EXHIBIT 10.36
U.S. $50,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JANUARY 31, 2002
AMONG
ODYSSEY RE HOLDINGS CORP.,
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK,
AS DOCUMENTATION AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
BANC OF AMERICA SECURITIES LLC,
AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of January
31, 2002, among OdysseyRe Holdings Corp. (the "Borrower"), the several financial
institutions from time to time party to this Agreement (collectively, the
"Lenders"; individually, a "Lender"), ▇▇ ▇▇▇▇▇▇ Chase Bank, as documentation
agent, and Bank of America, N.A. as administrative agent for the Lenders.
WHEREAS, the Borrower has entered into a Credit Agreement (the "Existing
Credit Agreement") dated as of December 31, 2001 with the Lenders; and
WHEREAS, the parties to the Existing Credit Agreement wish to extend the
term of the Existing Credit Agreement and to make certain other amendments
thereto;
NOW, THEREFORE, the Existing Credit Agreement is hereby amended and
restated to state in its entirety as follows:
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
1.1
DEFINITIONS
(a) Certain Defined Terms. The following terms have the following
meanings:
"Administrative Agent" means Bank of America in its capacity as
administrative agent for the Lenders hereunder, and any successor
administrative agent arising under Section 9.9.
"Administrative Agent-Related Persons" means Bank of America and
any successor administrative agent arising under Section 9.9, together
with their respective Affiliates (including, in the case of Bank of
America, the Lead Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Administrative Agent's Payment Office" means the address for
payments set forth on Schedule 10.2 or such other address as the
Administrative Agent may from time to time specify.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of the other Person, whether through the ownership of
voting securities, membership interests, by contract, or otherwise.
"Agreement" means this Credit Agreement.
"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 2000 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 2000 Annual Statement
of the Insurance Subsidiary.
"Applicable Margin" means 2.50%.
"Appraisal" means a real estate appraisal conducted in accordance
with the Uniform Standards of Professional Appraisal Practice (as
promulgated by the Appraisal Standards Board of the Appraisal
Foundation) and all Requirements of Law applicable to the Lenders, and
applicable internal policies of the Administrative Agent, undertaken by
an independent appraisal firm satisfactory to the Administrative Agent
and the Required Lenders, and providing an assessment of fair market
value of a parcel or property, and taking into account any and all
Estimated Remediation Costs.
"Assignee" has the meaning specified in subsection 10.9(a).
"Attorney Costs" means and includes all fees and disbursements of
any law firm or other external counsel, the allocated cost of internal
legal services and all disbursements of internal counsel.
"Bank of America" means Bank of America, N. A.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978
(11 U.S.C. sec.101, et seq.).
"BAS" means Banc of America Securities LLC.
"Base Rate" means 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". Such 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.
"Benefit Arrangement" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer
Plan and which is maintained or otherwise contributed to by any member
of the ERISA Group.
"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 borrowing hereunder consisting of Loans of the
same Type made to the Borrower on the same day by the Lenders under
Article II, and, other than in the case of Base Rate Loans, having the
same Interest Period.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the state where the Administrative
Agent's Office is located are authorized or required by law to close
and, if the applicable Business Day relates to any Offshore Rate Loan,
means such a day on which dealings in deposits are carried on in the
applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the Borrower and
its Subsidiaries for fixed or capital assets made during such period
which, in accordance with GAAP, would be classified as capital
expenditures; and
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(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"Capitalization Ratio" means, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated Indebtedness as of such date to
(ii) the sum of Consolidated Indebtedness and Consolidated Tangible Net
Worth, each as of such date.
"Capitalized Lease Liabilities" means all monetary obligations of
the Borrower or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as
capitalized leases, and, for purposes of this Agreement and each other
Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
"Cash Equivalents" means (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or
instrumentality thereof, backed by the full faith and credit of the
United States of America and maturing within one hundred eighty (180)
days from the date of acquisition, (ii) commercial paper issued by any
Person organized under the laws of the United States of America,
maturing within one hundred eighty (180) days from the date of
acquisition and, at the time of acquisition, having a rating of at least
A-1 or the equivalent thereof by S&P and at least P-1 or the equivalent
thereof by ▇▇▇▇▇'▇, (iii) time deposits, certificates of deposit and
banker's acceptances maturing within one hundred eighty (180) days from
the date of issuance and issued by a bank or trust company organized
under the laws of the United States of America or any state thereof that
has combined capital and surplus of at least $500,000,000 and that has
(or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by S&P or
at least A-2 or the equivalent thereof by ▇▇▇▇▇'▇, (iv) repurchase
obligations of a bank or trust company described in clause (iii) above
and having a term not exceeding seven (7) days with respect to
underlying securities of the types described in clause (i) above entered
into with any bank or trust company meeting the qualifications specified
in clause (iii) above, and (v) repurchase obligations of brokers,
dealers and other parties with a long-term unsecured debt rating of at
least A or the equivalent thereof by S&P or at least A-2 or the
equivalent by ▇▇▇▇▇'▇ of the types of securities described in clause (i)
above and having a term not exceeding seven (7) days.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"Change of Control" shall occur at any time any of the following
shall occur: (i) the Guarantor shall not own, directly or indirectly, a
majority of the voting stock of the Borrower or (ii) ▇▇▇▇ ▇▇▇▇▇ shall
not own, directly or indirectly, at least 40% of the votes attaching to
the voting stock of the Guarantor.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by all Lenders (or, in the
case of subsection 4.7, waived by the Person entitled to receive such
payment).
"CMOs" means any security or certificate representing any interest
or participation in a pool of Mortgage Backed Securities (it being
understood that Mortgage Backed Securities themselves are not CMOs).
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Combined Statutory Surplus" means, as to all Insurance
Subsidiaries domiciled in the United States on a combined basis as of
any date, the sum (without duplication) of the total amounts shown on
line 27, column 1, page 3 of the Annual Statement of such Insurance
Subsidiary.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit B.
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"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.
"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 securities that, by its stated terms (or by the terms of
any class of equity securities 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.
"Consolidated Tangible Net Worth" means as to the Borrower and its
Subsidiaries, Consolidated Net Worth minus intangible assets minus
capitalized expenses.
"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 under the Letter of Credit Agreement or 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 in
the ordinary course of business (including security posted by each of
the Insurance Subsidiaries in the ordinary course of its business to
secure obligations thereunder) shall not be deemed to be Contingent
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, undertaking,
contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or
any of its property is bound.
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"Conversion/Continuation Date" means any date on which, under
Section 2.3, the Borrower (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Covenant Compliance Worksheet" means a fully completed worksheet
in the form of Attachment A to Exhibit C.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Disposition" means (i) the sale, lease, conveyance or other
disposition of property, and (ii) the sale or transfer by the Borrower
or any Subsidiary of the Borrower of any equity securities issued by any
Subsidiary of the Borrower and held by such transferor Person, other
than the sale of assets in the ordinary course of business.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; (c) a Person
that is primarily engaged in the business of commercial banking and that
is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which
a Lender is a Subsidiary, or (iii) a Person of which a Lender is a
Subsidiary; and (d) any other Person the Borrower or the Administrative
Agent shall agree to permit to be an Eligible Assignee.
"Environmental Claims" means all claims (other than claims in the
ordinary course of business under Insurance Agreements or Reinsurance
Agreements written or assumed by any Insurance Subsidiary), however
asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental
Law, or for release or injury to the environment or threat to public
health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based upon
the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks,
discharges, emissions or releases) of any Hazardous Materials at, in, or
from property, whether or not owned by the Borrower.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health
and safety matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act,
the Federal Water Pollution Control Act of 1972, the Solid Waste
Disposal Act, the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and regulations promulgated thereunder.
"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).
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"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 which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA 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 Section 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 might reasonably be
expected to constitute 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 PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
"ERISA Group" means the Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower,
are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Estimated Remediation Costs" means all costs associated with
performing work to remediate contamination of real property or
groundwater, including engineering and other professional fees and
expenses, costs to remove, transport and dispose of contaminated soil,
costs to "cap" or otherwise contain contaminated soil, and costs to pump
and treat water and monitor water quality.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 8.1.
"Event of Loss" means, with respect to any property, any of the
following: (a) any loss, destruction or damage of such property; (b) any
pending or threatened institution of any proceedings for the
condemnation or seizure of such property or for the exercise of any
right of eminent domain; or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of such
property, or confiscation of such property or the requisition of the use
of such property.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Credit Agreement" has the meaning specified in the
recitals.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards to the nearest 1/100 of 1%) 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 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 charged to Bank of America on
such day on such transactions as determined by Administrative Agent.
"Fitch" means Fitch, Inc., its successors and assigns.
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal
functions.
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"GAAP" means generally accepted accounting principles 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, that are applicable to the circumstances as of
the date of determination, consistently applied. If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either Borrower or the
Required Lenders shall so request, the Administrative Agent, Lenders and
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 (subject to the approval of the Required Lenders),
provided that, until so amended, (a) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change
therein and (b) 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.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Granting Lender" has the meaning specified in Section 10.9(f).
"Guarantor" means Fairfax Financial Holdings Limited, a Canada
corporation.
"Guarantor Consent" means a consent of the Guarantor in
substantially the form of Exhibit E.
"Guaranty" means the guaranty of the Guarantor dated December 31,
2001.
"Guaranty Obligation" has the meaning specified in the definition
of "Contingent Obligation."
"Hazardous Materials" means any substances or materials (a) that
are defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (b) that
are defined by any Environmental Law as toxic, explosive, corrosive,
ignitable, infectious, radioactive, mutagenic or otherwise hazardous,
(c) the presence of which require investigation or response under any
Environmental Law, (d) that constitute a nuisance, trespass or health or
safety hazard to Persons or neighboring properties, (e) that consist of
underground or aboveground storage tanks, whether empty, filled or
partially filled with any substance or (f) that contain asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear
fuel, natural gas or synthetic gas.
"Historical Statutory Statements" has the meaning specified in
Section 5.11(b).
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money or in respect of loans or advances; (b)
all obligations issued, undertaken or assumed as the deferred purchase
price of property or services (other than trade payables entered into in
the ordinary course of business on ordinary terms); (c) all
reimbursement or payment obligations (contingent or otherwise) with
respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property,
assets or businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the
Person (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or
sale of such property); (i) all obligations with respect to capital
leases or Synthetic Lease Obligations; (j) all Obligations with respect
to Swap Contracts; (h) all Obligations with respect to (x) any loans
made to any executives of the Borrower or any its Subsidiaries that are
guaranteed by the Borrower and (y) any
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repurchase obligations including contingent obligations in respect of
shares; (i) all accrued earn-out obligations of such Person; (j) all
indebtedness referred to in clauses (a) through (i) above secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Indebtedness; and (k) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (a) through (i) above; provided that Indebtedness shall not
include obligations under any Borrower Reinsurance Agreement or
Insurance Agreement or letters of credit supporting such obligations to
the extent of reserves established under GAAP.
"Indemnified Liabilities" has the meaning specified in Section
10.5.
"Indemnified Person" has the meaning specified in Section 10.5.
"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court
or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.
"Insurance Agreement" means all contracts of insurance issued by
any 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 Odyssey Reinsurance Corporation and Odyssey America
Reinsurance Corporation.
"Interest Payment Date" means, as to an Offshore Rate Loan, the
last day of each Interest Period applicable to such Loan and, as to any
Base Rate Loan, the last Business Day of each calendar quarter and each
date such Loan is converted into another Type of Loan, provided,
however, that if any Interest Period for an Offshore Rate Loan exceeds
three months, the date that falls three months after the beginning of
such Interest Period and after each Interest Payment Date thereafter is
also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the borrowing date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Borrower in its Notice
of Borrowing or Notice of Conversion/ Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
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(ii) any Interest Period pertaining to an Offshore Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period; and
(iii) unless the Administrative Agent otherwise consents, there
may not be more than four Interest Periods in effect at any time.
"Invested Assets" means, with respect to any Person, the amount, on
a consolidated basis, of such Person's investments, cash and cash
equivalents as reflected on its most recent balance sheet.
"Investment Grade Securities" means non-equity securities (other
than those issued by an Affiliate of the Borrower and other than CMOs
and REMICS) that are rated "BBB-" (or the equivalent thereof) or higher
by S&P, "Baa3" (or the equivalent thereof) or higher by Moody's, or
"BBB-" (or the equivalent thereof) or higher by Fitch or if not rated by
S&P, Moody's or Fitch, are rated "NAIC 2" (or the equivalent thereof) or
better by the NAIC.
"Investments" has the meaning specified in Section 7.4.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Joint Venture" means a partnership, limited liability company,
joint venture or other legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter formed by
the Borrower or any of its Subsidiaries with another Person in order to
conduct a common venture or enterprise with such Person.
"Lead Arranger" means BAS in its capacity as sole lead arranger and
sole book manager.
"Lender" means each lender from time to time party hereto.
"Lending Office" means, as to any Lender, the office or offices of
such Lender specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
10.2, or such other office or offices as the Lender may from time to
time notify the Borrower and the Administrative Agent.
"Letter of Credit Agreement" means the Standby Letter of Credit
Application and Agreement dated December 5, 1996 with ▇▇▇▇▇▇ Guaranty
Trust Company in respect of Lloyd's of London, as amended.
"Licenses" has the meaning specified in Section 5.4.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement (in the nature of compensating balances, cash
collateral accounts or security interests), encumbrance, lien (statutory
or other), charge, or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing,
and the filing of any financing statement under the Uniform Commercial
Code or comparable Laws of any jurisdiction), including the interest of
a purchaser of accounts receivable.
"Loan" means an extension of credit by a Lender to the Borrower
under Article II, and may be a Base Rate Loan or an Offshore Rate Loan
(each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, and all other
documents delivered to the Administrative Agent or any Lender in
connection with the transactions contemplated by this Agreement.
"Margin Stock" has the meaning given to such term in Regulation U.
"Material Adverse Effect" means (a) a material adverse change in,
or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the
9
Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Borrower or any Subsidiary to perform
under any Loan Document and to avoid any Event of Default; or (c) a
material adverse effect upon (i) the legality, validity, binding effect
or enforceability against the Borrower or any Subsidiary of any Loan
Document or (ii) the perfection or priority of any Lien granted under
any of the Collateral Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., its successors and
assigns.
"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 an employee pension benefit plan within
the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five (5) plan years made
contributions, including for these purposes, any Person which ceased to
be a member of the ERISA Group during such five (5) year period.
"NAIC" means the National Association of Insurance Commissioners
and any successor thereto.
