other, Disability
coverage supplemental to Auto Insurance, Surety &
Fidelity
Mississippi Fire and Allied Lines, Industrial Fire,
Casualty/Liability, Fidelity, Surety, Workers'
Compensation, Boiler and Machinery, Plate Glass,
Trip Accident and Baggage, Inland Marine, Ocean
Marine, Accident & Health, Legal, Auto Phy.
Damage/Liab, Aircraft, Home/Farm Owners
Missouri Liability, Miscellaneous, Property
Montana Property, Casualty, Surety, Marine
Nebraska Property Insurance, Credit Property, Glass
Insurance, Burglary and Theft Insurance Boiler and
machinery Insurance, Liability Insurance, Workers'
Comp. and Employer's Liability, Vehicle Insurance,
Fidelity Insurance, Surety Insurance, Credit
Insurance, Marine Insurance, Miscellaneous
Insurance
Nevada Property, Surety, Marine and Transportation,
Casualty (including Workmen's Compensation)
New Hampshire Restricted to Servicing Existing Business Only,
Limited to Reinsurance (Accident & Health,
Property & Casualty)
New Jersey Fire and Allied Lines, Earthquake, Growing Crops,
Ocean Marine, Inland Marine, Workers' Compensation
& Employers' Liability, Automobile Liability (BI),
Automobile Liability (PD), Automobile Physical
Damage, Aircraft Physical Damage, Other Liability,
Boiler & Machinery, Fidelity & Surety, Credit,
Burglary & Theft, Glass, Sprinkler Leakage & Water
Damage, Livestock, Smoke or Smudge, Physical Loss
to Buildings, Radioactive Contamination,
Mechanical Breakdown/Power Failure
New Mexico Property, Marine and Transportation, Casualty,
Surety, Vehicle
New York Accident and Health, Fire, Miscellaneous Property,
Water Damage, Burglary and Theft, Glass, Boiler
and Machinery, Elevator, Animal, Collision,
Personal Injury Liability, Property Damage
Liability, Workers' Compensation and Employer's
Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and
Inland Marine, Marine Protection and Indemnity
Insurance
North Carolina Fire Insurance: Fire, Miscellaneous Property
(extended coverage and growing crops), Water
Damage (including sprinkler leakage - Commercial &
Residential), Burglary and Theft, Glass, Marine
(Inland and Ocean)
Casualty Insurance: Boiler and Machinery,
Elevator, Animal, Collision (Automobile and
Other), Personal Injury Liability (Automobile and
Other), Property Damage Liability (Automobile and
Other), Motor Vehicle and Aircraft (Property
Damage, Fire, Theft, Compensation, Collision),
Marine Protections and Indemnity, Miscellaneous
(Aircraft Voluntary Settlement, Hole-in-One)
North Dakota Casualty, Property
Ohio Aircraft, Allied Lines, Boiler & Machinery,
Burglary & Theft, Commercial Auto - Liability,
Commercial Auto - No Fault, Commercial Auto -
Phys. Damage, Credit, Earthquake, Fidelity,
Financial Guaranty, Fire, Glass, Inland Marine,
Medical Malpractice, Multiple Peril - Commercial,
Multiple Peril - Farmowners, Multiple Peril -
Homeowners, Ocean Marine, Other Liability, Private
Passenger Auto - Liability, Private Passenger
Auto-Other, Private Passenger - Phys. Damage,
Surety, Workers' Compensation
Oklahoma Property, Casualty, Marine, Surety, Workers' Comp.
