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[Published CUSIP Number: ________]
LETTER OF CREDIT AGREEMENT
Dated as of August 18, 2005
Among
SCOTTISH RE (DUBLIN) LIMITED,
as Borrower,
SCOTTISH ANNUITY & LIFE INSURANCE COMPANY (CAYMAN) LTD.,
as Guarantor
BANK OF AMERICA, N.A.,
as Administrative Agent
and
L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.............................1
1.01 Defined Terms...................................................1
1.02 Other Interpretive Provisions..................................19
1.03 Accounting Terms...............................................19
1.04 Rounding.......................................................20
1.05 Times of Day...................................................20
1.06 Letter of Credit Amounts.......................................20
ARTICLE II. THE COMMITMENTS AND L/C CREDIT EXTENSIONS...................20
2.01 Letters of Credit..............................................20
2.02 Termination or Reduction of Commitments........................28
2.03 Fees...........................................................28
2.04 Computation of Interest and Fees...............................29
2.05 Evidence of Debt...............................................29
2.06 Payments Generally; Administrative Agent's Clawback............29
2.07 Sharing of Payments by Lenders.................................30
2.08 SALIC as Agent of the Borrower.................................31
2.09 Increase in Commitments........................................31
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY......................32
3.01 Taxes..........................................................32
3.02 Illegality.....................................................35
3.03 Increased Costs................................................35
3.04 Mitigation Obligations; Replacement of Lenders.................36
3.05 Survival.......................................................37
ARTICLE IV. CONDITIONS PRECEDENT TO L/C CREDIT EXTENSIONS...............37
4.01 Conditions of Effective Date...................................37
4.02 Conditions to All L/C Credit Extensions........................38
ARTICLE V. REPRESENTATIONS AND WARRANTIES..............................39
5.01 Existence, Qualification and Power; Compliance with Laws.......39
5.02 Authorization; No Contravention................................39
5.03 Governmental Authorization; Other Consents.....................39
5.04 Binding Effect.................................................40
5.05 Financial Statements; No Material Adverse Effect...............40
5.06 Litigation.....................................................40
5.07 No Default.....................................................41
5.08 Ownership of Property; Liens...................................41
5.09 Environmental Compliance.......................................41
5.10 Insurance......................................................41
5.11 Taxes..........................................................41
5.12 ERISA and Foreign Benefit Plan Compliance......................41
TABLE OF CONTENTS
(continued)
Page
5.13 Subsidiaries...................................................42
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act............................................42
5.15 Disclosure.....................................................43
5.16 Compliance with Laws...........................................43
5.17 Representations as to Loan Parties.............................43
ARTICLE VI. AFFIRMATIVE COVENANTS.......................................44
6.01 Financial Statements...........................................44
6.02 Certificates; Other Information................................45
6.03 Notices........................................................48
6.04 Payment of Obligations.........................................48
6.05 Preservation of Existence, Etc.................................49
6.06 Maintenance of Properties......................................49
6.07 Maintenance of Insurance.......................................49
6.08 Compliance with Laws...........................................49
6.09 Books and Records..............................................49
6.10 Inspection Rights..............................................49
6.11 Use of Proceeds................................................50
6.12 Approvals and Authorizations...................................50
ARTICLE VII. NEGATIVE COVENANTS..........................................50
7.01 Liens..........................................................50
7.02 Investments....................................................51
7.03 Indebtedness...................................................52
7.04 Fundamental Changes............................................53
7.05 Dispositions...................................................54
7.06 Restricted Payments............................................54
7.07 Change in Nature of Business...................................55
7.08 Transactions with Affiliates...................................55
7.09 Burdensome Agreements..........................................55
7.10 Use of Proceeds................................................55
7.11 Financial Covenants............................................55
7.12 Restrictions On Negative Pledge Agreements.....................56
7.13 Acquisitions...................................................57
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES..............................57
8.01 Events of Default..............................................57
8.02 Remedies Upon Event of Default.................................59
8.03 Application of Funds...........................................59
ARTICLE IX. AGENT.......................................................60
9.01 Appointment and Authority......................................60
9.02 Rights as a Lender.............................................60
9.03 Exculpatory Provisions.........................................61
ii
TABLE OF CONTENTS
(continued)
Page
9.04 Reliance by Administrative Agent...............................61
9.05 Delegation of Duties...........................................62
9.06 Resignation of Administrative Agent............................62
9.07 Non-Reliance on Administrative Agent and Other Lenders.........63
9.08 No Other Duties, Etc...........................................63
9.09 Administrative Agent May File Proofs of Claim..................63
ARTICLE ▇. ▇▇▇▇▇ GUARANTEE.............................................64
10.01 Unconditional Guarantee........................................64
10.02 Guarantee Absolute.............................................64
10.03 Waivers........................................................65
10.04 Subrogation....................................................65
10.05 Survival.......................................................66
ARTICLE XI. MISCELLANEOUS...............................................66
11.01 Amendments, Etc................................................66
11.02 Notices; Effectiveness; Electronic Communication...............67
11.03 No Waiver; Cumulative Remedies.................................69
11.04 Expenses; Indemnity; Damage Waiver.............................69
11.05 Payments Set Aside.............................................71
11.06 Successors and Assigns.........................................71
11.07 Treatment of Certain Information; Confidentiality..............74
11.08 Right of Setoff................................................75
11.09 Interest Rate Limitation.......................................75
11.10 Counterparts; Integration; Effectiveness.......................76
11.11 Survival of Representations and Warranties.....................76
11.12 Severability...................................................76
11.13 Replacement of Lenders.........................................76
11.14 Governing Law; Jurisdiction; Etc...............................77
11.15 Waiver of Jury Trial...........................................78
11.16 USA PATRIOT Act Notice.........................................78
11.17 Judgment Currency..............................................79
11.18 ENTIRE AGREEMENT...............................................79
11.19 Lender Status..................................................79
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SCHEDULES
1.02 Applicable Percentage for Eligible Investments
2.01 Commitments and Applicable Percentages
5.13 Subsidiaries
7.01 Existing Liens
7.03 Existing Indebtedness
11.02 Administrative Agent's Office; Certain Addresses for Notices
EXHIBITS
Form of
A Compliance Certificate
B Assignment and Assumption
C Opinion Matters
LETTER OF CREDIT AGREEMENT
This LETTER OF CREDIT AGREEMENT ("Agreement") is entered into as of August
18, 2005, among SCOTTISH RE (DUBLIN) LIMITED, a limited company incorporated and
existing under the laws of Ireland (the "Borrower"), SCOTTISH ANNUITY & LIFE
INSURANCE COMPANY (CAYMAN) LTD., a Cayman Islands exempted company with limited
liability ("SALIC" and, together with the Borrower, each a "Loan Party" and
collectively the "Loan Parties"), each lender from time to time party hereto
(collectively, the "Lenders" and individually, a "Lender"), and BANK OF AMERICA,
N.A., as Administrative Agent, and L/C Issuer.