"Net Proceeds" means, as to any Disposition by a Person, proceeds
in cash, checks or other cash equivalent financial instruments as and
when received by such Person, net of: (a) the direct costs relating to
such Disposition excluding amounts payable to such Person or any
Affiliate of such Person, (b) sale, use or other transaction taxes paid
or payable by such Person as a direct result thereof, and (c) amounts
required to be applied to repay principal, interest and prepayment
premiums and penalties on Indebtedness secured by a Lien on the asset
which is the subject of such Disposition. "Net Proceeds" means, as to
any issuance of debt or equity, proceeds of such issuance net of the
direct costs relating to such issuance excluding amounts payable to such
Person or any Affiliate of such Person. "Net Proceeds" shall also
include proceeds paid on account of any Event of Loss, net of (i) all
money actually applied to repair or reconstruct the damaged property or
property affected by the condemnation or taking, (ii) all of the costs
and expenses reasonably incurred in connection with the collection of
such proceeds, award or other payments, and (iii) any amounts retained
by or paid to parties having superior rights to such proceeds, awards or
other payments.
"Note" means a promissory note executed by the Borrower in favor of
a Lender pursuant to subsection 2.2(b), in substantially the form of
Exhibit D.
"Notice of Conversion/Continuation" means a notice in substantially
the form of Exhibit A.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the
Borrower to any Lender, the Administrative Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing
or hereafter arising.
"Offshore Rate" means for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by the Administrative
Agent pursuant to the following formula:
LIBOR
------------------------------------
Offshore Rate = 1.00 -- Eurodollar Reserve
Percentage
Where,
"LIBOR" means, for such Interest Period,
(a) the rate per annum (carried out to the fifth decimal place)
equal to the rate determined by the Administrative Agent to be the
offered rate that appears on Page 3750 of the Telerate Screen 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
10
(b) in the event the rate referenced in the preceding subsection
(a) does not appear on such page or service or such page or service
shall cease to be available, the rate per annum (carried out to the
fifth decimal place) 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) in the event the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum
determined by the Administrative Agent as the rate of interest at
which Dollar deposits (for delivery on the first day of such Interest
Period) in same day funds in the approximate amount of the applicable
Offshore Rate Loan and with a term equivalent to such Interest Period
would be offered by its London Branch to major banks in the offshore
Dollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest
Period.
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by
the Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The Offshore Rate
for each outstanding Offshore Rate Loan shall be adjusted automatically
as of the effective date of any change in the Eurodollar Reserve
Percentage.
The determination of the Eurodollar Reserve Percentage and LIBOR by
the Administrative Agent shall be conclusive in the absence of manifest
error.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 10.9(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.3.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
11
"Plan" means an employee benefit plan (as defined in Section 3(3)
of ERISA) which the Borrower sponsors or maintains or to which the
Borrower makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Pro Rata Share" means, as to any Lender at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of the outstanding Loans payable to such
Lender divided by the aggregate outstanding Loans of all Lenders.
"Quarterly Statement" means, with respect to any Insurance
Subsidiary for any fiscal quarter, the quarterly financial statements of
such Insurance Subsidiary as required to be filed with the Insurance
Regulatory Authority of its jurisdiction of domicile, together with all
exhibits, schedules, certificates and actuarial opinions required to be
filed or delivered therewith.
"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 issued by such
Insurance Subsidiary.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Required Lenders" means, at any time Lenders then holding at least
51% of the then aggregate unpaid principal amount of the Loans.
"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 or the
president of the Borrower, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of the
Borrower, or any other officer having substantially the same authority
and responsibility.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Solvent" means, as to any Person at any time, that (a) the fair
value of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(31) of the Bankruptcy Code and, in the
alternative, for purposes of the
New York Uniform Fraudulent Transfer
Act; (b) the present fair saleable value of the property of such Person
is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay
its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature; and (e) such Person is not engaged
in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute
unreasonably small capital.
"S&P" means Standard & Poor's Rating Group.
"SPC" has the meaning specified in Section 10.9(f).
"Statutory Accounting Practices" means, with respect to any
Insurance Subsidiary, the statutory accounting practices prescribed or
permitted by the relevant Insurance Regulatory
12
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.
"Subsidiary" means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority
of the shares of securities or other interest 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 Borrower.
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"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 any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond, note or ▇▇▇▇ option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction,
currency swap, cross-currency rate swap, swaption, currency option or
any other, similar transaction (including any option to enter into any
of the foregoing) or any combination of the foregoing, and, unless the
context otherwise clearly requires, any master agreement relating to or
governing any or all of the foregoing.
"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 by the Borrower based upon one or
more mid- market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Lender.)
"Synthetic Lease Obligations" means all monetary obligations 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 which 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 any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Administrative Agent, respectively, taxes
imposed on or measured by its net income by the jurisdiction (or any
political subdivision thereof) under the laws of which such Lender or
the Administrative Agent, as the case may be, is organized or maintains
a lending office.
"Termination Date" shall mean January 31, 2005.
"Type" has the meaning specified in the definition of "Loan."
"UCC" means the Uniform Commercial Code as in effect in the State
of
New York.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance
13
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." each means the United States of America.
"Wholly Owned Subsidiary" means any corporation in which (other
than directors' qualifying shares required by law) 100% of the capital
stock of each class having ordinary voting power, and 100% of the
capital stock 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 of the other Wholly-Owned
Subsidiaries, or both.
(b) Other Interpretive Provisions. The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(ii) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision
of this Agreement; and subsection, Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(iii) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(B) The term "including" is not limiting and means "including without
limitation."
(C) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words
"to" and "until" each mean "to but excluding", and the word "through" means
"to and including."
(D) The term "property" includes any kind of property or asset, real,
personal or mixed, tangible or intangible.
(iv) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or
regulation.
(v) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this
Agreement.
(vi) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
Unless otherwise expressly provided, any reference to any action of the
Administrative Agent or the Lenders by way of consent, approval or
waiver shall be deemed modified by the phrase "in its/their sole
discretion."
(vii) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the
Administrative Agent, the Borrower and the other parties, and are the
products of all parties. Accordingly, they shall not be construed
against the Lenders or the Administrative Agent merely because of the
Administrative Agent's or Lenders' involvement in their preparation.
(c) Accounting Principles. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently applied.
(ii) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Borrower.
14
1.2
THE CREDITS
(a) Terms of Loans. Each Lender has made a Loan in the principal
amount set forth in Schedule 2.1 under the Existing Credit Agreement. Such
Loans shall continue to remain outstanding under the terms and conditions
of this Agreement. Any amount of such Loans repaid may not be reborrowed.
(ii) Subject to the terms and conditions of this Agreement, the
Type of Loan shall be at the sole option of the Borrower.
(b) Loan Accounts. The Loans made by each Lender shall be evidenced
by one or more loan accounts or records maintained by such Lender in the
ordinary course of business. The loan accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest
error/rebuttable presumptive evidence of the amount of the Loans made by
the Lenders to the Borrower and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Loans.
(ii) Upon the request of any Lender made through the Administrative
Agent, the Loans made by such Lender may be evidenced by one or more
Notes, instead of or in addition to loan accounts. Each such Lender
shall set forth on the schedules annexed to its Note(s) the date, amount
and maturity of each Loan made by it and the amount of each payment of
principal made by the Borrower with respect thereto. Each such Lender is
irrevocably authorized by the Borrower to endorse its Note(s) and each
Lender's record shall be conclusive absent manifest error; provided,
however, that the failure of a Lender to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any such Note
to such Lender. Each Note issued to a Lender shall (i) be executed by
the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Closing Date, (iv) be in a stated principal amount equal
to such Lender's Loans, (v) bear interest in accordance with the
provisions of Section 2.7, and (vi) be entitled to all of the benefits
of this Agreement and the other Loan Documents and subject to the
provisions hereof and thereof.
(c) Conversion and Continuation Elections. The Borrower may, upon
irrevocable written notice to the Administrative Agent in accordance with
subsection 2.3(b):
(A) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of
Offshore Rate Loans, to convert any such Loans (or any part thereof in an
amount not less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
(B) elect, as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $5,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans
in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof to be less than $5,000,000, Offshore Rate Loans
shall automatically convert into Base Rate Loans, and on and after such
date the right of the Borrower to continue such Loans as, and convert such
Loans into, Offshore Rate Loans shall terminate.
(ii) The Borrower shall deliver a Notice of Conversion/
Continuation to be received by the Administrative Agent not later than
9:00 a.m. (Chicago time) at least (i) three Business Days in advance of
the Conversion/ Continuation Date, if the Loans are to be converted into
or continued as
15
Offshore Rate Loans and (ii) on the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(1) the proposed Conversion/Continuation Date;
(2) the aggregate amount of Loans to be converted or continued;
(3) the Type of Loans resulting from the proposed conversion or
continuation; and
(4) other than in the case of conversions into Base Rate Loans,
the duration of the requested Interest Period.
(iii) If upon the expiration of any Interest Period for Offshore
Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, as the case may be,
or if any Default or Event of Default then exists, the Borrower shall be
deemed to have elected to convert such Offshore Rate Loans into Base
Rate Loans effective as of the expiration date of such Interest Period.
(iv) The Administrative Agent will promptly notify each Lender of
its receipt of a Notice of Conversion/ Continuation, or, if no timely
notice is provided by the Borrower, the Administrative Agent will
promptly notify each Lender of the details of any automatic conversion.
All conversions and continuations shall be made ratably according to the
respective outstanding principal amounts of the Loans with respect to
which the notice was given held by each Lender.
(v) Unless the Required Lenders otherwise consent, during the
existence of a Default or Event of Default, the Borrower may not elect
to have a Loan converted into or continued as an Offshore Rate Loan.
(vi) After giving effect to any conversion or continuation of
Loans, unless the Administrative Agent shall otherwise consent, there
may not be more than two different Interest Periods in effect.
(d) Optional Prepayments. Subject to Section 3.4, the Borrower may,
at any time or from time to time, upon not less than three Business Days'
irrevocable notice to the Administrative Agent, ratably prepay Loans in
whole or in part, in minimum amounts of $5,000,000 or any multiple of
$1,000,000 in excess thereof. Such notice of prepayment shall specify the
date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of
any such notice, and of such Lender's Pro Rata Share of such prepayment. If
such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to
each such date on the amount prepaid and any amounts required pursuant to
Section 3.4.
(e) Mandatory Prepayments of Loans; Maturity.
(i) If the Borrower or any Subsidiary shall at any time or from
time to time make or agree to make a Disposition, then (i) the Borrower
shall promptly notify the Administrative Agent of such proposed
Disposition (including the amount of the estimated Net Proceeds to be
received by the Borrower or such Subsidiary in respect thereof) and (ii)
promptly upon, and in no event later than three Business Days after,
receipt by the Borrower or the Subsidiary of one hundred percent (100%)
of the Net Proceeds of any Disposition other than Dispositions, the Net
Proceeds of which are less than $10,000,000 in the aggregate, the
Borrower shall prepay Loans in an aggregate amount equal to the lesser
of the amount of the Loans outstanding or the amount of such Net
Proceeds.
(ii) If the Borrower or any of its Subsidiaries shall issue debt or
equity, other than debt permitted under Section 7.2, the Borrower or
such Subsidiary shall promptly notify the Administrative Agent of the
estimated Net Proceeds of such issuance to be received by the Borrower
or such Subsidiary in respect thereof. Promptly upon, and in no event
later than three Business Days after receipt by the Borrower or such
Subsidiary of Net Proceeds of such issuance, the Borrower or such
Subsidiary shall prepay the Loans in an aggregate amount equal to the
lesser amount of the amount of the Loans outstanding or such Net
Proceeds.
16
(iii) Any payments pursuant to this Section 2.5 shall be applied
first to any Base Rate Loans then outstanding and then to Offshore Rate
Loans with the shortest Interest Periods remaining. The Borrower shall
pay, together with each payment under this Section 2.5, accrued interest
on the amount prepaid and any amounts required pursuant to Section 3.4.
(iv) All Loans shall be due and payable on the Termination Date.
(f) Use of Proceeds. The Borrower has only used the proceeds of the
Loans to make a payment on the intercompany note owed to the Guarantor.
(g) Interest. Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per
annum equal to the Offshore Rate plus the Applicable Margin or the Base
Rate, as the case may be (and subject to the Borrower's right to convert to
other Types of Loans under Section 2.3).
(ii) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 2.5 for the portion of the Loans so
prepaid and upon payment (including prepayment) in full thereof and,
during the existence of any Event of Default, interest shall be paid on
demand of the Administrative Agent at the request or with the consent of
the Required Lenders.
(iii) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, the Borrower shall pay
interest (after as well as before entry of judgment thereon to the
extent permitted by law) on the principal amount of all outstanding
Loans at a rate per annum which is determined by adding 2% per annum to
the interest rate then in effect for such Loans; provided, however,
that, on and after the expiration of any Interest Period applicable to
any Offshore Rate Loan outstanding on the date of occurrence of such
Event of Default or acceleration, the principal amount of such Loan
shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base Rate
plus 2%.
(iv) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Lender hereunder shall be subject to
the limitation that payments of interest shall not be required for any
period for which interest is computed hereunder, to the extent (but only
to the extent) that contracting for or receiving such payment by such
Lender would be contrary to the provisions of any law applicable to such
Lender limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Lender, and in such event
the Borrower shall pay such Lender interest at the highest rate
permitted by applicable law.
(h) Computation of Interest. 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 (including the first day, but excluding the last
day) elapsed. All other computations of interest shall be made on the basis
of a 360-day year and actual days (including the first day, but excluding
the last day) elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(ii) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Borrower and the Lenders in
the absence of manifest error.
(i) Payments by the Borrower. All payments to be made by the Borrower
shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be
made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (Chicago time) on the
date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as expressly
provided herein) of such payment in like funds as received. Any payment
received by the Administrative Agent later than
17
11:00 a.m. (Chicago time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.
(ii) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other
than a Business Day, such payment shall be made on the following
Business Day, and such extension of time shall in such case be included
in the computation of interest or fees, as the case may be.
(iii) Unless the Administrative Agent receives notice from the
Borrower prior to the date on which any payment is due to the Lenders
that the Borrower will not make such payment in full as and when
required, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date in
immediately available funds and the Administrative Agent may (but shall
not be so required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrower has not made such payment in
full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date
repaid.
(j) Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by
it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other
share contemplated hereunder), such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders
such participations in the Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment pro rata with each
of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender, such purchase
shall to that extent be rescinded and each other Lender shall repay to the
purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of
(i) the amount of such paying Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off,
but subject to Section 10.11) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of
such participation. The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify
the Lenders following any such purchases or repayments.
1.3
TAXES, YIELD PROTECTION AND ILLEGALITY
(a) Taxes. Except as otherwise required by law, any and all payments
by the Borrower to each Lender or the Administrative Agent under this
Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for, any Taxes. In addition, the Borrower
shall pay all Other Taxes.