Oregon Property, Casualty (including Workers'
Compensation), Marine and Transportation, Surety
Pennsylvania Auto Liability, Burglary and Theft, Elevator,
Glass, Livestock, Ocean Marine, Personal Property
Floater, Water Damage, Boiler & Machinery, Credit,
Fidelity and Surety, Inland Marine and Physical
Damage, Mine and Machinery, Other Liability,
Property and Allied Lines, Worker's Compensation
Rhode Island All line of insurance except life, annuities,
accident & health, title and mortgage guaranty
South Carolina Property, Casualty
South Dakota Fire & Allied Lines, Inland & Ocean Marine,
Worker's Compensation, Bodily Injury (No Auto),
Property Damage (No Auto), Bodily Injury (Auto),
Property Damage (Auto), Physical Damage (Auto),
Fidelity & Surety Bonds, Glass, Burglary & Theft,
Boiler & Machinery, Aircraft, Credit (Mortgage
Guaranty), Crop Hail, Livestock
Texas Air Physical Damage, Aircraft Liability, Allied
Coverages, Auto Liability, Auto Physical Damage,
Boiler & Machinery, Burglary & Theft, Credit,
Employers' Liability, Fidelity & Surety, Fire,
Forgery, Glass, Hail, Inland Marine, Liability
Other, Livestock, Ocean Marine, Pre-Paid Legal
Services, Rain, Reinsurance - all lines, W.C.
Empl. Liability
Utah Property, Surety, Liability (including veh., excl.
dis), Marine & Transport, Workers' Compensation,
Vehicle Liability
Virginia Fire, Miscellaneous Property, Homeowners Multiple
Peril, Commercial Multiple Peril, Inland Marine,
Liability Other than Auto, Automobile Liability,
Automobile Physical Damage, Boiler & Machinery
Washington Property, Marine and Transportation, Vehicle,
General Casualty, Surety
West Virginia Fire, Marine, Casualty, Surety
Wisconsin Fire, Inland Marine, and other Property Insurance,
Ocean Marine Insurance, Liability and Incidental
Medical Expense Insurance, Automobile and Aircraft
Insurance, Fidelity Insurance, Surety Insurance,
Miscellaneous
Virgin Islands Property and Casualty
▇▇▇▇▇▇ SPECIALTY INSURANCE COMPANY
CERTIFICATES OF AUTHORITY
STATE LINES AUTHORIZED TO WRITE
----- -------------------------
New York Accident and Health, Fire, Miscellaneous Property,
Water Damage, Burglary and Theft, Glass, Boiler
and Machinery, Elevator, Animal, Collision,
Personal Injury Liability, Property Damage
Liability, Workers' Compensation and Employers'
Liability, Fidelity and Surety, Credit, Motor
Vehicle and Aircraft Physical Damage, Marine and
Inland Marine and Marine Protection and Indemnity
Insurance
SCHEDULE 7.01
EXISTING LIENS
1. During the second quarter of ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pledged Pound
Sterling 110 million of U.S. treasury notes and placed them on
deposit at Lloyd's of London on behalf of Advent Capital
(Holdings) PLC ("Advent"). Advent is 46.8% owned by Fairfax
Financial , including 15.0% by ORH (7.51% by Odyssey America and
7.51% by Clearwater). Odyssey America retains the right to
withdraw the funds at Lloyd's at any time upon 180 days advance
written notice. The placement of funds at Lloyd's will
automatically terminate effective December 31, 2008.
SCHEDULE 7.03
EXISTING INDEBTEDNESS
Guarantees
1. Clearwater agreed to allow Ranger Insurance Company ("Ranger"), a
subsidiary of Fairfax, to attach an assumption of liability endorsement to
Ranger's policies issued from July 1, 1999 to April 30, 2004 where required.
Clearwater has terminated the agreement effective April 30, 2004. Clearwater
remains liable for any losses occurring prior to the effective date of the
termination, pursuant to the terms of the endorsements. While Clearwater's
potential exposure in connection with these endorsements is not reasonably
quantifiable at this time, Clearwater deems it to be immaterial, as Fairfax has
agreed to indemnify Clearwater for any obligation under this agreement.
Clearwater anticipates that Ranger will meet all of its obligations in the
normal course of business, and Clearwater does not anticipate making any
payments under this guarantee that would require Clearwater to utilize the
indemnification from Fairfax.
2. As of July 14, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agreed to guarantee the performance
of all of the insurance and reinsurance contract obligations, whether incurred
before or after the agreement, of Compagnie Transcontinentale de Reassurance
("CTR"), an affiliate, in the event CTR became insolvent and CTR was not
otherwise indemnified under its guarantee agreement with a Fairfax affiliate.