WHEREAS, the Borrower has requested the Lenders to provide a letter of
credit facility and the Lenders are willing to do so on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means, with respect to any currency, the
Administrative Agent's address and, as appropriate, account as set forth on
Schedule 11.02 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to SALIC and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Letter of Credit Agreement.
"Alternative Reserve Agreements" means funding agreements, collateral
borrowing arrangements and other capital market solutions entered into by the
Parent or its Subsidiaries to meet the regulatory or operational reserve
requirements of an Insurance Subsidiary.
"Applicable Percentage" means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such
Lender's Commitment at such time. If the commitment of each Lender and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the
Applicable Percentage of each Lender shall be determined based on the Applicable
Percentage of such Lender most recently in effect, giving effect to any
subsequent assignments. The initial Applicable Percentage of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Applicable Rate" means, from time to time, the following percentages per
annum, based upon the Parent Debt Rating as set forth below:
Applicable Rate
----------------------------------------------------------------------
Pricing Parent Debt Facility Fee Utilization Letter of
Ratings
Level S&P/▇▇▇▇▇'▇ Fee Credit Fee
----------- ------------------ ------------- ------------ ------------
1 > A-/A3 0.080% 0.100% 0.270%
-
2 > BBB+/Baa1 0.100% 0.100% 0.400%
-
3 > BBB/Baa2 0.125% 0.100% 0.525%
-
4 > BBB-/Baa3 0.175% 0.150% 0.675%
-
5 < BBB-/Baa3 0.250% 0.150% 0.850%
or no rating
"Parent Debt Rating" means, as of any date of determination, the
rating as determined by either S&P or ▇▇▇▇▇'▇ (collectively, the "Parent
Debt Ratings") of the Parent's non-credit-enhanced, senior unsecured
long-term debt; provided that if a Parent Debt Rating is issued by each of
the foregoing rating agencies, then the higher of such Parent Debt Ratings
shall apply (with the Parent Debt Rating for Pricing Level 1 being the
highest and the Parent Debt Rating for Pricing Level 5 being the lowest),
unless there is a split in Parent Debt Ratings of more than one level, in
which case the Pricing Level that is one Pricing Level below the higher
Parent Debt Rating shall apply; provided further that if neither of the
foregoing rating agencies issues a Parent Debt Rating, then Pricing Level V
shall apply.
Initially, the Applicable Rate shall be determined based upon the Parent Debt
Rating specified in the certificate delivered pursuant to Section 4.01(a)(vii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Parent Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by SALIC to the
Administrative Agent of notice thereof pursuant to Section 6.03(e) and ending on
the date immediately preceding the effective date of the next such change and,
in the case of a downgrade, during the period commencing on the date of the
public announcement thereof and ending on the date immediately preceding the
effective date of the next such change.
"Applicable Loan Party Documents" has the meaning specified in Section
5.17(a).
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
2
"Asset Backed Security" means any fixed-income instrument that entitles the
holder of, or beneficial owner under, the instrument to the whole or any part of
the rights or entitlements of a holder of a receivable or other asset and any
other rights or entitlements in respect of a pool of receivables or other assets
or any money payable by obligors under those receivables or other assets
(whether or not the money is payable to the holder of, or beneficial owner
under, the instrument on the same terms and conditions as under the receivables
or other assets) in relation to receivables or other assets; provided however,
such receivables or assets shall be limited to automobile loans, credit card
receivables and home equity loans and such other Asset-Backed Security assets as
may be acceptable to the Administrative Agent.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 11.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit B or any other form approved by the
Administrative Agent.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Annual Statements" means the Statutory Statements of Scottish US
and its Subsidiaries for the fiscal year ended December 31, 2004.
"Audited Financial Statements" means each of (a) with respect to the
Parent, the audited consolidated balance sheet of the Parent and its
Subsidiaries for the fiscal year ended December 31, 2004 and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year of the Parent and its Subsidiaries, including the
notes thereto, (b) with respect to SALIC, the audited consolidated balance sheet
of SALIC and its Subsidiaries for the fiscal year ended December 31, 2004, and
the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year of SALIC and its Subsidiaries,
including the notes thereto, and (c) with respect to the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal
year ended December 31, 2004 and the related consolidated statements of income
or operations, shareholders' equity and cash flows for such fiscal year of the
Borrower and its Subsidiaries, including the notes thereto.
"Availability Period" means the period from and including the Effective
Date to the earliest of (a) the Commitment Termination Date, (b) the date of
termination of the Aggregate Commitments pursuant to Section 2.02, and (c) the
date of termination of the commitment of each Lender and of the obligation of
the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
3
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Borrower" has the meaning specified in the preamble.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office with respect to
Obligations denominated in Dollars is located or the State of New York.
"Cash Collateralize" has the meaning specified in Section 2.01(g).
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except
that a person or group shall be deemed to have "beneficial ownership" of
all securities that such person or group has the right to acquire (such
right, an "option right"), whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of 51% or more of
the equity securities of the Parent entitled to vote for members of the
board of directors or equivalent governing body of the Parent on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right);
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Parent cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii)
whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that
board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii)
4
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case
of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or
more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of
directors);
(c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Parent, or control over
the equity securities of the Parent entitled to vote for members of the
board of directors or equivalent governing body of the Parent on a
fully-diluted basis (and taking into account all such securities that such
Person or group has the right to acquire pursuant to any option right)
representing 51% or more of the combined voting power of such securities;
or
(d) (i) the Parent fails to own, directly or indirectly, free and
clear of all Liens, 100% of the Equity Interests of the Borrower, or (ii)
SALIC fails to own directly or indirectly, free and clear of all Liens,
100% of the Equity Interests of the Borrower.
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to purchase
participations in L/C Obligations, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.
"Commitment Termination Date" means July 14, 2008.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit A.
"Consolidated Net Income" means, for any period, (a) for the Parent and its
Subsidiaries on a consolidated basis, the net income of the Parent and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period, and (b) for SALIC and its Subsidiaries on a consolidated basis,
the net income of SALIC and its Subsidiaries (excluding extraordinary gains but
including extraordinary losses) for that period, in each case calculated in
accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise
5
voting power, by contract or otherwise. "Controlling" and "Controlled" have
meanings correlative thereto.
"Corporate Securities" means commercial paper, Asset Backed Securities and
other obligations of a corporation for borrowed money evidenced by bonds,
debentures, notes, loan agreements or other similar instruments.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) 2%
per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal
to the Applicable Rate plus 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
participations in L/C Obligations required to be funded by it hereunder within
one Business Day of the date required to be funded by it hereunder, (b) has
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Effective Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 11.01.