(ii) If the Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder
to any Lender or the Administrative Agent, then:
(A) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section), such Lender or the Administrative Agent, as the
case may be, receives an amount equal to the sum it would have
received and retained had no such deductions or withholdings been
made;
(B) the Borrower shall make such deductions and withholdings;
and
18
(C) the Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance
with applicable law.
(iii) The Borrower agrees to indemnify and hold harmless each
Lender and the Administrative Agent for the full amount of (i) Taxes and
(ii) Other Taxes in the amount that the respective Lender in good faith
specifies as paid and necessary to preserve the after-tax yield the
Lender would have received if such Taxes or Other Taxes had not been
imposed, and any liability (including penalties, interest, additions to
tax and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days after
the date the Lender or the Administrative Agent makes written demand
therefor. Any refund or credit of Taxes or Other Taxes to a Lender or
the Administrative Agent, including as a result of being incorrectly or
illegally asserted, shall be remitted by the Lender or the
Administrative Agent to the Borrower, and the Lender and the
Administrative Agent agree that they will reasonably cooperate with the
Borrower to pursue any claim that such Tax or Other Tax was incorrectly
or illegally asserted.
(iv) Within 30 days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish to each Lender or
the Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment reasonably
satisfactory to such Lender or the Administrative Agent.
(v) If the Borrower is required to pay any amount to any Lender or
the Administrative Agent pursuant to subsection (b) or (c) of this
Section, then such Lender shall use reasonable efforts (consistent with
legal and regulatory restrictions) to change the jurisdiction of its
Lending Office so as to eliminate any such additional payment by the
Borrower which may thereafter accrue, if such change in the reasonable
judgment of such Lender is not otherwise materially disadvantageous to
such Lender.
(vi) Notwithstanding the foregoing subsections 3.2(a) through (e),
the Borrower shall not be required to pay any additional amounts to any
Lender in respect of United States withholding tax pursuant to such
subsections if (i) the obligation to pay such additional amounts would
not have arisen but for a failure by such Lender to comply with the
requirements of Section 9.10 or (ii) such Lender shall not have
furnished the Administrative Agent and the Borrower with such forms
listed in Section 9.10 and shall have not taken such other steps as
reasonably may be available to it under applicable tax laws any and
applicable tax treaty or convention to obtain an exemption from, or
reduction (to the lowest applicable rate) of, such United States
withholding tax.
(b) Illegality. If any Lender reasonably determines in good faith
that the introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or administration of any
Requirement of Law, has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make Offshore Rate Loans, then, on notice
thereof by the Lender to the Borrower through the Administrative Agent, any
obligation of that Lender to make Offshore Rate Loans shall be suspended
until the Lender notifies the Administrative Agent and the Borrower that
the circumstances giving rise to such determination no longer exist.
(ii) If a Lender reasonably determines in good faith that it is
unlawful to maintain any Offshore Rate Loan, the Borrower shall, upon
its receipt of notice of such fact and demand from such Lender (with a
copy to the Administrative Agent), prepay in full such Offshore Rate
Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under Section 3.4, either on the last day
of the Interest Period thereof, if the Lender may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if the
Lender may not lawfully continue to maintain such Offshore Rate Loan. If
the Borrower is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, the Borrower shall borrow from the
affected Lender and the affected Lender shall make available to the
Borrower, in the amount of such repayment, a Base Rate Loan.
19
(c) Increased Costs and Reduction of Return. If any Lender determines
that, due to either (i) the introduction of or any change (other than any
change by way of imposition of or increase in reserve requirements included
in the calculation of the Offshore Rate) in or in the interpretation of any
law or regulation or (ii) the compliance by that Lender with any guideline
or request from any central bank or other Governmental Authority (whether
or not having the force of law), there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining any
Offshore Rate Loans, then the Borrower shall be liable for, and shall from
time to time, within 15 days of written demand (with a copy of such demand
to be sent to the Administrative Agent), pay to the Administrative Agent
for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
(ii) If any Lender shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Lender (or its Lending
Office) or any corporation controlling the Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Lender or any corporation
controlling the Lender and (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its loans, credits or
obligations under this Agreement, then, upon demand of such Lender to
the Borrower through the Administrative Agent, the Borrower shall pay to
the Lender, from time to time as specified by the Lender, additional
amounts sufficient to compensate the Lender for such increase.
(d) Funding Losses. The Borrower shall reimburse each Lender and hold
each Lender harmless from any loss or expense which the Lender may sustain
or incur as a consequence of:
(i) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(ii) the failure of the Borrower to borrow, continue or convert a
Loan after the Borrower has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/ Continuation;
(iii) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section 2.5;
(iv) the prepayment (including pursuant to Section 2.5) or other
payment (including after acceleration thereof) of an Offshore Rate Loan
on a day that is not the last day of the relevant Interest Period; or
(v) the automatic conversion under Section 2.3 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the
relevant Interest Period; including any such loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain
its Offshore Rate Loans or from fees payable to terminate the deposits
from which such funds were obtained. For purposes of calculating amounts
payable by the Borrower to the Lenders under this Section and under
subsection 3.3(a), each Offshore Rate Loan made by a Lender (and each
related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at LIBOR in determining the
Offshore Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such Offshore Rate Loan is in
fact so funded.
(e) Inability to Determine Rates. If the Administrative Agent
determines that for any reason adequate and reasonable means do not exist
for determining the Offshore Rate for any requested Interest Period with
respect to a proposed Offshore Rate Loan, or that the Offshore Rate
applicable pursuant to subsection 2.7(a) for any requested Interest Period
with respect to a proposed Offshore Rate Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Loan, the
Administrative Agent
20
will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Offshore Rate Loans, as the
case may be, hereunder shall be suspended until the Administrative Agent
revokes such notice in writing. Upon receipt of such notice, the Borrower
may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Borrower does not revoke such Notice, the
Lenders shall make, convert or continue the Loans, as proposed by the
Borrower, in the amount specified in the applicable notice submitted by the
Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of Offshore Rate Loans, as the case may be.
(f) Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article III shall deliver to the Borrower (with a
copy to the Administrative Agent) a certificate setting forth in reasonable
detail the amount payable to the Lender hereunder and such certificate
shall be conclusive and binding on the Borrower in the absence of manifest
error.
(g) Substitution of Lenders. Upon the receipt by the Borrower from
any Lender (an "Affected Lender") of a claim for compensation under Section
3.3, the Borrower may: (i) request the Affected Lender to use its best
efforts to obtain a replacement lender or financial institution
satisfactory to the Borrower and to the Administrative Agent (a
"Replacement Lender") to acquire and assume all or a ratable part of all of
such Affected Lender's Loans; (ii) request one more of the other Lenders to
acquire and assume all or part of such Affected Lender's Loans; or (iii)
designate a Replacement Lender. Any such designation of a Replacement
Lender under clause (i) or (iii) shall be subject to the prior written
consent of the Administrative Agent (which consent shall not be
unreasonably withheld).
(h) Survival. The agreements and obligations of the Borrower in this
Article III shall survive the payment of all other Obligations.
1.4
CONDITIONS PRECEDENT
The effectiveness of the amendment and restatement of the Existing Credit
Agreement shall be subject to the receipt of the following documents in form and
substance satisfactory to the Administrative Agent and each Lender, and in
sufficient copies for each Lender:
(a) Credit Agreement, Guaranty and Notes. This Agreement, the
Guarantor Consent (and, if requested, the Notes) executed by each party
thereto;
(b) Resolutions; Incumbency. Copies of the resolutions of the board
of directors of the Borrower and each Subsidiary that may become party to a
Loan Document authorizing the transactions contemplated hereby, certified
as of the Closing Date by the Secretary or an Assistant Secretary of such
Person; and
(ii) A certificate of the Secretary or Assistant Secretary of the
Borrower, and each Subsidiary that may become party to a Loan Document
certifying the names and true signatures of the officers of the Borrower
or such Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered
by it hereunder;
(c) Organization Documents. The articles or certificate of
incorporation and the bylaws of the Borrower as in effect on the Closing
Date, certified by the Secretary or Assistant Secretary of the Borrower or
such Subsidiary as of the Closing Date;
(d) Opinion. Opinion(s) of Counsel to the Borrower in form
satisfactory to the Administrative Agent;
(e) Payment of Fees. Evidence of payment by the Borrower of all
accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, together with Attorney Costs of Bank of
America to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute Bank of America's
reasonable estimate of Attorney Costs incurred or to
21
be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude final settling of accounts between
the Borrower and Bank of America); including any such costs, fees and
expenses arising under or referenced in Section 10.4;
(f) Certificate. A certificate signed by a Responsible Officer, dated
as of the Closing Date, stating that:
(A) the representations and warranties contained in Article V are true
and correct in all material respects on and as of such date, as though made
on and as of such date;
(B) no Default or Event of Default exists;
(C) there has occurred since March 31, 2001 no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Effect; and
(D) no actions, suits, investigations or proceedings are pending or to
such individual's knowledge threatened in any court or before any
arbitrator or governmental authority that if adversely determined would
have a Material Adverse Effect, and
(g) Other Documents. Such other approvals, opinions, documents or
materials as the Administrative Agent or any Lender may reasonably request.
1.5
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and each
Lender that:
(a) Corporate Existence and Power. Each of the Borrower and its
Subsidiaries:
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (b)
has the full corporate power and authority to execute, deliver and
perform the Loan Documents to which it is or will be a party, to own and
hold its property and to engage in its business as presently conducted,
and (c) is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where the nature of its business
or the ownership of its properties requires it to be so qualified except
where the failure to be so qualified would not have a Material Adverse
Effect.
(b) Corporate Authorization.
The Borrower has taken all necessary corporate action to execute,
deliver and perform each of the Loan Documents to which it is or will be
a party, and has, or on the Closing Date (or any later date of execution
and delivery) will have, validly executed and delivered each of the Loan
Documents to which it is or will be a party. This Agreement constitutes,
and each of the other Loan Documents upon execution and delivery by the
Borrower will constitute, assuming the due execution of the other
parties hereto, the legal, valid and binding obligation of the Borrower
enforceable against it in accordance with its terms, except as Borrower,
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
or by general equitable principles.
(c) No Violation.
The execution, delivery and performance by the Borrower of this
Agreement and each of the other Loan Documents, and compliance by it
with the terms hereof and thereof, do not and will not (a) contravene
any Requirement of Law applicable to the Borrower, (b) conflict with,
result in a breach of or constitute (with notice, lapse of time or both)
a default under any material indenture, agreement or other instrument to
which it is a party, by which it or any of its properties is bound or to
which it is subject, (c) contravene the terms of the Borrower's
Organizational Documents or (d) result in or require the creation or
imposition of any Lien upon any of its properties or assets except to
the extent provided in the Loan Documents. No Subsidiary is subject to
any restriction or
22
encumbrance on its ability to make dividend payments or other
distributions in respect of its capital stock, to make loans or advances
to the Borrower or any other Subsidiary, or to transfer any of its
assets or properties to the Borrower or any other Subsidiary, in each
case other than such restrictions or encumbrances existing under or by
reason of the Loan Documents or applicable Requirements of Law.
(d) Third Party Consent.
(i) No consent, approval, authorization or other action by, notice
to, or registration or filing with, any Governmental Authority or other
Person is or will be required as a condition to or otherwise in
connection with the due execution, delivery and performance by the
Borrower of this Agreement or any of the other Loan Documents or the
legality, validity or enforceability hereof or thereof.
(ii) Each of the Borrower and its Subsidiaries has, and is in good
standing with respect to, all governmental approvals, licenses, permits
and authorizations necessary to conduct its business as presently
conducted and to own or lease and operate its properties except where
the failure to do so would not have a Material Adverse Effect.
(iii) Schedule 5.4 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. To
the knowledge of the Borrower, (a) no such License is the subject of a
proceeding for suspension, revocation or limitation or any similar
proceedings, (b) there is no sustainable basis for such a suspension,
revocation or limitation, and (c) 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 5.4, where such business requires any license, permit
or other authorization of an Insurance Regulatory Authority of such
jurisdiction.
(e) Litigation.
There are no actions, investigations, suits or proceedings pending
or, to the knowledge of the Borrower, threatened, at law, in equity or
in arbitration, before any court, other Governmental Authority or other
Person, (i) against or affecting the Borrower, any of its Subsidiaries
or any of their respective properties that would, if adversely
determined, be reasonably likely to have a Material Adverse Effect or
(ii) with respect to this Agreement or any of the other Loan Documents.
(f) Taxes.
Each of the Borrower and its Subsidiaries has timely filed all
federal and all material state and local tax returns and reports
required to be filed by it and has paid all taxes, assessments, fees and
other charges levied upon it or upon its properties that are shown
thereon as due and payable, other than those that are being contested in
good faith and by proper proceedings and for which adequate reserves
have been established in accordance with GAAP. Such returns accurately
reflect in all material respects all liability for taxes of the Borrower
and its Subsidiaries for the periods covered thereby. Except as set
forth on Schedule 5.6, there is no ongoing audit or examination or, to
the knowledge of the Borrower, other investigation by any Governmental
Authority of the tax liability of the Borrower or any of its
Subsidiaries; and there is no unresolved claim by any Governmental
Authority concerning the tax liability of the Borrower or any of its
Subsidiaries for any period for which tax returns have been or were
required to have been filed, other than claims for which adequate
reserves have been established in accordance with GAAP.
23
(g) Subsidiaries.
Schedule 5.7 sets forth a list, as of the Closing Date, of all of
the Subsidiaries of the Borrower and, as to each such Subsidiary, the
percentage ownership (direct and indirect) of the Borrower in each class
of its capital stock and each direct owner thereof.
(h) Full Disclosure.
All factual information heretofore or contemporaneously furnished
to the Administrative Agent or any Lender in writing by or on behalf of
the Borrower or any of its Subsidiaries for purposes of or in connection
with this Agreement and the transactions contemplated hereby is, and all
other such factual information hereafter furnished to the Administrative
Agent or any Lender in writing by or on behalf of the Borrower or any of
its Subsidiaries will be, true and accurate in all material respects on
the date as of which such information is dated or certified (or, if such
information has been amended or supplemented, on the date as of which
any such amendment or supplement is dated or certified) and not made
incomplete by omitting to state a material fact necessary to make the
statements contained therein, in light of the circumstances under which
such information was provided, not misleading.
(i) Margin Regulations.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
None of the Loans made to the Borrower will be used, directly or
indirectly, to purchase or carry any Margin Stock, to extend credit for
such purpose or for any other purpose that would violate or be
inconsistent with Regulations T, U or X or any provision of the Exchange
Act and less than twenty five percent (25%) of the assets subject to
Section 7.1 and 7.3 consists of Margin Stock.