This guarantee was entered into as part of the redeployment of CTR's business to
Odyssey America and was terminated effective December 31, 2001. While Odyssey
America's potential exposure in connection with this guarantee is not reasonably
quantifiable at this time, Odyssey America deems it to be immaterial, as Fairfax
has agreed to indemnify Odyssey America for all obligations under this
guarantee.
3. Odyssey America agreed, as of April 1, 2002, to guarantee the prompt
payment of all of the insurance contract obligations, whether incurred before or
after the agreement, of Falcon Insurance Company (Hong Kong) Limited, an
affiliate, in the event that Falcon becomes insolvent. Fairfax has agreed to
indemnify Odyssey America for any obligation under this agreement. Odyssey
America anticipates that Falcon will meet all of its obligations in the normal
course of business and does not anticipate making any payments under this
guarantee that will require Odyssey America to utilize the indemnification from
Fairfax.
4. In January 2004, in conjunction with the purchase by its subsidiary
(O.R.E Holdings) of a 45% interest in ▇▇▇▇▇▇ Enterprises Private Limited
("CEPL"), an Indian limited liability company, Odyssey America agreed to provide
a guarantee on behalf of CEPL to facilitate CEPL's establishment of a credit
facility in the amount of US$65 million. The guarantee is conditioned upon a
pledge in favor of Odyssey America by the other shareholders of CEPL of assets
with an aggregate value 1.5 times the amount of the guarantee. CEPL is in the
final stages of arranging the credit facility under which it will
borrow. In an interim step, US$17 million was loaned in August 2004 by Odyssey
America to a downstream affiliate of CEPL, which amount will be fully repaid
upon receipt by CEPL of the borrowed funds. Under the currently proposed terms,
the lender will have primary recourse against Odyssey America, with a secondary
recourse to
Odyssey Re Holdings Corp., under the guarantee. The credit facility
will have an initial term of 18 months with an extension for an additional 12
months. The guarantee is coterminous with the credit facility.
5.
Odyssey Re Holdings Corp. has guaranteed the obligations of Odyssey
America as tenant under the Third Amended and Modified Office Lease Agreement
made as of September 13, 2004 between First Stamford Place L.L.C. and ▇▇▇▇▇▇▇▇▇▇
First Stamford L.L.C. and Odyssey America, with respect to Odyssey America's
headquarters at 300 First Stamford Place in Stamford, Connecticut. As of October
1, 2004, the present value of Odyssey America's remaining lease obligation
subject to the guarantee by
Odyssey Re Holdings Corp. is $36.801 million,
assuming a 7% discount rate. The lease term ends on September 30, 2022.
6. Cross-reference is made to the letters of credit listed on Schedule 5.05.
SCHEDULE 7.07
TRANSACTIONS WITH AFFILIATES
1. Cross-reference is made to the matters disclosed on Schedules 5.18(b),
7.01 and 7.03.
2. Odyssey America owns 97.7% of the shares of First Capital Insurance
Limited (Singapore). These shares, valued at approximately $35 million,
are expected to be transferred to Fairfax Asia Limited, a Barbados
company that is an affiliate ("Fairfax Asia"), in exchange for Fairfax
Asia shares of equal value. The transaction is expected to be completed
in 2004.
SCHEDULE 10.02
ADMINISTRATIVE AGENT'S OFFICE;
CERTAIN ADDRESSES FOR NOTICES
ODYSSEY RE HOLDINGS CORP.:
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
telephone: (▇▇▇) ▇▇▇-▇▇▇▇
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
e-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
ADMINISTRATIVE AGENT:
Administrative Agent's Office
(for payments and Requests for Credit Extensions):
Bank of America, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Mail Code: CA4-705-05-11
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Payment Instruction
Bank of America, N.A.
ABA # ▇▇▇▇▇▇▇▇▇
A/C Name: Credit Services
Account No.: 375 083 6479
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Ref: Odyssey Re Holdings Corp
Other Notices as Administrative Agent:
Bank of America, N.A.
Agency Management
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code: CA5-701-05-19
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Electronic Mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
1
L/C ISSUER:
Bank of America, N.A.