"Eligible Assignee" means (a) a Lender and (b) any other Person (other than
a natural person) (i) which is approved by (x) the Administrative Agent and the
L/C Issuer, and (y) unless an Event of Default has occurred and is continuing,
the Borrower (each such approval not to be unreasonably withheld or delayed) and
(ii) is able to make the representation required under Section 11.19; provided
that notwithstanding the foregoing, "Eligible Assignee" shall not include the
Parent or any of the Parent's Affiliates or Subsidiaries.
"Eligible Investments" mean Government Debt, Corporate Securities and
Asset-Backed Securities which are (a) rated by S&P or ▇▇▇▇▇'▇, (b) owned by
SALIC and (c) not subject to any Lien.
6
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of SALIC, the Borrower or any of their respective
Subsidiaries directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with SALIC within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by SALIC or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by SALIC 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 Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon SALIC or any ERISA Affiliate.
7
"EU GAAP" means the accounting principles set forth in the European
Community Regulations of 1996.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of any Loan Party hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Loan Party is located and (c) except as
provided in the following sentence, in the case of a Foreign Lender (other than
an assignee pursuant to a request by SALIC under Section 11.13), any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lender's failure or inability (other than as a
result of a Change in Law) to comply with Section 3.01(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 3.01(a). Notwithstanding anything to the contrary contained in this
definition, "Excluded Taxes" shall not include any withholding tax imposed at
any time on payments made by or on behalf of a Loan Party to any Lender
hereunder or under any other Loan Document, provided that such Lender shall have
complied with the last paragraph of Section 3.01(e).
"Fair Market Value" shall mean (a) with respect to any publicly-traded
security (other than those set forth in clause (b)), the closing price for such
security on the largest exchange on which such security is traded (or if not
traded on an exchange, then the average of the closing bid and ask prices quoted
over-the-counter) on the date of the determination (as such prices are
recognized in The Wall Street Journal or if not so reported, in any nationally
recognized financial journal or newspaper), (b) with respect to Government Debt,
the amount thereof, and (c) with respect to any other Eligible Investment (other
than those set forth in clauses (a) and (b)), the price for the such Eligible
Investment on the date of calculation obtained from a generally recognized
source approved by the Administrative Agent or the most recent bid quotation
from such approved source (or, if no generally recognized source exists as to
any particular Eligible Investment, any other source specified by SALIC to which
the Administrative Agent does not reasonably object).
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole
8
multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated August 18, 2005, among
SALIC, the Borrower, the Administrative Agent and the Arranger.
"Foreign Benefit Plan" means any employee benefit plan, pension plan or
welfare plan not subject to ERISA which is maintained or contributed to for the
benefit of the employees of a Loan Party or its Subsidiaries which, under
applicable law, (a) is required to be funded through a trust or similar funding
vehicle or (b) creates or could result in a Lien on any property of such Loan
Party or any of its Subsidiaries.
"Foreign Lender" means, with respect to any Loan Party, any Lender that is
organized under the laws of a jurisdiction other than that in which such Loan
Party is resident for tax purposes. For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means US GAAP or EU GAAP, as the context requires.
"Government Debt" means negotiable Indebtedness issued or guaranteed by the
United States Government or any agency thereof.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Guarantee" means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
9
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided, however,
that obligations of the Parent or any of its Subsidiaries under Primary
Policies, Reinsurance Agreements, Retrocession Agreements or Other Insurance
Products which are entered into in the ordinary course of business (including
security posted to secure obligations thereunder) shall not be deemed to be
Guarantees of such Person for the purposes of this Agreement. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in
such Person or any other Person, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and
10
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date. Indebtedness shall not include
the obligations of the Parent or any of its Insurance Subsidiaries under Primary
Policies, Reinsurance Agreements, Retrocession Agreements or Other Insurance
Products which are entered into in the ordinary course of business (including
security posted to secure obligations thereunder).
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 11.04(b).
"ING Asset Purchase Agreement" means the Asset Purchase Agreement dated as
of October 17, 2004 by and among SLD, SLDI, the Parent, Scottish US and Scottish
Bermuda, with such amendments thereto as have been approved by the Required
Lenders.
"ING Reinsurance Agreements" means the SLD Coinsurance Agreement, the SLD
Coinsurance/Modified Coinsurance Agreement, SLDI Coinsurance Agreement, the SLDI
Funds Withheld Coinsurance Agreement, the SLDI Coinsurance/Modified Coinsurance
Agreement, (as such terms are defined in the ING Asset Purchase Agreement) each
dated as of December 31, 2004.
"Insurance Subsidiaries" means SALIC and any Subsidiary of SALIC which is
licensed by any Governmental Authority to engage in the insurance or reinsurance
business.
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"Investment Policies" means the Investment Policies of SALIC as in effect
on the Effective Date with such revisions thereto as are approved by the Board
of Directors of the Parent from time to time.
"IRS" means the United States Internal Revenue Service.
11
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).
"Issuer Documents" means with respect to any Letter of Credit, the Letter
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Borrower or in favor of an L/C Issuer and
relating to any such Letter of Credit.
"Keep Well Agreements" means (a) the Net Worth Maintenance Agreement
between the Parent, SALIC and the Borrower dated as of January 1, 2002, (b) the
Net Worth Maintenance Agreement restated as of February 1, 2002 among SALIC and
Scottish US, (c) the Guarantee dated as of January 1, 2002 among the Parent,
SALIC and Scottish Re Limited, (d) the Scottish Life Keep Well Agreement, (e)
the Scottish Bermuda Keep Well Agreement and (f) similar net worth maintenance
agreements entered into by the Parent or any of its subsidiaries in favor of a
wholly-owned Insurance Subsidiary which are required by the Governmental
Authority regulating such Insurance Subsidiary provided such agreements are no
more onerous than the Keep Well Agreement described in clause (b) above.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Applicable
Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters of
Credit hereunder or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto.
12
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify SALIC and the
Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Fee" has the meaning specified in Section 2.01(i).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan Documents" means this Agreement, each Issuer Document and the Fee
Letter.
"Loan Party" and "Loan Parties" are defined in the preamble.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or prospects of (i)
the Borrower or (ii) SALIC and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Material Subsidiaries" means the Borrower, Scottish US, Scottish Life,
Scottish Bermuda, each other Subsidiary of SALIC whose consolidated assets or
revenues exceed 5% of the consolidated assets of SALIC and its Subsidiaries for
the most recent fiscal quarter for which financial statements have been
delivered pursuant to Section 6.01(a) or (b).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which SALIC or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Borrower arising under any Loan Document or
otherwise with respect to any Letter of Credit, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against the Borrower or any Affiliate
thereof of
13
any proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed claims
in such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Insurance Products" means guaranteed investment contracts and
secured and unsecured funding agreements which are not Alternative Reserve
Agreements.