(j) No Material Adverse Effect.
Since March 31, 2001, no event, condition or state of facts has
existed that could reasonably be expected to result in a Material
Adverse Effect.
(k) Financial Matters.
(i) The Borrower has heretofore furnished to the Administrative
Agent copies of the pro forma consolidated balance sheet of the Borrower
and its Subsidiaries as of December 31, 2000 and the unaudited
consolidated balance sheets of the Borrower and its subsidiaries as of
March 31, 2001 and September 30, 2001 and the related statements of
income, stockholders' equity and cash flows for the fiscal periods then
ended, together with, in the case of the December 31, 2000 statements,
the opinion of PricewaterhouseCoopers. Such financial statements have
been prepared in accordance with GAAP and present fairly the financial
condition of the Borrower and its Subsidiaries on a consolidated basis
as of the respective dates thereof and the consolidated results of
operations of the Borrower and its Subsidiaries for the respective
periods then ended. Except as fully reflected in the most recent
financial statements referred to above and the notes thereto, there are
no material liabilities or obligations as of the respective date of
those financial statements with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or
otherwise and whether or not due).
(ii) The Borrower has heretofore furnished to the Administrative
Agent copies of the Annual Statements of each of the Insurance
Subsidiaries as of December 31, 1998, 1999 and 2000, and for the fiscal
years then ended and the Quarterly Statement of each of the Insurance
Subsidiaries as of September 30, 2001, 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
24
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.
(iii) Each of the Borrower and its Subsidiaries, after giving
effect to the consummation of the transactions contemplated hereby, (i)
will have capital sufficient to carry on its businesses as conducted and
as proposed to be conducted, (ii) will have assets with a fair saleable
value, determined on a going concern basis, (y) not less than the amount
required to pay the probable liability on its existing debts as they
become absolute and matured and (z) greater than the total amount of its
liabilities (including identified contingent liabilities, valued at the
amount that can reasonably be expected to become absolute and matured),
and (iii) will not intend to, and will not believe that it will, incur
debts or liabilities beyond its ability to pay such debts and
liabilities as they mature.
(l) Ownership of Properties.
Each of the Borrower and its Subsidiaries (a) has good and
marketable title to all real property owned by it, (b) holds interests
as lessee under valid leases in full force and effect with respect to
all material leased real and personal property used in connection with
its business, and (c) has good title to all of its other properties and
assets reflected in the most recent financial statements referred to in
Section 5.11(a) (except as sold or otherwise disposed of since the date
thereof in the ordinary course of business), in each case under (a), (b)
and (c) above free and clear of all Liens other than Permitted Liens.
(m) ERISA.
Each member of the ERISA Group has fulfilled its obligations under
the minimum funding standards of ERISA and the Internal Revenue Code
with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. No member of the ERISA Group has
(a) sought a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code in respect of any Plan, (b) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the
Internal Revenue Code or (c) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
(n) Environmental Matters.
(i) Except as set forth in Schedule 5.14(a), no Hazardous Materials
are or, to the knowledge of the Borrower, have been generated, released,
treated or disposed of by the Borrower or any of its Subsidiaries or, to
the knowledge of the Borrower, by any other Person or otherwise, in, on
or under any portion of any real property owned by the Borrower or any
of its Subsidiaries, except in material compliance with all applicable
Environmental Laws, and, to the knowledge of the Borrower, no portion of
any such real property has been contaminated by any Hazardous Materials.
For purposes of this Section 5.14, "contaminated" means the presence of
Hazardous Materials that require or required within five years prior to
the date of this Agreement, as the case may be, remediation under any
Environmental Law.
25
(ii) Except as set forth on Schedule 5.14(b), to the knowledge of
the Borrower, (i) no portion of any real property owned by the Borrower
or any of its Subsidiaries has been used as or for a mine, a landfill, a
dump or other disposal facility, a gasoline service station, or (other
than for petroleum substances stored in the ordinary course of business)
a petroleum products storage facility, (ii) no portion of such real
property or any other real property at any time owned by the Borrower or
any of its Subsidiaries has, pursuant to any Environmental Law, been
placed on the "National Priorities List" or "CERCLIS List" (or any
similar federal, state or local list) of sites subject to possible
environmental problems, and (iii) there are not and have never been any
underground storage tanks situated on any real property owned by the
Borrower or any of its Subsidiaries.
(iii) All activities and operations of the Borrower and its
Subsidiaries are in compliance with the requirements of all applicable
Environmental Laws, except to the extent the failure so to comply,
individually or in the aggregate, would not be reasonably likely to have
a Material Adverse Effect. Other than claims in the ordinary course of
business pursuant to insurance or reinsurance policies written or
assumed by an Insurance Subsidiary, neither the Borrower nor any of its
Subsidiaries is involved in any suit, action or proceeding, or has
received any notice, complaint or other request for information from any
Governmental Authority or other Person, with respect to any actual or
alleged Environmental Claims that, if adversely determined, would be
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect; and, to the knowledge of the Borrower, there are no
threatened actions, suits, proceedings or investigations with respect to
any such Environmental Claims, nor any basis therefor.
(o) Compliance with Laws.
Each of the Borrower and its Subsidiaries has timely filed all
material reports, documents and other materials required to be filed by
it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to
be retained by it under all applicable Requirements of Law, and is
otherwise in compliance with all applicable Requirements of Law in
respect of the conduct of its business and the ownership and operation
of its properties, except for such Requirements of Law the failure to
comply with which, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect.
(p) Regulated Industries.
Neither the Borrower nor any of its Subsidiaries is (i) an
"investment company," a company "controlled" by an "investment company,"
or an "investment advisor," within the meaning of the Investment Company
Act of 1940, as amended, or (ii) a "holding company," 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, as amended.
(q) Insurance.
The assets, properties and business of the Borrower and its
Subsidiaries are insured against such hazards and liabilities (other
than normal life insurance risk), under such coverages and in such
amounts, as are customarily maintained by prudent companies similarly
situated and under policies issued by insurers of recognized
responsibility. No notice of any pending or threatened cancellation or
material premium increase has been received by the Borrower or any of
its Subsidiaries with respect to any such insurance policies, and the
Borrower and each of its Subsidiaries are in substantial compliance with
all conditions contained therein.
(r) Certain Contracts.
Schedule 5.18 lists, as of the Closing Date, each material
contract, agreement or commitment, written or oral, other than
Reinsurance Agreements and Insurance Agreements, to which the Borrower
or any of its Subsidiaries is a party, by which any of them or their
respective properties is bound or to which any of them is subject (other
than insurance policies written in the ordinary
26
course of business) and that (i) relates to employment or labor matters,
(ii) involves aggregate consideration payable to or by any party thereto
of $1,000,000 or more or (iii) is otherwise material to the business,
condition (financial or otherwise), operations, performance or
properties of the Borrower or any of its Subsidiaries, and also
indicates the parties, subject matter thereof. As of the Closing Date,
each such contract is in full force and effect, and neither the Borrower
nor any of its Subsidiaries or, to the knowledge of the Borrower, any
other party thereto, is in breach of or in default under any such
contract. As of the Closing Date, none of such other parties has
notified the Borrower that it has any presently exercisable right to
terminate any such contract nor will any such other party have any right
to terminate any such contract on account of the execution, delivery and
performance of the Loan Documents.
(s) Reinsurance Agreements.
(i) Except as set forth on Schedule F to the Annual Statements for
the Insurance Subsidiaries for the fiscal year ending December 31, 2000
as updated by Schedule F to the September 30, 2001 financial statements,
there are no material liabilities outstanding as of the Closing Date
under any Reinsurance Agreement. Each Reinsurance Agreement is in full
force and effect; 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 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. 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 Statement
or Quarterly Statement at the time prepared. Except as set forth on
Schedule 5.19 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
& Company or S&P or (ii) has provided collateral in favor of the
applicable Insurance Subsidiary of the type and in an amount described
in Schedule 5.19.
(ii) Except as set forth on Schedule 5.19, 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.)
(iii) As of the Closing Date, no Insurance Subsidiary has any
reinsured obligations under any Surplus Relief Reinsurance Agreement.
1.6
AFFIRMATIVE COVENANTS
So long as any Loan or other Obligation shall remain unpaid or unsatisfied,
unless the Required Lenders waive compliance in writing:
(a) GAAP Financial Statements.
The Borrower will deliver to each Lender:
(i) As soon as available and in any event within sixty (60) days
after the end of each of the first three fiscal quarters of each
fiscal year, beginning with the first fiscal quarter ending March 31,
2002, unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and unaudited
consolidated statements of income, comprehensive income and cash
flows for the Borrower and its Subsidiaries for the fiscal quarter
then ended and for that portion of the fiscal year then ended, in
each case setting forth comparative consolidated figures as of the
end of and for the corresponding period in the preceding fiscal year,
all prepared in accordance with GAAP (subject to the absence of notes
required by GAAP and subject to normal year-end audit adjustments)
applied on a basis consistent with that of the preceding quarter or
containing disclosure of the effect on the financial condition or
27
results of operations of any change in the application of accounting
principles and practices during such quarter; and
(ii) As soon as available and in any event within ninety (90)
days after the end of each fiscal year, beginning with the fiscal
year ended December 31, 2001, (i) an audited consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such
fiscal year and audited consolidated statements of income,
comprehensive income, stockholders' equity and cash flows for the
Borrower and its Subsidiaries for the fiscal year then ended,
including the applicable notes, in each case setting forth
comparative figures as of the end of and for the preceding fiscal
year, certified by the independent certified public accounting firm
regularly retained by the Borrower or another independent certified
public accounting firm of recognized national standing reasonably
acceptable to the Required Lenders, together with a report thereon by
such accountants that is not qualified as to going concern or scope
of audit and to the effect that such financial statements present
fairly the consolidated financial condition and results of operations
of the Borrower and its Subsidiaries as of the dates and for the
periods indicated in accordance with GAAP, and (ii) unaudited
consolidating statements of income and cash flows for the Borrower
and its Subsidiaries for the fiscal year then ended, in reasonable
detail, all prepared in accordance with GAAP applied on a consistent
basis with that of the preceding fiscal year or containing disclosure
of the effect on the financial condition or results of operations of
any change in the application of accounting principles and practices
during such fiscal year.
(b) Statutory Financial Statements.
The Borrower will deliver to each Lender:
(i) As soon as available and in any event within sixty (60) days
after the end of each of the first three fiscal quarters of each
fiscal year, beginning with the first fiscal quarter ending March 31,
2002, 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; and
(ii) As soon as available and in any event within sixty-five
(65) days after the end of each fiscal year, beginning with the
fiscal year ended December 31, 2001, 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 with the relevant Insurance
Regulatory Authority, prepared in accordance with Statutory
Accounting Practices.
(c) Other Business and Financial Information.
The Borrower will deliver to each Lender:
(i) Concurrently with each delivery of the financial statements
described in Sections 6.1 and 6.2, a Compliance Certificate in the
form of Exhibit C with respect to the period covered by the financial
statements then being delivered, executed by the chief financial
officer of the Borrower (or a vice president of the Borrower having
significant responsibility for financial matters), together, in the
case of the financial statements described in Section 6.1, with a
Covenant Compliance Worksheet reflecting the computation of the
financial covenants set forth in Sections 6.12(a), (b) and (c) as of
the last day of the period covered by such financial statements;
(ii) 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,
2001, 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
28
therewith, each in the format prescribed by the applicable insurance
laws of such Insurance Subsidiary's jurisdiction of domicile;
(iii) 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;
(iv) Promptly upon the sending, filing or receipt thereof,
copies of (i) all financial statements, reports, notices and proxy
statements that the Borrower or any of its Subsidiaries shall send or
make available generally to its shareholders, (ii) all regular,
periodic and special reports, registration statements and
prospectuses that the Borrower or any of its Subsidiaries shall
render to or file with the Securities and Exchange Commission, the
National Association of Securities Dealers, Inc. or any national
securities exchange, (iii) all significant reports on examination or
similar significant reports, financial examinations reports or 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 (iv) all significant
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;
(v) Promptly upon (and in any event within three (3) Business
Days after) an officer of the Borrower obtaining knowledge thereof,
written notice of any of the following:
(A) the occurrence of any Default or Event of Default, together with a
written statement of the chief executive officer or chief financial officer
of the Borrower specifying the nature of such Default or Event of Default,
the period of existence thereof and the action that the Borrower has taken
and proposes to take with respect thereto;
(B) the commencement or threat of commencement of any litigation or
proceeding (or any material development in any litigation or other
proceeding previously reported pursuant to Section 5.5 or Section
6.3(e)(ii)) affecting the Borrower or any Subsidiary (i) in which the
amount of damages claimed is $5,000,000 (or its equivalent in another
currency or currencies) or more, (ii) in which injunctive or similar relief
is sought and which, if adversely determined, would reasonably be expected
to have a Material Adverse Effect, or (iii) in which the relief sought is
an injunction or other stay of the performance of this Agreement or any
Loan Document;
(C) 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 that, if taken or adversely determined, would be reasonably
likely to have a Material Adverse Effect, or (B) any notice of any 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 would be reasonably
likely to have a Material Adverse Effect;
(D) the occurrence of any of the following, together with a reasonably
detailed description thereof and copies of any filings, communications,
reports or other information relating thereto made available to the
Borrower or any of its Subsidiaries: (A) the assertion or threat of
assertion, of any Environmental Claim against or affecting the Borrower,
any of its Subsidiaries or any of their respective real property, leased or
owned; (B) the receipt by the Borrower or any of its Subsidiaries of notice
of any alleged violation of or noncompliance with any Environmental Laws by
the Borrower or any of its Subsidiaries; (C) the taking of any remedial
action by the Borrower, any of its Subsidiaries or any other Person in
response to the actual or alleged generation, storage, release, disposal or
discharge of any Hazardous Materials on, to, upon or from any real property
leased or owned by the Borrower or any of its Subsidiaries or (D) the
existence of any environmental or similar condition on any real property
adjoining
29
or in the vicinity of the property of the Borrower or any Subsidiary that
could reasonably be anticipated to cause such property or any part thereof
to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws; but
in each case under clauses (A), (B), (C) and (D) above, only to the extent
the same would be reasonably likely to have a Material Adverse Effect;
(E) the occurrence of any other litigation or proceeding affecting the
Borrower or any of its Subsidiaries which the Borrower would be required to
report to the SEC pursuant to the Exchange Act;
(F) the occurrence of any actual changes 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;
(G) if and when any member of the ERISA Group (A) knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (B) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (C) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (D) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (E) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; (F)
fails to make any payment or contribution to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement or makes any amendment to any Plan
or Benefit Arrangement which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which the
Borrower or applicable member of the ERISA Group is required or proposes to
take; or (G) receives any notice from a Governmental Authority with respect
to (i) an ERISA Event, (ii) a material increase in the Unfunded Pension
Liability of any Pension Plan, (iii) the adoption of, or the commencement
of contributions to, any Plan subject to Section 412 of the Code by any
member of the ERISA Group, or (iv) the adoption of any amendment to a Plan
subject to Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability.