Trade Operations-Los Angeles #22621
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Code: CA9-703-19-23
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Vice President
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Telecopier: 213.345.6694
Electronic Mail: ▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
2
EXHIBIT A
FORM OF REVOLVING LOAN NOTICE
Date: ,
----------- -----
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
September 27, 2004 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among Odyssey Re Holdings Corp.,
a Delaware corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.
The undersigned hereby requests (select one):
[ ] A Borrowing of Revolving Loans
[ ] A conversion or continuation of Loans
1. On (a Business Day).
------------------------------------------
2. In the amount of $ .
-----------------------------------
3. Comprised of .
----------------------------------------
[Type of Revolving Loan requested]
4. For Eurodollar Rate Loans: with an Interest Period of
_______ months.
The Revolving Borrowing, if any, requested herein complies with the
provisos to the first sentence of Section 2.01 of the Agreement.
ODYSSEY RE HOLDINGS CORP.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
A-1-1
EXHIBIT B
FORM OF REVOLVING NOTE
--------------
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to _____________________ or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of each Loan from time to time made by the Lender to the
Borrower under that certain Credit Agreement, dated as of September 27, 2004 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement;" the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of
one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
1
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF OUTSTANDING
END OF PRINCIPAL OR PRINCIPAL
TYPE OF AMOUNT OF INTEREST INTEREST PAID BALANCE NOTATION
DATE LOAN MADE LOAN MADE PERIOD THIS DATE THIS DATE MADE BY
--------------------------------------------------------------------------------------------------------------------------
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2
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date:____________
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of
September 27, 2004 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among Odyssey Re Holdings Corp, a
Delaware corporation (the "Borrower"), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the __________________________________ of the Borrower,
and that, as such, he/she is authorized to execute and deliver this Certificate
to the Administrative Agent on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal YEAR-END financial
statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
the Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal QUARTER-END financial
statements]
1. Attached hereto as Schedule 1 are the unaudited financial
statements required by Section 6.01(b) of the Agreement for the fiscal quarter
of the Borrower ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
3. A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and
1
[SELECT ONE:]
[TO THE BEST KNOWLEDGE OF THE UNDERSIGNED DURING SUCH FISCAL PERIOD,
THE BORROWER PERFORMED AND OBSERVED EACH COVENANT AND CONDITION OF THE LOAN
DOCUMENTS APPLICABLE TO IT.]
--OR--
[THE FOLLOWING COVENANTS OR CONDITIONS HAVE NOT BEEN PERFORMED OR
OBSERVED AND THE FOLLOWING IS A LIST OF EACH SUCH DEFAULT AND ITS NATURE AND
STATUS:]
4. The representations and warranties of the Borrower contained in
Article V of the Agreement, and any representations and warranties of any Loan
Party that are contained in any document furnished at any time under or in
connection with the Loan Documents, are true and correct on and as of the date
hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Compliance
Certificate, the representations and warranties contained in subsections (a) and
(b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01 of the Agreement, including the statements in connection with which this
Compliance Certificate is delivered.
5. The 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
______________, ________.
ODYSSEY RE HOLDINGS CORP.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
2
For the Quarter/Year ended ___________________("Statement Date")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. SECTION 7.14 (a) -- MAXIMUM TOTAL DEBT TO CAPITALIZATION RATIO.