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means with respect to any L/C Obligations on any date,
the amount of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of Unreimbursed Amounts.
"Parent" means Scottish Re Group Limited, a Cayman Islands exempted company
(f/k/a Scottish Annuity & Life Holdings, Ltd.).
"Parent Consolidated Indebtedness" means, as of any date of determination,
for the Parent and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct obligations
arising under letters of credit (including standby and commercial) which have
been drawn but not reimbursed by the Person for whose account such Letter of
Credit was issued, bankers' acceptances, bank guaranties, surety bonds and
similar instruments, (d) all obligations in respect of the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business), (e) Attributable Indebtedness in respect of capital leases
and Synthetic Lease Obligations and Swap Termination Value, (f) without
duplication, all Guarantees with respect to outstanding Indebtedness of the
types specified in clauses (a) through (e) above of Persons other than its
Subsidiaries, and (g) all Indebtedness of the types referred to in clauses (a)
through (f) above of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which the
Parent or one of its Subsidiaries is a general partner or joint venturer, unless
such Indebtedness is expressly made non-recourse to
14
the Parent or such Subsidiary; provided, however, the obligations of the Parent
or any of its Subsidiaries under the Keep Well Agreements shall be excluded for
purposes of calculating Parent Consolidated Indebtedness.
"Parent Debt Rating" has the meaning specified in the definition of
"Applicable Rate."
"Parent Debt to Capitalization Ratio" means the ratio of (a) Parent
Consolidated Indebtedness to (b) the sum of Parent Consolidated Indebtedness
plus Parent Net Worth.
"Parent Net Worth" means the Shareholders Equity of the Parent calculated
in accordance with all GAAP as adjusted pursuant to Section 7.11(b)(iii).
"Participant" has the meaning specified in Section 11.06(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by SALIC or any
ERISA Affiliate or to which SALIC or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.
"Perpetual Preferred Stock" means preferred stock issued from time to time
by the Parent which preferred stock is not redeemable at the option of the
holder thereof.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by SALIC or, with respect to any such plan
that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Platform" has the meaning specified in Section 6.02.
"Primary Policies" means any insurance policies issued by an Insurance
Subsidiary.
"Register" has the meaning specified in Section 11.06(c).
Reinsurance Agreements means any agreement, contract, treaty, certificate
or other arrangement whereby the Parent or any of its Insurance Subsidiaries
agrees to assume from or reinsure an insurer or reinsurer for all or part of the
liability of such insurer or reinsurer under a policy or policies of insurance
issued by such insurer or reinsurer.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
15
"Retrocession Agreements" means any agreement, treaty, certificate or other
arrangement whereby any Insurance Subsidiary cedes to another insurer all or
part of such Insurance Subsidiary's liability under a policy or policies of
insurance reinsured by such Insurance Subsidiary.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for L/C Credit Extension" means a Letter of Credit Application.
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
and the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, Lenders holding in the aggregate more than
50% of the Total Outstandings (with the aggregate amount of each Lender's risk
participation and funded participation in L/C Obligations being deemed "held" by
such Lender for purposes of this definition); provided that the Commitment of,
and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.
"Responsible Officer" means (a) with respect to SALIC, the chief executive
officer, president, chief financial officer, executive vice president or
treasurer of SALIC and (b) with respect to the Borrower, any director, manager
or authorized officer (as appointed by the board of directors of the Borrower).
Any document delivered hereunder that is signed by a Responsible Officer of the
Borrower shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of the Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
the Borrower.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of a Person, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such capital stock or other Equity Interest, or on account of any return
of capital to such Person's stockholders, partners or members (or the equivalent
Person thereof).
"SALIC" is defined in the preamble.
"SALIC Net Worth" means the Shareholders Equity of SALIC calculated in
accordance with GAAP.
"SAP" means the statutory accounting practices prescribed or permitted by
the Department of Insurance or other similar Governmental Authority in such
Insurance Subsidiary's domicile for the preparation of annual statements and
other financial reports by insurance companies of the same type as such
Insurance Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
16
"Scottish Bermuda" means Scottish Re (Bermuda) Limited, a company formed
under the laws of Bermuda.
"Scottish Bermuda Keep Well Agreement" means the Net Worth Maintenance
Agreement between SALIC and Scottish Bermuda dated as of December 31, 2004.
"Scottish Life" means Scottish Re Life Corporation, a Missouri corporation.
"Scottish Life Keep Well Agreement" means the Net Worth Maintenance
Agreement between SALIC and Scottish Life dated as of December 31, 2004.
"Scottish Re Credit Agreement" means the Amended and Restated Credit
Agreement dated as of July 14, 2005 among the Borrower, SALIC, certain other
borrowers, various financial institutions and Bank of America, as administrative
agent.
"Scottish US" means Scottish Re (U.S.), Inc., a Delaware corporation.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Shareholders' Equity" means, as to any Person as of any date of
determination, the consolidated shareholders' equity of such Person and its
Subsidiaries as of that date determined in accordance with GAAP.
"SLD" means Security Life of Denver Insurance Company, a Colorado insurance
company.
"SLDI" means Security Life of Denver International Limited, a Bermuda
insurance company.
"Statutory Statements" means, as to any Insurance Subsidiary, the annual or
quarterly financial statements of such Person as required to be filed with the
Department of Insurance (or similar Governmental Authority) of such Person's
domicile, together with all exhibits or schedules filed therewith prepared in
conformity with SAP.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
17
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Threshold Amount" means $20,000,000.
"Total Outstandings" means the aggregate Outstanding Amount of all L/C
Obligations.
"Unencumbered Asset Value" means, with respect to any type of Eligible
Investments, the product of (i) the percentage on Schedule 1.02 set forth
opposite such type of Eligible Investment and (ii) the Fair Market Value of such
Eligible Investment at such time of determination; provided, that to the extent
any Eligible Investments from the same issuer or any other issuer and its
Affiliates (other than the Government Debt) would constitute more than ten
percent (10% ) of the aggregate Unencumbered Asset Value of the Eligible
Investments, that amount in excess of ten percent (10%) shall be valued at zero.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
18
"Unreimbursed Amount" has the meaning specified in Section 2.01(c)(i).
"US GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied without giving effect to FAS 115
or DIG-B36 to include unrealized gains and losses.
1.02 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein," "hereof" and
"hereunder," and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(c) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
1.03 Accounting Terms.
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(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. The Audited Financial Statements
and the financial statements delivered by the Parent and SALIC pursuant to
Sections 6.01(a) and (b) shall be prepared in accordance with US GAAP. The
Audited Financial Statements and the annual financial statements delivered by
the Borrower pursuant to Section 6.01(a) shall be prepared in accordance with EU
GAAP. The quarterly financial statements delivered by the Borrower pursuant to
Section 6.01(b) shall be prepared in accordance with US GAAP.