(H) of (x) any breach or non-performance of, or any default under, any
Contractual Obligation of the Borrower or any of its Subsidiaries which
could result in a Material Adverse Effect; and (y) any dispute, litigation,
investigation, proceeding or suspension which may exist at any time between
the Borrower or any of its Subsidiaries and any Governmental Authority; and
(I) any other matter or event that has, or would have a Material
Adverse Effect together with a written statement of the chief executive
officer or chief financial officer of the Borrower setting forth the name
and period of existence thereof and the action that the Borrower has taken
and proposes to take with respect thereto;
(vi) Promptly, notice of (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 be reasonably likely to
have a Material Adverse Effect; \
(vii) As promptly as reasonably possible, such other information
about the business, condition (financial or otherwise), operations or
properties of the Borrower or any of its Subsidiaries (including,
without limitation, financial, actuarial and other information with
30
respect to Reinsurance Agreements) as the Administrative Agent or any
Lender may from time to time reasonably request;
(viii) Upon the request of the Administrative Agent at the
direction of the Required Lenders (which absent a showing of good
cause shall not be more often than one time during any twelve-month
period), at the Borrower's expense, deliver to each Lender within
sixty (60) days of such request 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; and
(ix) As promptly as possible, any material change in accounting
policies or financial reporting practices by the Borrower or any of
its consolidated Subsidiaries;
(d) Corporate Existence; Franchises; Maintenance of Properties.
The Borrower will, and will cause each of its Subsidiaries to,
maintain and preserve in full force and effect its corporate existence,
except as expressly permitted otherwise by Section 7.1. The Borrower
will, and will cause each of its Subsidiaries to, (a) obtain, maintain
and preserve in full force and effect all other rights, franchises,
licenses, permits, certifications, approvals and authorizations required
by Governmental Authorities and necessary to the ownership, occupation
or use of its properties or the conduct of its business, except to the
extent the failure to do so would not be reasonably likely to have a
Material Adverse Effect, and (b) keep all material properties in good
working order and condition (normal wear and tear excepted) and from
time to time make all necessary repairs to and renewals and replacements
of such properties, except to the extent that any of such properties are
obsolete or are being replaced.
(e) Compliance with Laws.
The Borrower will, and will cause each of its Subsidiaries to,
comply in all respects with all Requirements of Law applicable in
respect of the conduct of its business and the ownership and operation
of its properties, except to the extent the failure so to comply would
not be reasonably likely to have a Material Adverse Effect.
(f) Payment of Obligations.
The Borrower will, and will cause each of its Subsidiaries to, (a)
pay all liabilities and obligations as and when due (subject to any
applicable subordination provisions), except to the extent failure to do
so would not be reasonably likely to have a Material Adverse Effect, and
(b) pay and discharge all taxes, assessments and governmental charges or
levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto,
and all lawful claims that, if unpaid, might become a Lien upon any of
the properties of the Borrower or any of its Subsidiaries; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to pay any such tax, assessment, charge, levy or claim that is
being contested in good faith and by proper proceedings and as to which
the Borrower or such Subsidiary is maintaining adequate reserves with
respect thereto in accordance with GAAP.
(g) Insurance.
The Borrower will, and will cause each of its Subsidiaries to,
maintain with financially sound and reputable insurance companies
insurance with respect to its assets, properties and business, against
such hazards and liabilities (other than normal life insurance risk), of
such types and in such amounts, as is customarily maintained by
companies in the same or similar businesses similarly situated.
(h) Maintenance of Books and Records; Inspection.
The Borrower will, and will cause each of its Subsidiaries to, (i)
maintain adequate books, accounts and records, in which full, true and
correct entries shall be made of all financial
31
transactions in relation to its business and properties, and prepare all
financial statements required under this Agreement, in each case in
accordance with GAAP or Statutory Accounting Practices, as applicable,
and in compliance with the requirements of any Governmental Authority
having jurisdiction over it, and (ii) permit employees or agents of the
Administrative Agent or any Lender, at the Administrative Agent's or
Lender's expense (except as provided in Section 10.4), to inspect its
properties and examine or audit its books, records, working papers and
accounts and make copies and memoranda of them, and to discuss its
affairs, finances and accounts with its officers and employees and, with
the prior consent of the Borrower (such consent not to be unreasonably
withheld), the independent public accountants of the Borrower and its
Subsidiaries (and by this provision the Borrower authorizes such
accountants to discuss the finances of the Borrower and its
Subsidiaries), all at such times and from time to time, upon reasonable
notice and during business hours, as may be reasonably requested.
(i) Dividends.
The Borrower will 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.
(j) Ownership of Insurance Subsidiaries.
The Borrower will cause each of its Insurance Subsidiaries to
remain at all times a Wholly Owned Subsidiary of the Borrower, except as
expressly permitted otherwise by Section 7.1.
(k) Financial Covenants.
(i) Capitalization Ratio. The Borrower will not permit the
Capitalization Ratio to be greater than 0.30 to 1.0 at any time.
(ii) Statutory Surplus. The Borrower will at all times cause
the Combined Statutory Surplus of the Insurance Subsidiaries
domiciled in the United States to be not less than (i) $700,000,000
plus (ii) 50% of Consolidated Net Income (if positive) for each
fiscal quarter ending on or after December 31, 2001 plus (iii) 50% of
equity issued by the Borrower and its Subsidiaries after the date
hereof.
(iii) Risk-Based Capital. The Borrower will not permit "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 each of Odyssey Reinsurance Corporation and
Odyssey America Reinsurance Corporation to be less than one hundred
fifty percent (150%), as of the last day of any fiscal quarter,
beginning with the fiscal quarter ending December 31, 2001, of the
applicable "Company Action Level RBC" (within the meaning of the
Model Act).
(iv) Earned Surplus. The Borrower will not permit the Earned
Surplus, as defined under Statutory Accounting Practices, of Odyssey
America Reinsurance Corporation to be less than $200,000,000 at any
time.
32
1.7
NEGATIVE COVENANTS
So long as any Lender shall have any Loan or other Obligation shall remain
unpaid or unsatisfied, unless the Required Lenders waive compliance in writing:
(a) Merger; Consolidation; Disposition of Assets.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, 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) all or any substantial portion of
its assets, business or properties outside of the ordinary course of its
business, or agree to do any of the foregoing; provided, however, that
any Subsidiary may merge or consolidate with, or sell or otherwise
dispose of assets to, another Subsidiary or the Borrower so long as (y)
the surviving or transferee corporation is the Borrower or a Wholly
Owned Subsidiary and (z) immediately after giving effect thereto, no
Default or Event of Default would exist.
Notwithstanding the foregoing, the Borrower will not, and will not
permit or cause any of its Subsidiaries to sell, or otherwise dispose
of, any capital stock of any Subsidiary.
(b) Indebtedness.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist, any Indebtedness other than:
(i) Accrued expenses, current trade or other accounts payable
and other current liabilities arising in the ordinary course of
business and not incurred through the borrowing of money, provided
that the same shall be paid when due except to the extent being
contested in good faith and by appropriate proceedings;
(ii) 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;
(iii) Indebtedness due under the Loan Documents;
(iv) Indebtedness to Fairfax Inc. in amounts not in excess of
$50,000,000, which such Indebtedness shall not have any principal
payments due, or be subject to redemption prior to the Termination
Date and no prepayments or redemption thereon shall be made pursuant
to the Termination Date;
(v) Indebtedness in an amount of up to $100,000,000 issued
pursuant to a private placement dated December 2001; and
(vi) Other Indebtedness in an amount not in excess of
$10,000,000 at any time outstanding.
(c) Liens.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, or enter into or suffer to exist any agreement or
restriction that prohibits or conditions the creation, incurrence or
assumption of, any Lien upon or with respect to any part of its property
or assets, whether now owned or hereafter acquired, or agree to do any
of the foregoing, other than the following (collectively, "Permitted
Liens"):
(i) Liens (y) in existence on the Closing Date and set forth on
Schedule 7.3 and (z) arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any such Lien,
provided that such Indebtedness is not increased and is not secured
by any additional assets;
(ii) Liens imposed by law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar
Liens incurred in the ordinary course of business for sums
33
not constituting borrowed money that are not overdue for a period of
more than thirty (30) days or that are being contested in good faith
by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
(iii) Liens (other than any lien imposed by ERISA, the creation
or incurrence of which would result in an Event of Default under
Section 8.1(h)) incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure the
performance of letters of credit, bids, tenders, statutory
obligations, surety and appeal bonds, leases, government contracts
and other similar obligations (other than obligations for borrowed
money) entered into in the ordinary course of business;
(iv) Liens for taxes, assessments or other governmental charges
or statutory obligations, that are not delinquent or remain payable
without any penalty or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
(v) Liens in connection with pledges and deposits made pursuant
to statutory and regulatory requirements of Insurance Regulatory
Authorities by an Insurance Subsidiary in the ordinary course of its
business, for the purpose of securing regulatory capital or
satisfying other financial responsibility requirements;
(vi) with respect to any real property occupied by the Borrower
or any of its Subsidiaries, all easements, rights of way, licenses
and similar encumbrances on title that do not materially impair the
use of such property for its intended purposes; and
(vii) Liens (other than Liens specified in clauses (a) through
(f) above) securing obligations in the aggregate principal amount not
exceeding, at any time $5,000,000.
Without limiting the foregoing, the Borrower will not, and will not
permit or cause any of its Subsidiaries to, directly or indirectly,
make, create, incur, assume or suffer to exist, or enter into any Lien
upon the capital stock of any Subsidiary of the Borrower.
(d) Investments; Acquisitions.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, purchase, own, invest in or
otherwise acquire any capital stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person,
or make or permit to exist any loans, advances or extensions of credit
to, or any investment in cash or by delivery of property in, any other
Person, or purchase or otherwise acquire (whether in one or a series of
related transactions) any portion of the assets, business or properties
of another Person, or create or acquire any Subsidiary, or become a
partner or joint venturer in any partnership or joint venture
(collectively, "Investments"), or make a commitment or otherwise agree
to do any of the foregoing, if, immediately after any such Investment,
the amount of the cash, Cash Equivalents and Investment Grade Securities
owned by the Borrower and its Subsidiaries, on a consolidated basis,
would be less than eighty percent (80%) of the total Invested Assets of
the Borrower and its Subsidiaries determined as of the end of the most
recent fiscal quarter; provided that neither the Borrower nor any of its
Subsidiaries will make or permit any Investment in the Guarantor or any
of its Subsidiaries and Affiliates, other than in the Borrower and its
Subsidiaries.
(e) Restricted Payments.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, 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
34
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) dividends, payments, distributions, acquisitions, purchases,
retirements or redemptions not in excess of $12,500,000 in any fiscal year
may be made; and
(C) in addition to the amounts permitted under clause (ii), dividends,
payments, distributions, acquisitions, purchases, retirements or
redemptions may be made in any fiscal quarter in an amount not greater than
50% of (A) Consolidated Net Income for such fiscal quarter minus (B)
$15,000,000, so long as such amounts paid in reliance to this clause (iii)
in any fiscal year shall not exceed $12,500,000.
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.
(f) Transactions with Affiliates.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, enter into any 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 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:
(i) transactions described on Schedule 7.6 or otherwise
expressly permitted hereunder; and
(ii) the payment by the Borrower of reasonable and customary
fees to members of its board of directors.
(g) Certain Amendments.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, (a) amend, modify or waive, or permit the amendment,
modification or waiver of, any provision of any agreement or instrument
evidencing 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.
(h) Lines of Business.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, 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.
(i) Limitations on Certain Restrictions.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, 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
35
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.
(j) Fiscal Year.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31.
(k) Accounting Changes.
The Borrower will not, and will not permit or cause any of its
Subsidiaries to, make or permit any material change in its accounting
policies or financial reporting practices, except as may be required by
GAAP or Statutory Accounting Practices, as applicable, and any change to
an accounting principle that can be demonstrated by the Borrower to be
"preferable" in accordance with Statements on Auditing Standards No. 58
as promulgated by the Auditing Standards Board.
(l) Reinsurance Agreements.
The Borrower will not, and will not permit or cause any of its
Insurance Subsidiaries to be or become a party to any reinsurance
agreements with any reinsurer not rated "A-" or better by A.M. Best &
Company or S&P except (a) as listed on Schedule 7.12 (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.
(m) Capital Expenditures. The Borrower will not, and will not permit
any of its Subsidiaries to, make or commit Capital Expenditures in any
fiscal year in excess of $10,000,000 in the aggregate.
(n) Pari Passu. The Borrower will not, and will not permit any
Subsidiary to, 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 7.3, unless the Obligations
shall be secured and supported on a pari passu basis in form satisfactory
to the Required Lenders.