A. Consolidated Indebtedness at Statement Date
1. Aggregate amount of all Indebtedness of the Borrower and its
Subsidiaries (excluding the aggregate amount of Convertible
Debt ):
(a) all obligations of the Borrower and its Subsidiaries for $
borrowed money and all obligations of the Borrower and
its Subsidiaries evidenced by bonds, debentures, notes,
loan agreements or other similar instruments:
(b) all direct or contingent obligations of the Borrower and $
its Subsidiaries arising under letters of credit
(including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar
instruments:
(c) net obligations of the Borrower and its Subsidiaries $
under any Swap Contract:
(d) all obligations of the Borrower and its Subsidiaries to $
pay the deferred purchase price of property or services
(other than trade accounts payable in the ordinary
course of business and, in each case, not past due for
more than 60 days after the date on which such trade
account payable was created):
(e) indebtedness (excluding prepaid interest thereon) $
secured by a Lien on property owned or being purchased
by the Borrower and its Subsidiaries (including
indebtedness arising under conditional sales or other
title retention agreements), whether or not such
indebtedness shall have been assumed by the Borrower and
its Subsidiaries or is limited in recourse:
(f) capital leases and Synthetic Lease Obligations: $
3
(g) all obligations of the Borrower and its Subsidiaries to $
purchase, redeem, retire, defease or otherwise make any
payment in respect of any Equity Interest in the
Borrower and its Subsidiaries or any other Person,
valued, in the case of a redeemable preferred interest,
at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid
dividends:
(h) all Guarantees of the Borrower and its Subsidiaries in $
respect of any of the foregoing; provided, however, for
purposes of calculating the Total Debt to Capitalization
Ratio, only the amount of any outstanding claim against
any of the Guarantees set forth in items 1, 2 and 3 on
Schedule 7.03 which has not been indemnified and paid by
Fairfax within 10 days after such claim is made against
any of such Guarantees shall be included in the
calculation of Consolidated Indebtedness:
(i) Aggregate amount of Convertible Debt $
(j) Total (Lines I.A.1.(a) + (b) + (c) + (d) + (e) + (f) + $
(g) + (h) - (i))
B. Consolidated Net Worth at Statement Date
1. Net worth of the Borrower and its Subsidiaries, determined on $
a consolidated basis in accordance with GAAP but excluding any
preferred stock or other class of Equity Interest that, by its
stated terms (or by the terms of any class of Equity Interest
issuable upon conversion thereof or in exchange therefor), or
upon the occurrence of any event, matures or is mandatorily
redeemable, or is redeemable at the option of the holders
thereof, in whole or in part and excluding the effect of
Statement of Financial Accounting Standards No. 115 issued by
the Financial Accounting Standards Board:
C. Total Debt to Capitalization Ratio (Line I.A.1.(j)) / (Line
I.A.1.(j) + Line I.B.1):
D. Maximum: 0.30 to 1.00
4
II. SECTION 7.14 (b) -- MINIMUM STATUTORY SURPLUS.
A. Total amount shown as "surplus as regards policyholders" on line 35,
column 1, page 3 of the Annual Statement of OARC:
B. Minimum: $1,000,000,000
III. SECTION 7.14 (c) -- MINIMUM RISK-BASED CAPITAL.
A. "Total adjusted capital" (within the meaning of the Risk-Based $
Capital for Insurers Model Act as promulgated by the NAIC as of the
date hereof (the "Model Act")) of OARC:
B. "Authorized Control Level Risk-Based Capital" (within the meaning of $
the Model Act) of OARC:
C. Risk-Based Capital (Line III.A) / (2 x Line III.B.): ___%
D. Minimum: 150%
IV. SECTION 7.01 (l) -- LIENS.
A. Aggregate amount of Liens (other than Liens specified in clauses (a) $
through (k) of Section 7.01) on other than stock of any Insurance
Subsidiary securing Obligations of the Borrower and its
Subsidiaries:
B. Maximum aggregate amount at any time outstanding: $10,000,000
V. SECTION 7.05 (b) -- RESTRICTED PAYMENTS.
A. Aggregate amount of dividends, payments, distributions, $
acquisitions, purchases, retirements or redemptions made by the
Borrower during any fiscal year:
B. 20% of Consolidated Net Income for such fiscal year: $
C. 50% of Consolidated Net Worth at end of such fiscal year: $
D. Maximum (the lesser of Line V.B. and Line V.C): $
E. Maximum aggregate amount of dividends and distributions to Fairfax $20,000,000
during any fiscal year:
5
EXHIBIT D
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, the Letters of Credit included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________ [and is an
Affiliate/Approved Fund of [identify Lender](1)]
3. Borrower(s): Odyssey Re Holdings Corp.
4. Administrative Agent: Bank of America, N.A., as the administrative
agent under the Credit Agreement
---------------------------
(1) Select as applicable.