(b) Changes in GAAP. 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 SALIC or the Required Lenders shall so request, the
Administrative Agent, the Lenders and SALIC 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, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) SALIC
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.
1.04 Rounding. Any financial ratios required to be maintained pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).
1.05 Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.06 Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.
ARTICLE II.
THE COMMITMENTS AND L/C CREDIT EXTENSIONS
2.01 Letters of Credit.
(a) The Letter of Credit Commitment.
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(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the Lenders set forth in
this Section 2.01, (1) from time to time on any Business Day during the
Availability Period, to issue Letters of Credit in Dollars for the account
of the Borrower, and to amend Letters of Credit previously issued by it, in
accordance with subsection (b) below, and (2) to honor drawings under the
Letters of Credit; and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower and any drawings
thereunder; provided that after giving effect to any L/C Credit Extension
with respect to any Letter of Credit, (x) the Total Outstandings shall not
exceed the Aggregate Commitments and (y) a Lender's Applicable Percentage
of the Outstanding Amount of all L/C Obligations shall not exceed such
Lender's Commitment. Each request by the Borrower for the issuance or
amendment of a Letter of Credit shall be deemed to be a representation by
the Borrower that the L/C Credit Extension so requested complies with the
conditions set forth in the proviso to the preceding sentence. Within the
foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) the expiry date of such requested Letter of Credit would
occur more than twelve months after the date of issuance, unless the
Lenders have approved such expiry date; or
(iii) The L/C Issuer shall not be under any obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Effective Date, or shall impose upon
the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Effective Date and which the L/C Issuer in good
▇▇▇▇▇ ▇▇▇▇▇ material to it;
(B) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and
the L/C Issuer, such Letter of Credit is in an initial stated amount
less than $50,000;
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(D) such Letter of Credit is to be denominated in a currency
other than Dollars;
(E) such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; or
(F) a default of any Lender's obligations to fund under Section
2.01(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory
arrangements with SALIC or such Lender to eliminate the L/C Issuer's
risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C
Issuer would not be permitted at such time to issue such Letter of Credit
in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B)
the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith,
and the L/C Issuer shall have all of the benefits and immunities (A)
provided to the Administrative Agent in Article IX with respect to any acts
taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in Article IX included the L/C Issuer with
respect to such acts or omissions, and (B) as additionally provided herein
with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be received by the L/C
Issuer and the Administrative Agent not later than 11:00 a.m. at least two
Business Days prior to the proposed issuance date or date of amendment, as
the case may be; or in each case such later date and time as the
Administrative Agent and the L/C Issuer may agree in a particular instance
in their sole discretion. In the case of a request for an initial issuance
of a Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the L/C Issuer: (A) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (B)
the amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may require. In
the case of a request for an amendment of any outstanding Letter of Credit,
such Letter of Credit
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Application shall specify in form and detail satisfactory to the L/C Issuer
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Unless the L/C Issuer
has received written notice from any Lender, the Administrative Agent or
the Borrower, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such Letter
of Credit in an amount equal to the product of such Lender's Applicable
Percentage times the amount of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit (or any
amendment thereto) to an advising bank with respect to such Letter of
Credit or to the beneficiary of such Letter of Credit, the L/C Issuer will
also deliver to the Borrower and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment. The Administrative
Agent shall provide notice to the Lenders within a reasonable time after
any change to the L/C Obligations.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Borrower and the Administrative Agent thereof. Not later than
11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an "Honor Date"), the Borrower shall reimburse the
L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the
"Unreimbursed Amount"), and the amount of such Lender's Applicable
Percentage thereof. Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.01(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
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(ii) Each Lender shall upon any notice pursuant to Section 2.01(c)(i)
make funds available to the Administrative Agent for the account of the L/C
Issuer at the Administrative Agent's Office in an amount equal to its
Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m.
on the Business Day specified in such notice by the Administrative Agent,
whereupon, the Borrower shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is
not so refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to this Section 2.01(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.01. The Administrative Agent
shall remit the funds so received to the L/C Issuer.
(iii) Until each Lender funds its L/C Advance pursuant to this Section
2.01(c) to reimburse the L/C Issuer for any amount drawn under any Letter
of Credit, interest in respect of such Lender's Applicable Percentage of
such amount shall be solely for the account of the L/C Issuer.
(iv) Each Lender's obligation to make L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by
this Section 2.01(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the
L/C Issuer, SALIC, the Borrower or, any Subsidiary thereof or any other
Person for any reason whatsoever; (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing. No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse the
L/C Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(v) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.01(c) by the
time specified in Section 2.01(c)(ii), the L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the L/C Issuer submitted
to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (v) shall be conclusive absent manifest
error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.01(c), if the
Administrative Agent receives for the
24
account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrower
or otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Applicable Percentage thereof (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Lender's L/C Advance was outstanding) and in the same funds as those
received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.01(c)(i) is required to be
returned under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Applicable Percentage thereof on demand of
the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit issued for the
Borrower's account and to repay each related L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower or SALIC or any of its Subsidiaries may have
at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee
may be acting), the L/C Issuer or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any unrelated
transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
25
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower or SALIC or any of its Subsidiaries.
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agrees that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of Credit
issued for its account; provided, however, that this assumption is not intended
to, and shall not, preclude the Borrower's pursuing such rights and remedies as
it may have against the beneficiary or transferee at law or under any other
agreement. None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the
L/C Issuer shall be liable or responsible for any of the matters described in
clauses (i) through (v) of Section 2.01(e); provided, however, that anything in
such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer's willful misconduct or gross negligence or the L/C
Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. (i) If for any reason the Total Outstandings at any
time exceed the Aggregate Commitments then in effect, the Borrower shall
immediately Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; and (ii) upon the request of the Administrative Agent, if the
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, the Borrower shall,
immediately Cash Collateralize the then Outstanding Amount of all the Borrower's
L/C
26
Obligations. Sections 8.02(c) sets forth certain additional requirements to
deliver Cash Collateral hereunder. For purposes of this Section 2.01 and Section
8.02(c), "Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations of the Borrower, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein of the Borrower and all proceeds of the foregoing. Cash
Collateral shall be maintained in blocked, non-interest bearing deposit accounts
at Bank of America.