1.8
EVENTS OF DEFAULT
(a) Event of Default. Any of the following shall constitute an "Event
of Default":
(i) Non-Payment. The Borrower fails to make, (i) when and as
required to be made herein, payments of any amount of principal of any
Loan, or (ii) within three days after the same becomes due, payment of
any interest, fee or any other amount payable hereunder or under any
other Loan Document; or
(ii) Representation or Warranty. Any representation or warranty by
the Borrower or the Guarantor or any Subsidiary of the Borrower made or
deemed made herein, in any other Loan Document, or which is contained in
any certificate, document or financial or other statement by the
Borrower, the Guarantor, any Subsidiary of the Borrower, or any
Responsible Officer, furnished at any time under this Agreement, or in
or under any other Loan Document is incorrect in any material respect on
or as of the date made or deemed made; or
(iii) Specific Defaults. The Borrower fails to perform or observe
any term, covenant or agreement contained in any of Sections 6.3,
6.4(a), 6.11 or in Article VII; or
(iv) Other Defaults. The Guarantor, the Borrower or any of the
Subsidiaries of the Borrower fails to observe, perform or comply with
any condition, covenant or agreement contained in this Agreement or any
of the other Loan Documents and such failure shall continue unremedied
for any grace period specifically applicable thereto or, if no such
grace period is applicable, for a period after
36
the Borrower acquires knowledge thereof of (a) five (5) days with
respect to covenants set forth in Sections 6.1 or 6.2 or (b) thirty (30)
days with respect to any other condition, covenant or agreement; or
(v) Cross-Default. The Guarantor, the Borrower or any of the
Subsidiaries of Borrower shall (a) fail to pay when due (whether by
scheduled maturity, acceleration or otherwise and after giving effect to
any applicable grace period) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this
Agreement) having an aggregate principal amount of at least $5,000,000;
or (b) fail to observe, perform or comply with any condition, covenant
or agreement contained in any agreement or instrument evidencing or
relating to any such Indebtedness, or any other event shall occur or
condition exist in respect thereof, and the effect of such failure,
event or condition is to cause, or permit the holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to cause
(with the giving of no lapse of time, or both), such Indebtedness to
become due, or to be prepaid, redeemed, purchased or defeased, prior to
its stated maturity; or
(vi) Insolvency; Voluntary Proceeding. The Guarantor, the Borrower
or any of the Subsidiaries of the Borrower shall (a) file a voluntary
petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any
other relief under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, (b)
consent to the institution of, or fail to controvert in a timely and
appropriate manner, any petition or case of the type described in
subsection (a) above, (c) apply for or consent to the appointment of or
taking possession by a custodian, trustee, receiver or similar official
for or of itself or all or a substantial part of its properties or
assets, (d) fail generally, or admit in writing its inability, to pay
its debts generally as they become due, (e) make a general assignment
for the benefit of creditors or (f) take any corporate action to
authorize or approve any of the foregoing; or
(vii) Involuntary Proceedings. (i) Any involuntary petition or
case shall be filed or commenced against the Guarantor, the Borrower or
any of the Subsidiaries of the Borrower seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it
or all or a substantial part of its properties or any other relief under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, and such petition or case
shall continue undismissed and unstayed for a period of sixty (60) days;
or an order, judgment or decree approving or ordering any of the
foregoing shall be entered in any such proceeding and (ii) any Insurance
Regulatory Authority or other Governmental Authority having jurisdiction
shall issue any order of conservation, supervision, rehabilitation or
liquidation or any other order of similar effect in respect of any
Insurance Subsidiary, and such action, individually or in the aggregate,
would be reasonably likely to have a Material Adverse Effect; or
(viii) ERISA. Any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $5,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a Trustee to be
appointed to administer any Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating that
any Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more Multiemployer Plans which could
cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $5,000,000; or
(ix) Monetary Judgments. Any one or more money judgments, writs or
warrants of attachment, executions or similar processes involving an
aggregate amount (exclusive of amounts fully
37
bonded or covered by insurance as to which the surety or insurer, as the
case may be, has acknowledged its liability in writing) in excess of
$5,000,000 (other than a liability of an Insurance Subsidiary under an
insurance contract written in the ordinary course of business) shall be
entered or filed against the Guarantor, the Borrower or any of the
Subsidiaries of the Borrower or any of their respective properties, and
the same shall not be dismissed, stayed or discharged for a period of
thirty (30) days; or
(x) Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against the Guarantor, the Borrower or any Subsidiary
of the Borrower which does or would reasonably be expected to have a
Material Adverse Effect, and there will be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(xi) Change of Control. There occurs any Change of Control; or
Loss of Licenses. Any one or more licenses, permits, accreditations or
authorizations of the Borrower of any of its Subsidiaries shall be suspended,
limited or terminated or shall not be renewed, or any other action shall be
taken, by any Governmental Authority in response to any alleged failure by the
Borrower or any of its Subsidiaries to be in compliance with applicable
Requirements of Law, and such action, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect; or
(b) Remedies. If any Event of Default occurs, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders,
(i) by notice of any Event of Default under this Agreement, 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, except as provided above, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by
the Borrower provided that no such notice shall be required in respect
of an Event of Default under subsections (f) or (g) of Section 8.1; and
(ii) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or
applicable law; provided, however, that upon the occurrence of any event
specified in subsection (f) or (g) of Section 8.1 (in the case of clause
(i) of subsection (g) upon the expiration of the 60-day period mentioned
therein), the obligation of each Lender to make Loans shall
automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the
Administrative Agent or any Lender.
(c) Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any
other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or
hereafter arising.
1.9
THE AGENT
(a) Appointment and Authorization; "Administrative Agent." Each Lender
hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any
38
other Loan Document or otherwise exist against the Administrative Agent. Without
limiting the generality of the foregoing sentence, the use of the term
"administrative agent" in this Agreement with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.
(b) Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
(c) Liability of Administrative Agent. None of the Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of the Lenders for any recital, statement, representation or warranty made by
the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of or title to any
Collateral, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Administrative Agent-Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any of the Borrower's Subsidiaries or Affiliates.
(d) Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders.
(ii) For purposes of determining compliance with the conditions
specified in Article IV, each Lender that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Administrative Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender.
(e) Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required
39
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
(f) Credit Decision. Each Lender acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon any Administrative Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries, the value of and title to any Collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Administrative Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into the possession
of any of the Administrative Agent-Related Persons.
(g) Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Administrative Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), pro rata, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to the Administrative Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Administrative Agent.
(h) Administrative Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Subsidiaries and Affiliates as though Bank of America were not
the Administrative Agent hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of
America or its Affiliates may receive information regarding the Borrower or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Borrower or such Subsidiary) and acknowledge that
the Administrative Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Administrative Agent, and the terms "Lender"
and "Lenders" include Bank of America in its individual capacity.
(i) Successor Administrative Agent. The Administrative Agent may, and at
the request of the Required Lenders shall, resign as Administrative Agent upon
30 days' notice to the Lenders. If the Administrative
40
Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation of
the Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor
administrative agent as provided for above.
(j) Withholding Tax. Each Lender, and each holder of a participation
interest herein, that is a "foreign corporation, partnership or trust" within
the meaning of the Code shall deliver to Administrative Agent, prior to receipt
of any payment subject to withholding (or after accepting an assignment or
receiving a participation interest herein), two duly signed completed copies of
either Form W-8BEN or any successor thereto (relating to such Person and
entitling it to a complete exemption from withholding on all payments to be made
to such Person by Borrower pursuant to this Agreement) or Form W-8ECI or any
successor thereto (relating to all payments to be made to such Person by
Borrower pursuant to this Agreement) of the United States Internal Revenue
Service or such other evidence satisfactory to Borrower and Administrative Agent
that no withholding under the federal income tax laws is required with respect
to such Person. Thereafter and from time to time, each such Person shall (a)
promptly submit to Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities) as may then
be available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to Borrower and Administrative Agent of any
available exemption from, United States withholding taxes in respect of all
payments to be made to such Person by Borrower pursuant to this Agreement, and
(b) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office, if any) to avoid any
requirement of applicable laws that Borrower make any deduction or withholding
for taxes from amounts payable to such Person. If such Persons fails to deliver
the above forms or other documentation, then Administrative Agent may withhold
from any interest payment to such Person an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of the Code, without
reduction. If any Governmental Authority asserts that Administrative Agent did
not properly withhold any tax or other amount from payments made in respect of
such Person, such Person shall indemnify Administrative Agent therefor,
including all penalties and interest and costs and expenses (including Attorney
Costs) of Administrative Agent. The obligation of Persons under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of Administrative Agent.
(k) Syndication Agent; Documentation Agent. None of the Lenders identified
on the facing page or signature pages of this Agreement as a "syndication agent
" or "documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified as a "syndication agent " or "documentation agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
41
1.10
MISCELLANEOUS
(a) Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by the Administrative Agent at
the written request of the Required Lenders) and the Borrower and acknowledged
by the Administrative Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Lenders and the Borrower and
acknowledged by the Administrative Agent, do any of the following:
(i) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(ii) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(iii) release the Guaranty;
(iv) change the percentage of the aggregate unpaid principal amount of
the Loans which is required for the Lenders or any of them to take any
action hereunder; or
(v) amend this Section, or Section 2.10, or any provision herein
providing for consent or other action by all Lenders.
(b) Notices. All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Borrower by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 10.2, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 10.2; or, as directed to the Borrower or the Administrative
Agent, to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Administrative Agent.
(ii) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third Business Day
after the date deposited into the U.S. mail, or if delivered, upon
delivery; except that notices pursuant to Article II or IX to the
Administrative Agent shall not be effective until actually received by the
Administrative Agent.
(iii) Any agreement of the Administrative Agent and the Lenders herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Administrative Agent
and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice
and the Administrative Agent and the Lenders shall not have any liability
to the Borrower or other Person on account of any action taken or not taken
by the Administrative Agent or the Lenders in reliance upon such telephonic
or facsimile notice. The obligation of the Borrower to repay the Loans
shall not be affected in any way or to any extent by any failure by the
Administrative Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent
and the Lenders of a confirmation which is at variance with the terms
understood by the Administrative Agent and the Lenders to be contained in
the telephonic or facsimile notice.
(c) No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a
42
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
(d) Costs and Expenses. The Borrower shall:
(i) whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Administrative Agent) and each Lender within five Business Days after
presentation of a statement or invoice (subject to subsection 4.7) for all
reasonable costs and expenses incurred by Bank of America (including in its
capacity as Administrative Agent) and each Lender in connection with the
development, preparation, delivery, administration and execution of, and
any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Loan Document and any other
documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by Bank of America (including in its
capacity as Administrative Agent) and any Lender with respect thereto; and
(ii) pay or reimburse the Administrative Agent, the Lead Arranger and
each Lender within five Business Days after presentation of a statement or
invoice (subject to subsection 4.7) for all costs and expenses (including
reasonable Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of the Loans
(including in connection with any "workout" or restructuring regarding the
Loans, and including in any Insolvency Proceeding or appellate proceeding);
and
(iii) pay or reimburse Bank of America (including in its capacity as
Administrative Agent) within five Business Days after presentation of a
statement or invoice (subject to subsection 4.7) for all appraisal
(including the non-duplicative allocated cost of internal appraisal
services), audit, environmental inspection and review (including the
non-duplicative allocated cost of such internal services), search and
filing costs, fees and expenses, incurred or sustained by Bank of America
(including in its capacity as Administrative Agent) in connection with the
matters referred to under subsections (a) and (b) of this Section.
(e) Borrower Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Borrower shall indemnify, defend and hold the
Administrative Agent-Related Persons, and each Lender and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Administrative Agent or replacement of any Lender) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement
or the Loans or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Borrower shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
(ii) In no event shall any site visit, observation, or testing by the
Administrative Agent or any Lender (or any contractee of the Administrative
Agent or any Lender) be deemed a representation or warranty that Hazardous
Materials are or are not present in, on, or under, the site, or that there
has been or shall be compliance with any Environmental Law. Neither the
Borrower nor any other Person is entitled to rely on any site visit,
observation, or testing by the Administrative Agent or any Lender. Neither
the Administrative Agent nor any Lender owes any duty of care to protect
the Borrower or any
43
other Person against, or to inform the Borrower or any other party of, any
Hazardous Materials or any other adverse condition affecting any site or
property. Neither the Administrative Agent nor any Lender shall be
obligated to disclose to the Borrower or any other Person any report or
findings made as a result of, or in connection with, any site visit,
observation, or testing by the Administrative Agent or any Lender.
(iii) Survival; Defense. The obligations in this Section shall
survive payment of all other Obligations. At the election of any
Indemnified Person, the Borrower shall defend such Indemnified Person using
legal counsel satisfactory to such Indemnified Person in such Person's sole
discretion, at the sole cost and expense of the Borrower. All amounts owing
under this Section shall be paid within 30 days after demand in writing
setting forth in reasonable detail the reason for such demand.
(f) Judgment Currency.
(i) All sums due and payable hereunder shall be paid in United States
Dollars. If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in Dollars into another currency,
the Borrower and the Lenders agree, to the fullest extent permitted bylaw,
that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase United
States Dollars with such other currency on the business day preceding that
on which the final judgment is given.
(ii) The obligation of the Borrower in respect of any sum due from it
to the Lenders hereunder shall, notwithstanding any judgment in a currency
other than Dollars, be discharged only to the extent that on the business
day following receipt by the Lenders of any sum adjudged to be so due in
such other currency the Lenders may in accordance with normal banking
procedures purchase Dollars with such other currency, if the Dollars so
purchased are less than the sum originally due to the Lenders in Dollars,
the Borrower agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Lenders against such loss, and if the Dollars so
purchased exceed the sum originally due to the Lenders in the Dollars, the
Lenders agree to remit to the Borrower such excess.
(g) Marshalling; Payments Set Aside. Neither the Administrative Agent nor
the Lenders shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the
Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment to the
Administrative Agent or the Lenders, or the Administrative Agent or the Lenders
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.
(h) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent and each Lender.
(i) Assignments, Participations, etc. Any Lender may, with the written
consent of the Borrower (at all times other than during the existence of an
Event of Default) and the Administrative Agent, which consent of the Borrower
shall not be unreasonably withheld, at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the Borrower or the
Administrative Agent shall be required in connection with any assignment and
delegation by a Lender to an Eligible Assignee that is an Affiliate of such
Lender) (each an "Assignee") all, or any ratable part of all, of the Loans and
the other rights and obligations of such Lender hereunder, in a minimum amount
of $10,000,000; provided, however, that the Borrower and the Administrative
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment
44
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Borrower and the Administrative Agent by such
Lender and the Assignee; (B) such Lender and its Assignee shall have delivered
to the Borrower and the Administrative Agent an Assignment and Acceptance in the
form of Exhibit C ("Assignment and Acceptance") and (C) the assignor Lender or
Assignee has paid to the Administrative Agent a processing fee in the amount of
$3,500.
(ii) From and after the date that the Administrative Agent notifies
the assignor Lender that it has received (and provided its consent as set
forth in clause (a) above with respect to) an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan
Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents.
(iii) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee.
(iv) Any Lender may at any time sell to one or more commercial banks
or other Persons not property and casualty insurance companies or
Affiliates thereof or Affiliates of the Borrower (a "Participant")
participating interests in any Loan, and the other interests of that Lender
(the "originating Lender") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall remain
solely responsible for the performance of such obligations, (iii) the
Borrower and the Administrative Agent shall continue to deal solely and
directly with the originating Lender in connection with the originating
Lender's rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Lenders as described in the first proviso
to Section 10.1. In the case of any such participation, the Participant
shall be entitled to the benefit of Sections 3.1, 3.3 and 10.5 as though it
were also a Lender hereunder, and if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement.
(v) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR sec.203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
(vi) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide
to the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that no SPC or Granting Lender shall be entitled to receive any
greater amounts pursuant to Section 3.1, 3.3 or 3.4, than the Granting
Lender would have been entitled to receive had the Granting Lender not
otherwise granted such SPC the option to provide any Loan to the Borrower.
Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement
45
shall survive the termination of this Agreement) that, prior to the date
that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not
institute against, or join any other person in instituting against, such
SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof.