5. Credit Agreement: The Credit Agreement, dated as of September 27,
2004 among Odyssey Re Holdings Corp., the
Lenders parties thereto, and Bank of America,
N.A., as Administrative Agent and L/C Issuer
6. Assigned Interest:
Aggregate
Amount of Amount of Percentage
Facility Commitment Commitment Assigned of CUSIP
Assigned(2) For all Lenders* Assigned* Commitment(3) Number
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
(4) $ $ %
----------------------------------------------------------------------------------------------------------------------
$ $ %
----------------------------------------------------------------------------------------------------------------------
$ $ %
----------------------------------------------------------------------------------------------------------------------
7. [Trade Date: __________________](5)
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
---------------------------
(2) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g., "Revolving
Credit Agreement", "Term Loan Commitment", etc.).
(3) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(4) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment", "Term Loan Commitment", etc.).
(5) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
-----------------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
-----------------------------------------
Title:
[Consented to and](6) Accepted:
BANK OF AMERICA, N.A., as
Administrative Agent
By:
----------------------------------------
Title:
[Consented to:](7)
By:
----------------------------------------
Title:
---------------------------
(6) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
(7) To be added only if the consent of the Borrower and/or other parties (e.g.
L/C Issuer) is required by the terms of the Credit Agreement.
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
REVOLVING NOTE
$35,000,000.00 September ___, 2004
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to BANK OF AMERICA, N.A. or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000.00) or
such less principal amount of Loans (as defined in such Agreement) due and
payable by the Borrower to the Lender on the Maturity Date under that certain
Credit Agreement, dated as of September ___, 2004 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of
one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President &
Chief Financial Officer
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
PRINCIPAL OUTSTANDING
END OF OR INTEREST PRINCIPAL
TYPE OF AMOUNT OF INTEREST PAID THIS BALANCE NOTATION
DATE LOAN MADE LOAN MADE PERIOD DATE THIS DATE MADE BY
-------------------------------------------------------------------------------------------------------------------
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REVOLVING NOTE
$25,000,000.00 September ___, 2004
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to JPMORGAN CHASE BANK or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of TWENTY-FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00) or
such less principal amount of Loans (as defined in such Agreement) due and
payable by the Borrower to the Lender on the Maturity Date under that certain
Credit Agreement, dated as of September ___, 2004 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of
one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President &
Chief Financial Officer
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
PRINCIPAL OUTSTANDING
END OF OR INTEREST PRINCIPAL
TYPE OF AMOUNT OF INTEREST PAID THIS BALANCE NOTATION
DATE LOAN MADE LOAN MADE PERIOD DATE THIS DATE MADE BY
-------------------------------------------------------------------------------------------------------------------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
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------- ---------- ---------- -------- -------- ----------- --------
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------- ---------- ---------- -------- -------- ----------- --------
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REVOLVING NOTE
$20,000,000.00 September ___, 2004
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to CITIZENS NATIONAL BANK or registered assigns (the "Lender"), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00) or such
lesser principal amount of Loans (as defined in such Agreement) due and payable
by the Borrower to the Lender on the Maturity Date under that certain Credit
Agreement, dated as of September ___, 2004 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of
one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President &
Chief Financial Officer
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
PRINCIPAL OUTSTANDING
END OF OR INTEREST PRINCIPAL
TYPE OF AMOUNT OF INTEREST PAID THIS BALANCE NOTATION
DATE LOAN MADE LOAN MADE PERIOD DATE THIS DATE MADE BY
-------------------------------------------------------------------------------------------------------------------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
------- ---------- ---------- -------- -------- ----------- --------
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------- ---------- --------
REVOLVING NOTE
$10,000,000.00 September ___, 2004
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to PNC BANK or registered assigns (the "Lender"), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of
TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) or such lesser principal amount
of Loans (as defined in such Agreement) due and payable by the Borrower to the
Lender on the Maturity Date under that certain Credit Agreement, dated as of
September ___, 2004 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), among the Borrower, the Lenders
from time to time party thereto, and Bank of America, N.A., as Administrative
Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of
one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
ODYSSEY RE HOLDINGS CORP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President &
Chief Financial Officer
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
PRINCIPAL OUTSTANDING
END OF OR INTEREST PRINCIPAL
TYPE OF AMOUNT OF INTEREST PAID THIS BALANCE NOTATION
DATE LOAN MADE LOAN MADE PERIOD DATE THIS DATE MADE BY
-------------------------------------------------------------------------------------------------------------------
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