(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP
shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage, a Letter of Credit fee (the "Letter of Credit Fee") for each Letter
of Credit issued for the account of the Borrower equal to the Applicable Rate
times of the daily amount available to be drawn under such Letter of Credit. For
purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. Letter of Credit Fees shall be (i) computed on a quarterly
basis in arrears and (ii) due and payable on the first Business Day after the
end of each March, June, September and December, commencing on the first
Business Day after the end of September, 2005 and thereafter commencing with the
first such date to occur after the issuance of such Letter of Credit and on the
date the last Letter of Credit expires. If there is any change in the Applicable
Rate during any quarter, the daily amount available to be drawn under each
Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account, a
fronting fee with respect to each Letter of Credit issued for the account of the
Borrower, at the rate per annum agreed to between the Borrower and the L/C
Issuer, computed on the daily amount available to be drawn under such Letter of
Credit on a quarterly basis in arrears, and due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit and on the date the last Letter of Credit expires. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.06. In addition, the Borrower shall pay directly to the L/C Issuer for its own
account, the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit issued for the account of the Borrower as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
27
(k) Conflict with Issuer Documents. In the event of any conflict between
the terms hereof and the terms of any Issuer Document, the terms hereof shall
control.
2.02 Termination or Reduction of Commitments. SALIC may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time
permanently reduce the Aggregate Commitments; provided that (i) any such notice
shall be received by the Administrative Agent not later than 11:00 a.m. five
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof and (iii) SALIC shall not terminate or
reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments. The Administrative Agent will promptly notify the Lenders
of any such notice of termination or reduction of the Aggregate Commitments. Any
reduction of the Aggregate Commitments shall be applied to the Commitment of
each Lender pro rata according to its Applicable Percentage. All fees accrued
until the effective date of any termination of the Aggregate Commitments shall
be paid on the effective date of such termination.
2.03 Fees. In addition to certain fees described in subsections (i) and (j)
of Section 2.01:
(a) Facility Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a
facility fee equal to the Applicable Rate times the actual daily amount of the
Aggregate Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all L/C Obligations), regardless of usage. The facility
fee shall accrue at all times during the Availability Period (and thereafter so
long as any L/C Obligations remain outstanding), including at any time during
which one or more of the conditions in Article IV is not met, and shall be due
and payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing on the last Business Day of September, 2005,
and on the Commitment Termination Date (and, if applicable, thereafter on
demand). The facility fee shall be calculated quarterly in arrears, and if there
is any change in the Applicable Rate during any quarter, the actual daily amount
shall be computed and multiplied by the Applicable Rate separately for each
period during such quarter that such Applicable Rate was in effect.
(b) Utilization Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Applicable Percentage, a
utilization fee equal to the Applicable Rate times the Total Outstandings on
each day that the Total Outstandings exceed 50% of the actual daily amount of
the Aggregate Commitments then in effect (or, if terminated, in effect
immediately prior to such termination). The utilization fee shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing on the last Business Day of September, 2005,
and on the Commitment Termination Date (and, if applicable, thereafter on
demand). The utilization fee shall be calculated quarterly in arrears and if
there is any change in the Applicable Rate during any quarter, the daily amount
shall be computed and multiplied by the Applicable Rate for each period during
which such Applicable Rate was in effect. The utilization fee shall accrue at
all times, including at any time during which one or more of the conditions in
Article IV is not met.
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(c) Other Fees.
(i) The Borrower shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the
times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such upfront fees as shall
have been separately agreed upon in writing in the amounts and at the times
so specified. Such upfront fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.
2.04 Computation of Interest and Fees. All computations of interest for L/C
Borrowings when the Base Rate is determined by Bank of America's "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each L/C Borrowing for the day on which
the L/C Borrowing is made, and shall not accrue on a L/C Borrowing, or any
portion thereof, for the day on which the L/C Borrowing or such portion is paid,
provided that any L/C Borrowing that is repaid on the same day on which it is
made shall, subject to Section 2.06(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.
2.05 Evidence of Debt.
(a) The L/C Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the L/C Credit Extensions made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.
2.06 Payments Generally; Administrative Agent's Clawback.
(a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise
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expressly provided herein, all payments by the Borrower hereunder shall be made
to the Administrative Agent, for the account of the respective Lenders to which
such payment is owed, at the applicable Administrative Agent's Office in Dollars
in immediately available funds not later than 2:00 p.m. on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. Except as otherwise expressly provided herein, all payments received by
the Administrative Agent after 2:00 p.m. shall in each case be deemed received
on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue. If any payment to be made by the Borrower shall come due on
a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.
(b) Payments by the Borrower; Presumptions by Administrative Agent. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the
amount due. In such event, if the Borrower has not in fact made such payment,
then each of the Lenders or the L/C Issuer, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the Federal Funds Rate.
(c) Obligations of Lenders Several. The obligations of the Lenders
hereunder to fund participations in Letters of Credit and to make payments
pursuant to Section 11.04(c) are several and not joint. The failure of any
Lender to fund any such participation or to make any payment under Section
11.04(c) on any date required hereunder shall not relieve any other Lender of
its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to purchase its participation or
to make its payment under Section 11.04(c).
(d) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any L/C Advance in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any L/C Advance in any particular place or manner.
2.07 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of the
participations in L/C Obligations held by it resulting in such Lender's
receiving payment of a proportion of the aggregate amount of such participations
and accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
subparticipations in L/C Obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably
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in accordance with the aggregate amount of L/C Obligations and other amounts
owing them, provided that:
(i) if any such or subparticipations are purchased and all or any portion of
the payment giving rise thereto is recovered, such subparticipations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to (x)
any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender
as consideration for the assignment of or sale of subparticipations in
L/C Obligations to any assignee or participant, other than to SALIC or
any Subsidiary thereof (as to which the provisions of this Section shall
apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
2.08 SALIC as Agent of the Borrower. The Borrower hereby irrevocably
appoints SALIC as its agent for all purposes relevant to this Agreement and each
of the other Loan Documents, including (i) the giving and receipt of notices,
and (ii) the execution and delivery of all documents, instruments and
certificates contemplated herein and all modifications hereto. Any
acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by the Borrower, shall be
valid and effective if given or taken only by SALIC, whether or not the Borrower
joins therein. Any notice, demand, consent, acknowledgement, direction,
certification or other communication delivered to SALIC in accordance with the
terms of this Agreement shall be deemed to have been delivered to the Borrower.
2.09 Increase in Commitments.
(a) Request for Increase. Provided there exists no Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), SALIC may at
any time request an increase in the Aggregate Commitments provided that any such
request for an increase shall be in a minimum amount of $10,000,000 or an even
multiple thereof; provided, further, that after giving effect to any such
increase, the Aggregate Commitments shall not exceed $50,000,000. At the time of
sending such notice, SALIC (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested
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increase. Any Lender not responding within such time period shall be deemed to
have declined to increase its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify SALIC and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent and
the L/C Issuer (which approvals shall not be unreasonably withheld), SALIC may
also invite additional Eligible Assignees to become Lenders pursuant to a
joinder agreement in form and substance satisfactory to the Administrative Agent
and its counsel.