Notwithstanding the foregoing, the Granting Lender unconditionally agrees
to indemnify the Borrower, the Administrative Agent and each Lender against
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be incurred by or asserted against the Borrower, the
Administrative Agent, or such Lender, as the case may be, in any way
relating to or arising as a consequence of any such forbearance or delay in
the initiation of any such proceeding against its SPC. Each party hereto
hereby acknowledges and agrees that no SPC shall have the rights of a
Lender hereunder, such rights being retained by the applicable Granting
Lender. Accordingly, and without limiting the foregoing, each party hereby
further acknowledges and agrees that no SPC shall have any voting rights
hereunder and that the voting rights attributable to any Loan made by an
SPC shall be exercised only by the relevant Granting Lender and that each
Granting Lender shall serve as the agent and attorney-in-fact for its SPC
and shall on behalf of its SPC receive any and all payments made for the
benefit of such SPC. In addition, notwithstanding anything to the contrary
contained in this Section 10.9(f), any SPC may (i) with notice to, but
without the prior written consent of, the Borrower and the Administrative
Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans and (ii) disclose
on a confidential basis in accordance with this Agreement any non-public
information relating to its Loans to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC. This section may not be amended without the
written consent of each Granting Lender, all or any part of whose Loan is
being funded by an SPC at the time of such amendment.
(j) Confidentiality. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all non-public information by the Borrower and
provided to it by the Borrower or any Subsidiary, or by the Administrative Agent
on the Borrower's or such Subsidiary's behalf, under this Agreement or any other
Loan Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Borrower or any Subsidiary; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Lender, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Borrower, provided that such source is not bound by a confidentiality agreement
with the Borrower known to the Lender; provided, however, that any Lender may
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Lender is subject or in connection with
an examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the
Administrative Agent, any Lender or their respective Affiliates may be party;
(E) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors; (G) to any Participant or
Assignee, actual or potential, provided that such Person agrees in writing to
keep such information confidential to the same extent required of the Lenders
hereunder; (H) as to any Lender or its Affiliate, as expressly permitted under
the terms of any other document or agreement regarding confidentiality to which
the Borrower or any Subsidiary is party or is deemed party with such Lender or
such Affiliate; and (I) to its Affiliates.
(k) Set-off. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
46
final) at any time held by, and other indebtedness at any time owing by, such
Lender to or for the credit or the account of the Borrower against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Administrative Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrower and
the Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
(l) Notification of Addresses, Lending Offices, Etc. Each Lender shall
notify the Administrative Agent in writing of any changes in the address to
which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
(m) Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original, and
all of said counterparts taken together shall be deemed to constitute but one
and the same instrument.
(n) Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
(i) No Third Parties Benefitted. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the
Lenders, the Administrative Agent and the Administrative Agent-Related
Persons, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any
of the other Loan Documents.
(o) Governing Law and Jurisdiction. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(ii) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY
NEW YORK LAW.
(p) Waiver of Jury Trial. THE BORROWER, THE LENDERS AND THE ADMINISTRATIVE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, PARTICIPANT
OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER,
47
THE LENDERS AND THE ADMINISTRATIVE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(q) Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Borrower,
the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized officers as of the day and
year first above written.
ODYSSEY RE HOLDINGS CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Title: Vice President
BANK OF AMERICA, N.A.,
as Administrative Agent and Lender
By: /s/
------------------------------------------
Title: Vice President
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK,
as Documentation Agent and a Lender
By: /s/
------------------------------------------
Title: Vice President
48
SCHEDULE 2.1
LOANS AND PRO RATA SHARES
PRO RATA
LENDER LOAN SHARE
------ ----------- --------
Bank of America, N.A........................................ $25,000,000 50%
▇▇ ▇▇▇▇▇▇ Chase Bank........................................ $25,000,000 50%
----------- ---
TOTAL..................................................... $50,000,000 100%
=========== ===
SCHEDULE 5.4
LICENSES
Please see attached.
[GRAPHIC OMITTED]
SCHEDULE 5.7
SUBSIDIARIES
Please see attached.
[GRAPHIC OMITTED]
SCHEDULE 5.14(A)
ENVIRONMENTAL MATTERS
NONE
SCHEDULE 5.14(B)
ENVIRONMENTAL MATTERS
NONE
SCHEDULE 5.18
MATERIAL CONTRACTS
1. Administrative Service Agreement between Odyssey America Reinsurance
Corporation and Compagnie Transcontinentale de Reassurance (France),
effective from July 1, 2000
2. Administrative Service Agreement between Odyssey America Reinsurance
Corporation and Compagnie Transcontinentale de Reassurance (Singapore),
effective from July 1, 2000
3. Affiliate Guarantee by Odyssey America Reinsurance Corporation dated as of
July 14, 2000 relating to Compagnie Transcontinentale de Reassurance
4. Blanket Assumption Endorsement Agreement between Ranger Insurance Company
and Odyssey America Reinsurance Corporation dated as of July 1, 1999
5. Tax Allocation Agreement among Fairfax Inc.,
Odyssey Re Holdings Corp.,
Odyssey America Reinsurance Corporation, Odyssey Reinsurance Corporation,
and ▇▇▇▇▇▇ Insurance Company dated as of June 19, 2001
6. Amended and Restated Employment Agreement dated as of April 1, 2001 between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Odyssey Re Holdings Corp.
7. Employment Agreement dated as of October 1, 2001 between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
Odyssey Re Holdings Corp.
8. Employment Agreement dated as of May 23, 2001 between ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
Odyssey Re Holdings Corp.
9. Lease Agreement between Odyssey America Reinsurance Corporation and First
Stamford Place Company in relation to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇
10. Registration Rights Agreement between
Odyssey Re Holdings Corp., TIG
Insurance Company and ORH Holdings Inc dated as of June 19, 2001
11. Investment Management Agreement between ▇▇▇▇▇▇▇ Watsa Investment Counsel
Ltd. and TIG Reinsurance Company dated as of April 13, 1999
12. Investment Management Agreement between ▇▇▇▇▇▇▇ Watsa Investment Counsel
Ltd. and Odyssey Reinsurance Corporation dated as of May 11, 2001
13. Investment Management Agreement between ▇▇▇▇▇▇▇ Watsa Investment Counsel
Ltd. and ▇▇▇▇▇▇ Insurance Company dated as of May 11, 2001
14. Investment Administration Agreement between Fairfax Financial Holdings
Limited and TIG Reinsurance Company dated as of April 13, 1999
15. Investment Administration Agreement between Fairfax Financial Holdings
Limited and Odyssey Reinsurance Corporation dated as of May 11, 2001
16. Investment Administration Agreement between Fairfax Financial Holdings
Limited and ▇▇▇▇▇▇ Insurance Company dated as of May 11, 2001
17. Indemnification Agreements between
Odyssey Re Holdings Corp. and each of its
directors and officers
18. Term Note dated June 19, 2001 issued by
Odyssey Re Holdings Corp. and held
by Fairfax Inc.
19. Investment Management Agreement between ▇▇▇▇▇▇▇ Watsa Investment Counsel
Ltd. and Newline Underwriting Management Ltd. dated as of February 16, 2001
20. Indemnification Agreement in favor of Odyssey Reinsurance Corporation and
▇▇▇▇▇▇ Insurance Company from Fairfax Financial Holdings Limited dated as of
March 22, 2001
21. Indemnification Agreement in favor of Odyssey Reinsurance Corporation from
Fairfax Financial Holdings Limited dated as of March 20, 2001
22. Odyssey America Reinsurance Corporation Restated Employees Retirement Plan
23. Odyssey America Reinsurance Corporation Profit Sharing Plan
24.
Odyssey Re Holdings Corp. Restricted Share Plan
25. Odyssey Re Holdings Corp. Stock Option Plan
26. Odyssey Re Holdings Corp. Long-Term Incentive Plan
27. Odyssey Re Holdings Corp. Employee Share Purchase Plan
28. Odyssey America Reinsurance Corporation 401(k) Excess Plan
29. Odyssey America Reinsurance Corporation Restated Supplemental Retirement
Plan
30. Exchange Agreement among TIG Insurance Company, ORH Holdings Inc. and
Odyssey Re Holdings Corp. dated as of June 19, 2001
31. Tax Services Agreement between Fairfax Inc., Odyssey America Reinsurance
Corporation, and Odyssey Reinsurance Corporation dated as of May 10, 2001
32. Tax Services Agreement between Fairfax Inc. and Odyssey Re Holdings Corp.
dated as of May 10, 2001
33. Note Purchase Agreement dated as of November 15, 2001 among Odyssey Re
Holdings Corp. and the purchasers listed in Schedule A attached thereto
34. Notes due November 30, 2006 issued in connection with the Note Purchase
Agreement dated November 15, 2001
35. Credit Facility dated as of December 31, 2001 among Odyssey Re Holdings
Corp., Bank of America, N.A., as Administrative Agent, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank,
as Documentation Agent, and the other financial institutions party thereto
2
SCHEDULE 5.19
REINSURERS AND COLLATERAL SECURING
CERTAIN REINSURERS' OBLIGATIONS
Please see attached.
[GRAPHIC OMITTED]
SCHEDULE 7.3
PERMITTED LIENS
NONE
SCHEDULE 7.6
TRANSACTIONS WITH AFFILIATES
Please refer to Schedule 5.18 for affiliate transactions.
SCHEDULE 10.2
LENDING OFFICES,
ADDRESSES FOR NOTICES
BANK OF AMERICA, N.A.,
as Administrative Agent
Bank of America, N.A.
Agency Management
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A.,
as Lender
Lending Office and Notices:
Bank of America, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇▇▇ CHASE BANK,
as Lender
Lending Office:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Borrowing Notices):
▇▇ ▇▇▇▇▇▇ Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ODYSSEY RE HOLDINGS CORP.
300 First Stamford Place
Stamford, Conn. 06902
Attention: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 10.2-1
EXHIBIT A
NOTICE OF CONVERSION/CONTINUATION
Date: , 2002
To: Bank of America, N.A., as Administrative Agent for the Lenders parties to
the Amended and Restated Credit Agreement dated as of January 31, 2002, (as
extended, renewed, amended or restated from time to time, the "Credit
Agreement") among Odyssey Re Holdings Corp., certain Lenders which are
signatories thereto, ▇▇ ▇▇▇▇▇▇ Chase Bank, as Documentation Agent and Bank
of America, N.A., as Administrative Agent
Ladies and Gentlemen:
The undersigned, Odyssey Re Holdings Corp., refers to the Credit Agreement,
the terms defined therein being used herein as therein defined, and hereby gives
you notice irrevocably, pursuant to Section 2.3 of the Credit Agreement, of the
[conversion] [continuation] of the Loans specified herein, that:
1. The Conversion/Continuation Date is , 200 .
2. The aggregate amount of the Loans to be [converted] [continued] is
$ .
3. The Loans are to be [converted into] [continued as] [Offshore Rate]
[Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the Loans
included in the [conversion] [continuation] shall be [ months].
ODYSSEY RE HOLDINGS CORP
By:
--------------------------------------
Title:
--------------------------------------
Exhibit A-1
EXHIBIT B
ODYSSEYRE HOLDINGS CORP.
COMPLIANCE CERTIFICATE
Financial Statement Date: , 200
Reference is made to that certain Amended and Restated Credit Agreement
dated as of January 31, 2002 (as extended, renewed, amended or restated from
time to time, the "Credit Agreement") among OdysseyRe Holdings Corp. (the
"Borrower"), the several financial institutions from time to time parties to
this Credit Agreement (the "Lenders"), ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, as documentation
agent and Bank of America National, N.A., as agent for the Banks (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein,
capitalized terms used herein have the respective meanings assigned to them in
the Credit Agreement.
The undersigned Responsible Officer of , 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 Lender and
the Administrative Agent on the behalf of the Company and its consolidated
Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.1(a)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of the fiscal year ended , 200 and (b) the
related consolidated statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit and
accompanied by the opinion of a nationally recognized certified independent
public accounting firm (the "Independent Auditor") which report shall state that
such consolidated financial statements are complete and correct and have been
prepared in accordance with GAAP, and fairly present, in all material respects,
the financial position of the Borrower and its consolidated Subsidiaries for the
periods indicated and on a basis consistent with prior periods.
OR
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection [6.1(b)] of the Credit
Agreement.]
1. Attached as Schedule 1 hereto are (a) a true and correct copy of the
unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of the end of the fiscal quarter ended , 200 , and
(b) the related unaudited consolidated statements of income, and cash flows for
the period commencing on the first day and ending on the last day of such
quarter, prepared in accordance with GAAP (subject only to ordinary, good faith
year-end audit adjustments and the absence of footnotes) and fairly presenting,
in all material respects, the financial position and the results of operations
of the Borrower and its consolidated Subsidiaries.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Borrower during the accounting period covered by the attached
financial statements.
3. To the best of the undersigned's knowledge, the Borrower, during such
period, has observed, performed or satisfied all of its covenants and other
agreements, and satisfied every condition in the Credit Agreement to be
observed, performed or satisfied by the Company, and the undersigned has no
knowledge of any Default or Event of Default.
Exhibit B-1
4. The following financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
, 200 .
ODYSSEY RE HOLDINGS CORP
By:
--------------------------------------
Title:
--------------------------------------
Exhibit B-2
SCHEDULE 2
to the Compliance Certificate
($ in 000's Calculation of Financial Covenants)
Exhibit B-3
EXHIBIT C
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of , is made between (the "Assignor") and
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Amended and Restated Credit
Agreement dated as of January 31, 2002 (as amended, amended and restated,
modified, supplemented or renewed, the "Credit Agreement") among OdysseyRe
Holdings Corp., Bank of America, N.A., as Administrative Agent, ▇▇ ▇▇▇▇▇▇ Chase
Bank, as Documentation Agent, and the various Lenders (including the Assignor)
which are parties thereto. Any terms defined in the Credit Agreement and not
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has made
Loans to the Borrower in an aggregate amount of $ ;
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Loans in an amount equal to $ (the "Assigned Amount") on the terms
and subject to the conditions set forth herein and the Assignee wishes to accept
assignment of such rights and to assume such obligations from the Assignor on
such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Assignment and Acceptance,
(i) the Assignor hereby sells, transfers and assigns to the Assignee, and (ii)
the Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) % (the "Assignee's Percentage Share") of the
Loans of the Assignor and all related rights, benefits, obligations, liabilities
and indemnities of the Assignor under and in connection with the Credit
Agreement and the other Loan Documents.
[If appropriate, add paragraph specifying payment to Assignor by Assignee of
outstanding principal of, accrued interest on, and fees with respect to, Loans
assigned.]