(d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and SALIC
shall determine the effective date (the "Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify
SALIC and the Lenders of the final allocation of such increase and the Increase
Effective Date.
(e) Conditions to Effectiveness of Increase. As a condition precedent to
such increase, SALIC shall deliver to the Administrative Agent a certificate of
the Borrower dated as of the Increase Effective Date (in sufficient copies for
each Lender) signed by a Responsible Officer of the Borrower (i) certifying and
attaching the resolutions adopted by the Borrower approving or consenting to
such increase, and (ii) in the case of SALIC, certifying that, before and after
giving effect to such increase, (A) the representations and warranties contained
in Article V and the other Loan Documents are true and correct on and as of the
Extension Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.09, the representations and warranties contained in subsections (a)
and (b) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and
(B) no Default exists.
(f) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.07 or 11.01 to the contrary.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of each Loan Party hereunder or under any other Loan Document shall
be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if such Loan Party shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or L/C Issuer, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Loan
Party shall make such deductions and (iii such
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Loan Party shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Loan Parties. Without limiting the
provisions of subsection (a) above, each Loan Party shall timely pay any Other
Taxes attributable to such Loan Party's Obligations to the relevant Governmental
Authority in accordance with applicable law.
(c) Indemnification by the Borrower. Each Loan Party shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, with respect to such
Loan Party's Obligations and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to such Loan Party by a Lender or the L/C Issuer (with a
copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent
manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Loan Party to a Governmental Authority
with respect to such Loan Party's Obligations, such Loan Party shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
a Loan Party is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to SALIC (with a copy to the Administrative Agent),
at the time or times prescribed by applicable law or reasonably requested by
SALIC or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by SALIC or the Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by
SALIC or the Administrative Agent as will enable SALIC or the Administrative
Agent to determine whether or not such Lender is subject to backup withholding
or information reporting requirements.
Without limiting the generality of the foregoing, in the event that a Loan
Party is resident for tax purposes in the United States, any Foreign Lender
shall deliver to SALIC and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of SALIC or the Administrative Agent, but only if
such Foreign Lender is legally entitled to do so), whichever of the following is
applicable:
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(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the applicable Loan Party within the meaning of section
881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
described in section 881(c)(3)(C) of the Code and (y) duly completed copies
of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit SALIC to determine the withholding
or deduction required to be made.
Without limiting the obligations of the Lenders set forth above regarding
delivery of certain forms and documents to establish each Lender's status for
U.S. withholding tax purposes, each Lender agrees promptly to deliver to the
Administrative Agent or SALIC, as the Administrative Agent or SALIC shall
reasonably request, on or prior to the Effective Date, and in a timely fashion
thereafter, such other documents and forms required by any relevant taxing
authorities under the Laws of any other jurisdiction, duly executed and
completed by such Lender, as are required under such Laws to confirm such
Lender's entitlement to any available exemption from, or reduction of,
applicable withholding taxes in respect of all payments to be made to such
Lender outside of the U.S. by a Loan Party pursuant to this Agreement or
otherwise to establish such Lender's status for withholding tax purposes in such
other jurisdiction. Each Lender shall promptly (i) notify the Administrative
Agent of any change in circumstances which would modify or render invalid any
such claimed exemption or reduction, and (ii) 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) to avoid any requirement of applicable Laws of any such jurisdiction
that such Loan Party make any deduction or withholding for taxes from amounts
payable to such Lender. Additionally each Loan Party shall promptly deliver to
the Administrative Agent or any Lender, as the Administrative Agent or such
Lender shall reasonably request, on or prior to the Effective Date, and in a
timely fashion thereafter, such documents and forms required by any relevant
taxing authorities under the Laws of any jurisdiction, duly executed and
completed by such Loan Party, as are required to be furnished by such Lender or
the Administrative Agent under such Laws in connection with any payment by the
Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in
connection with the Loan Documents, with respect to such jurisdiction.
(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender
or the L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which a Loan Party
34
has paid additional amounts pursuant to this Section, it shall pay to such Loan
Party an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by such Loan Party under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent, such Lender or the L/C
Issuer, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that such Loan Party, upon the request of the Administrative Agent, such Lender
or the L/C Issuer, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the L/C Issuer in the
event the Administrative Agent, such Lender or the L/C Issuer is required to
repay such refund to such Governmental Authority. This subsection shall not be
construed to require the Administrative Agent, any Lender or the L/C Issuer to
make available its tax returns (or any other information relating to its taxes
that it deems confidential) to any Loan Party or any other Person.
3.02 Illegality. If the L/C issuer or any Lender determines that any Law
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to issue or
participate in any Letter of Credit, then, on notice thereof by the L/C Issuer
or such Lender to SALIC through the Administrative Agent, any obligation of the
L/C Issuer or such Lender to issue or participate in any Letter of Credit shall
be suspended until the L/C Issuer or such Lender notifies the Administrative
Agent and SALIC that the circumstances giving rise to such determination no
longer exist.
3.03 Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in
by, any Lender or the L/C Issuer;
(ii) subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit or any
participation in a Letter of Credit, or change the basis of taxation of
payments to such Lender or the L/C Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition
of, or any change in the rate of, any Excluded Tax payable by such Lender
or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or any
Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender or the L/C Issuer of participating in, issuing or maintaining any Letter
of Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or the L/C Issuer hereunder (whether of principal, interest
35
or any other amount) then, upon request of such Lender or the L/C Issuer, SALIC
will pay (or cause the Borrower to pay) to such Lender or the L/C Issuer, as the
case may be, such additional amount or amounts as will compensate such Lender or
the L/C Issuer, as the case may be, for such additional costs incurred or
reduction suffered.
(b) Capital Requirements. If any Lender or the L/C Issuer determines that
any Change in Law affecting such Lender or the L/C Issuer or any Lending Office
of such Lender or such Lender's or the L/C Issuer's holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the L/C Issuer's capital or on the capital of such
Lender's or the L/C Issuer's holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a
level below that which such Lender or the L/C Issuer or such Lender's or the L/C
Issuer's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the L/C Issuer's policies and the policies
of such Lender's or the L/C Issuer's holding company with respect to capital
adequacy), then from time to time SALIC will pay (or cause the Borrower to pay)
to such Lender or the L/C Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or the L/C Issuer or such Lender's or the
L/C Issuer's holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or the L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to SALIC shall be conclusive
absent manifest error. SALIC shall pay (or cause the Borrower to pay) such
Lender or the L/C Issuer, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the
L/C Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender's or the L/C Issuer's right
to demand such compensation, provided that no Borrower shall be required to
compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender or the L/C Issuer, as the case
may be, notifies SALIC of the Change in Law giving rise to such increased costs
or reductions and of such Lender's or the L/C Issuer's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
3.04 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.02, or a Loan Party is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its L/C Obligations hereunder or
to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce
36
amounts payable pursuant to Section 3.01 or 3.03, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. SALIC hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If a Loan Party is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, SALIC may replace such Lender in accordance
with Section 11.13.