(b) With effect on and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Lender
under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with Loans in an amount
equal to the Assigned Amount (in addition to any such rights and obligations
theretofore held by it). The Assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender. The Assignor shall
relinquish its rights and be released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee;
provided, however, the Assignor shall not relinquish its rights under Article
III and Section 8.4 of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignee's Loans will be $ .
(d) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignor's Loans will be $ .
Exhibit C-1
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to $ .
(b) The [Assignor] [Assignee] agrees to pay to the Administrative Agent a
processing fee in the amount specified in Section 8.8(a) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignee. Each of
the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Credit
Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be , 20 (the "Effective Date");
provided that the following conditions precedent have been satisfied on or
before the Effective Date:
(i) this Assignment and Acceptance shall have been executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Borrower, if needed, and the Administrative
Agent required for an effective assignment of the Assigned Amount by the
Assignor to the Assignee under Section 8.8(a) of the Credit Agreement shall
have been duly obtained and shall be in full force and effect as of the
Effective Date;
(iii) the Assignee shall have paid to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with Section 8.8(a) of the
Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and in
Section 8.8(a) of the Credit Agreement shall have been paid to the
Administrative Agent; and
(vi) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Pro Rata Share of the rights
and obligations of the Assignor with respect to the Loans and under the
Credit Agreement (if such agreement exists).
(b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Borrower and the Administrative Agent for
acknowledgment by the Administrative Agent, a Notice of Assignment substantially
in the form attached hereto as Schedule 1.
Exhibit C-2
6. AGENT. [INCLUDE ONLY IF ASSIGNOR IS THE ADMINISTRATIVE AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take such
action as Administrative Agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to the Administrative Agent by the Lenders
pursuant to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the Assignor
in its capacity as Administrative Agent under the Credit Agreement.
7. WITHHOLDING TAX.
The Assignee (a) represents and warrants to the Assignor, the
Administrative Agent and the Borrower that under applicable law and treaties no
tax will be required to be withheld with respect to any payments to be made to
the Assignee under the Credit Agreement, (b) agrees to furnish (if it is
organized under the laws of any jurisdiction other than the United States or any
State thereof) to the Administrative Agent and the Borrower prior to the time
that the Administrative Agent or Borrower is required to make any payment of
principal, interest or fees under the Credit Agreement, duplicate executed
originals of either U.S. Internal Revenue Service Form W-9 or U.S. Internal
Revenue Service Form W-8BEN (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Borrower or the performance or observance by the Borrower of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and apart from any
agreements or
Exhibit C-3
undertakings or filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; and (iv) it is
an Eligible Assignee.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrower or the Administrative Agent which may be required in
connection with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK. The Assignor and the Assignee
each irrevocably submits to the non-exclusive jurisdiction of any State or
Federal court sitting in
New York,
New York over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such
New York State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
[Other provisions to be added as may be negotiated between the Assignor and
the Assignee, provided that such provisions are not inconsistent with the Credit
Agreement.]
Exhibit C-4
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
--------------------------------------
Title:
--------------------------------------
By:
--------------------------------------
Title:
--------------------------------------
Address:
[ASSIGNEE]
By:
--------------------------------------
Title:
--------------------------------------
By:
--------------------------------------
Title:
--------------------------------------
Address:
Exhibit C-5
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
,
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Odyssey Re Holdings Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We refer to the Amended and Restated Credit Agreement dated as of January
31, 2002 (as amended, amended and restated, modified, supplemented or renewed,
the "Credit Agreement") among OdysseyRe Holdings Corp., Bank of America, N.A.,
as Administrative Agent, ▇▇ ▇▇▇▇▇▇ Chase Bank, as Documentation Agent, and the
various Lenders which are parties thereto. Terms defined in the Credit Agreement
are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by (the "Assignor") to (the "Assignee")
of $ of Loans made by the Assignor pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). Before
giving effect to such assignment the Assignor's outstanding Loans are
$ .
2. The Assignee agrees that, upon receiving the consent of the
Administrative Agent and, if applicable, the Borrower to such assignment, the
Assignee will be bound by the terms of the Credit Agreement as fully and to the
same extent as if the Assignee were the Lender originally holding such interest
in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address: -----------------------------------------------------------
-----------------------------------------------------------
Assignee name: -----------------------------------------------------------
-----------------------------------------------------------
Address: -----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Attention: -----------------------------------------------------------
Telephone: ( ------------)
---------------------------------------------------
Telecopier: ( ------------)
--------------------------------------------------
Exhibit C-6
(B) Payment Instructions:
Account No.: -----------------------------------------------------------
At: -----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Reference: -----------------------------------------------------------
Attention: -----------------------------------------------------------
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
-----------------------------------------
By:
-----------------------------------------
Title:
[NAME OF ASSIGNEE]
-----------------------------------------
By:
-----------------------------------------
Title:
ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:
ODYSSEYRE HOLDINGS CORP.
By: -----------------------------------------
Title: -----------------------------------------
BANK OF AMERICA, N.A.,
as Administrative Agent
By: -----------------------------------------
Title: -----------------------------------------
Exhibit C-7
EXHIBIT D
[FORM OF] NOTE
$ , 2002
FOR VALUE RECEIVED, the undersigned, OdysseyRe Holdings Corp. (the
"Borrower"), hereby promises to pay to the order of (the "Lender") the
principal sum of Dollars($ ) or, if less, the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant
to the Amended and Restated Credit Agreement, dated as of January 31, 2002 (such
Amended and Restated Credit Agreement, as it may be amended, restated,
supplemented or otherwise modified from time to time, being herein called the
"Credit Agreement"), among the Borrower, Bank of America, N.A., as
Administrative Agent, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, as Documentation Agent, and the
Lenders which are parties thereto, on the dates and in the amounts provided in
the Credit Agreement. The Borrower further promises to pay interest on the
unpaid principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
The Lender is authorized to endorse each payment of principal on the Loan
on the schedule annexed hereto and made a part hereof, and continuations thereof
which shall be attached hereto and made a part hereof; provided, that any
failure to endorse such information on such schedule or continuation thereof
shall not in any manner affect any obligation of the Borrower under the Credit
Agreement and this Note (the "Note").
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement, which Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
Terms defined in the Credit Agreement are used herein with their defined
meanings therein unless otherwise defined herein. This Note shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
ODYSSEYRE HOLDINGS CORP
By:
-------------------------------------------
Title:
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Exhibit D-1
SCHEDULE TO NOTE
LOANS AND REPAYMENT OF LOANS
AMOUNT AMOUNT NOTATION
DATE OF LOAN REPAID MADE BY
---- -------- -------- --------
Exhibit D-2
EXHIBIT E
GUARANTOR CONSENT
Reference is made to the Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of January 31, 2002 among OdysseyRe Holdings Corp., certain
lenders, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, as Documentation Agent, and Bank of America,
N.A., as Administrative Agent. All capitalized terms used in the Credit
Agreement shall have the meanings set forth therein unless otherwise defined or
the context otherwise requires. The Credit Agreement is an amendment and
restatement of a Credit Agreement dated as of December 31, 2001 (the "Existing
Credit Agreement"). Pursuant to the Existing Credit Agreement, the undersigned
delivered a guaranty (the "Guaranty") dated as of December 31, 2001. The
undersigned hereby reaffirms its obligations under the Guaranty and agrees that
all references in the Guaranty to the Existing Credit Agreement shall be deemed
references to the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Consent this 31st day
of January, 2002.
FAIRFAX FINANCIAL HOLDINGS LIMITED
By:
-------------------------------------------
Title:
-------------------------------------------
Exhibit E-1
CERTIFICATE
The undersigned as -------------------- of OdysseyRe Holdings Corp. hereby
certifies that:
(a) The representations and warranties contained in Article V of the
Credit Agreement are true and correct in all material respects on and as of
the date hereof, as though made on and as of such date;
(b) No Default or Event of Default exists;
(c) There has occurred since September 30, 2001, no event or
circumstances that has resulted or could reasonably be expected to result
in a Material Adverse Effect; and
(d) No actions, suits, investigations or proceedings are pending or to
my knowledge threatened, in any court or before any arbitrator or
governmental authority that if adversely determined would have a Material
Adverse Effect.
Reference is made to the Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of January 31, 2002 among OdysseyRe Holdings Corp., certain
Lenders, Bank of America, N.A., as Administrative Agent and ▇▇ ▇▇▇▇▇▇ Chase
Bank, as Documentation Agent. All the defined terms used in this Certificate
shall have the meanings set forth in the Credit Agreement unless otherwise
defined or the context otherwise requires.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this 31st
day of January, 2002.
ODYSSEYRE HOLDINGS CORP
By:
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Title:
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TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS................................................. 1
1.1 Certain Defined Terms....................................... 1
1.2 Other Interpretive Provisions............................... 18
1.3 Accounting Principles....................................... 19
ARTICLE II THE CREDITS................................................. 19
2.1 Terms of Commitments........................................ 19
2.2 Loan Accounts............................................... 20
2.3 Procedure for Borrowing..................................... 20
2.4 Conversion and Continuation Elections....................... 21
2.5 Voluntary Termination or Reduction of Commitments........... 22
2.6 Optional Prepayments........................................ 22
2.7 Mandatory Prepayments of Loans; Mandatory Commitment 23
Reductions..................................................
2.8 Use of Proceeds............................................. 23
2.9 Interest.................................................... 23
2.10 Fees........................................................ 24
2.11 Computation of Fees and Interest............................ 25
2.12 Payments by the Borrower.................................... 25
2.13 Payments by the Lenders to the Administrative Agent......... 25
2.14 Sharing of Payments, Etc.................................... 26
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...................... 27
3.1 Taxes....................................................... 27
3.2 Illegality.................................................. 28
3.3 Increased Costs and Reduction of Return..................... 28
3.4 Funding Losses.............................................. 29
3.5 Inability to Determine Rates................................ 29
3.6 Certificates of Lenders..................................... 30
3.7 Substitution of Lenders..................................... 30
3.8 Survival.................................................... 30
ARTICLE IV CONDITIONS PRECEDENT........................................ 30
4.1 Conditions of Initial Loans................................. 30
4.2 Conditions to All Borrowings................................ 32
ARTICLE V REPRESENTATIONS AND WARRANTIES.............................. 32
5.1 Corporate Existence and Power............................... 32
5.2 Corporate Authorization..................................... 32
5.3 No Violation................................................ 33
5.4 Third Party Consent......................................... 33
5.5 Litigation.................................................. 33
5.6 Taxes....................................................... 34
5.7 Subsidiaries................................................ 34
5.8 Full Disclosure............................................. 34
5.9 Margin Regulations.......................................... 34
5.10 No Material Adverse Affect.................................. 35
5.11 Financial Matters........................................... 35
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PAGE
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5.12 Ownership of Properties..................................... 36
5.13 ERISA....................................................... 36
5.14 Environmental Matters....................................... 36
5.15 Compliance with Laws........................................ 37
5.16 Regulated Industries........................................ 37
5.17 Insurance................................................... 37
5.18 Certain Contracts........................................... 38
5.19 Reinsurance Agreements...................................... 38
ARTICLE VI AFFIRMATIVE COVENANTS....................................... 38
6.1 GAAP Financial Statements................................... 39
6.2 Statutory Financial Statements.............................. 39
6.3 Other Business and Financial Information.................... 40
6.4 Corporate Existence; Franchises; Maintenance of 43
Properties..................................................
6.5 Compliance with Laws........................................ 43
6.6 Payment of Obligations...................................... 43
6.7 Insurance................................................... 44
6.8 Maintenance of Books and Records; Inspection................ 44
6.9 Dividends................................................... 44
6.10 Ownership of Insurance Subsidiaries......................... 45
6.11 Financial Covenants......................................... 45
ARTICLE VII NEGATIVE COVENANTS.......................................... 45
7.1 Merger; Consolidation; Disposition of Assets................ 45
7.2 Indebtedness................................................ 46
7.3 Liens....................................................... 46
7.4 Investments; Acquisitions................................... 47
7.5 Restricted Payments......................................... 48
7.6 Transactions with Affiliates................................ 48
7.7 Certain Amendments.......................................... 48
7.8 Lines of Business........................................... 49
7.9 Limitations on Certain Restrictions......................... 49
7.10 Fiscal Year................................................. 49
7.11 Accounting Changes.......................................... 49
7.12 Reinsurance Agreements...................................... 49
7.13 Capital Expenditures........................................ 49
ARTICLE VIII EVENTS OF DEFAULT........................................... 50
8.1 Event of Default............................................ 50
8.2 Remedies.................................................... 52
8.3 Rights Not Exclusive........................................ 52
ARTICLE IX THE AGENT................................................... 52
9.1 Appointment and Authorization; Administrative Agent......... 53
9.2 Delegation of Duties........................................ 53
9.3 Liability of Administrative Agent........................... 53
9.4 Reliance by Administrative Agent............................ 53
9.5 Notice of Default........................................... 54
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PAGE
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9.6 Credit Decision............................................. 54
9.7 Indemnification of Administrative Agent..................... 55
9.8 Administrative Agent in Individual Capacity................. 55
9.9 Successor Administrative Agent.............................. 55
9.10 Withholding Tax............................................. 56
9.11 Syndication Agent; Documentation Agent...................... 57
ARTICLE X MISCELLANEOUS............................................... 57
10.1 Amendments and Waivers...................................... 57
10.2 Notices..................................................... 57
10.3 No Waiver; Cumulative Remedies.............................. 58
10.4 Costs and Expenses.......................................... 58
10.5 Borrower Indemnification.................................... 59
10.6 Marshalling; Payments Set Aside............................. 60
10.7 Successors and Assigns...................................... 60
10.8 Assignments, Participations, etc............................ 60
10.9 Confidentiality............................................. 62
10.10 Set-off..................................................... 62
10.11 Notification of Addresses, Lending Offices, Etc............. 62
10.12 Counterparts................................................ 63
10.13 Severability................................................ 63
10.14 No Third Parties Benefitted................................. 63
10.15 Removal and Replacement of Lenders.......................... 63
10.16 Governing Law and Jurisdiction.............................. 63
10.17 Waiver of Jury Trial........................................ 64
10.18 Entire Agreement............................................ 64
iii
SCHEDULES
Schedule 1.1 Management Group
Schedule 2.1 Loans
Schedule 5.4 Licenses
Schedule 5.6 Taxes
Schedule 5.7 Subsidiaries
Schedule 5.14(a) Environmental Matters
Schedule 5.14(b) Environmental Matters
Schedule 5.18 Material Contracts
Reinsurers and Collateral Securing Certain Reinsurers'
Schedule 5.19 Obligations
Schedule 7.3 Permitted Liens
Schedule 7.6 Transactions with Affiliates
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Borrower's and Guarantor's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
Exhibit G Form of Guaranty
iv