3.05 Survival. Each of the Loan Parties' obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO L/C CREDIT EXTENSIONS
4.01 Conditions of Effective Date. The occurrence of the Effective Date is
subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Effective Date (or, in the case of
certificates of governmental officials, a recent date before the Effective Date)
and each in form and substance satisfactory to the Administrative Agent and each
of the Lenders:
(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and each Loan Party
Borrower;
(ii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Person is a party;
(iii) such documents and certifications as the Administrative Agent
may reasonably require to evidence that each Loan Party is duly
incorporated or organized or formed, and that each Loan Party is validly
existing, in good standing (if such concept is applicable) and qualified to
engage in business in each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(iv) a favorable opinion of (i) LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, U.S.
counsel to the Loan Parties (ii) ▇▇▇▇▇▇ and Calder, Cayman Islands counsel
to SALIC, and (iii) ▇▇▇▇▇▇▇ ▇▇▇, Irish counsel to the Borrower, in each
case, addressed to the Administrative Agent and each Lender, as to the
matters in Exhibit C and such other
37
matters concerning the Loan Parties and the Loan Documents as the Required
Lenders may reasonably request;
(v) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Person and
the validity against such Person of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
(vi) a certificate signed by a Responsible Officer of SALIC certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied (B) that there has been no event or circumstance since the date
of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material
Adverse Effect; and (C) the current Parent Debt Rating;
(vii) a duly completed Compliance Certificate as of March 31, 2005,
signed by a Responsible Officer of SALIC;
(viii) a letter from the Process Agent agreeing to the terms of
Section 11.14(d); and
(ix) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer or the Required
Lenders reasonably may require.
(b) Any fees required to be paid on or before the Effective Date shall have
been paid.
(c) Unless waived by the Administrative Agent, the Loan Parties shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
to the extent invoiced prior to or on the Effective Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Loan
Parties and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Effective Date specifying its
objection thereto.
4.02 Conditions to All L/C Credit Extensions. The obligation of each Lender
to honor any Request for L/C Credit Extension is subject to the following
conditions precedent:
(a) The representations and warranties of (i) the Loan Parties contained in
Article V and (ii) each Loan Party contained in each other Loan Document or in
any document furnished at any time under or in connection herewith or therewith,
shall be true and correct in all material
38
respects on and as of the date of such L/C Credit Extension, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed L/C Credit
Extension or the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for L/C Credit Extension in accordance with the requirements
hereof.
Each Request for L/C Credit Extension submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable L/C Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants (provided that the Borrower
represents and warrants solely with respect to itself and its respective
Subsidiaries) to the Administrative Agent and the Lenders that.
5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan
Party and each Subsidiary thereof (a) is duly incorporated or organized or
formed, validly existing and in good standing (to the extent such concept is
applicable) under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing (to the extent such concept is
applicable) under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law. Each Loan Party and each Subsidiary thereof is in
39
compliance with all Contractual Obligations referred to in clause (b)(i), except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document except as
set forth in Section 5.17.
5.04 Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the applicable Person and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of the applicable Person and its Subsidiaries
as of the date thereof, including liabilities for taxes, material commitments
and Indebtedness.
(b) The Audited Annual Statements (i) were prepared in accordance with SAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the
Scottish US and its Subsidiaries as of the date thereof and the results of
operation for the period covered thereby in accordance with SAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (iii) show all material indebtedness and other liabilities,
direct or contingent, of Scottish US and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
(c) The unaudited Financial Statements of each of the Parent and its
Subsidiaries, SALIC and its Subsidiaries and the Borrower and its Subsidiaries,
dated March 31, 2005 (i) were prepared in accordance with US GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of such Person
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.
(d) Since the date of the Audited Financial Statements, and the Audited
Annual Statements there has been no event or circumstance, either individually
or in the aggregate, that has had or could reasonably be expected to have a
Material Adverse Effect.
40
5.06 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of any Loan Party after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Loan Parties or any of
their respective Subsidiaries or against any of their properties or revenues
that (a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
5.07 No Default. None of the Loan Parties nor any their respective
Subsidiaries is in default under or with respect to any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.
5.08 Ownership of Property; Liens. Each of the Loan Parties and each of its
respective Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of each Loan Party and each of its respective
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
5.09 Environmental Compliance. Each of the Loan Parties and its respective
Subsidiaries conduct in the ordinary course of business a review of the effect
of existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof no Borrower could
reasonably conclude that such Environmental Laws and claims could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 Insurance. The properties of each Loan Party and its respective
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Loan Parties, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the applicable Loan Party or the applicable Subsidiary operates.
5.11 Taxes. Each of the Loan Parties and its respective Subsidiaries have
filed all Federal, state and other material tax returns and reports required to
be filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP. There is no proposed tax assessment against any Loan Party or any of its
respective Subsidiaries that would, if made, have a Material Adverse Effect.
None of the Loan Parties nor any of their respective Subsidiaries is party to
any tax sharing agreement.
5.12 ERISA and Foreign Benefit Plan Compliance.
41
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of SALIC, nothing has occurred which would prevent, or cause the loss
of, such qualification. SALIC and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of SALIC, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither SALIC nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither SALIC nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither SALIC nor any ERISA Affiliate
has engaged in a transaction that could be subject to Sections 4069 or 4212(c)
of ERISA.
(d) With respect to any Foreign Benefit Plan, (i) each Foreign Benefit Plan
is in compliance in all material respects with applicable Law except to the
extent set forth in subparagraph (ii), (ii) the aggregate of the accumulated
benefit obligations under all Foreign Benefit Plans does not exceed the current
fair market value of the assets held in the trust or similar funding vehicles
for such Foreign Benefit Plans in an amount in excess of the Threshold Amount,
and (iii) reasonable reserves have been established in accordance with prudent
business practice or where required by ordinary accounting practices in the
jurisdiction in which such Foreign Benefit Plan is maintained. There are no
material actions, suits or claims (other than routine claims for benefits)
pending, or the knowledge of SALIC, threatened against it or any of the Loan
Parties or any of their respective Subsidiaries with respect to any Foreign
Benefit Plan.
5.13 Subsidiaries. The subsidiaries of each Loan Party are specifically
disclosed in Schedule 5.13 as updated from time to time pursuant to Section
6.02(h) and correctly indicate which Subsidiaries are Insurance Subsidiaries.
All of the outstanding Equity Interests in each Loan Party and such Subsidiaries
have been validly issued, are fully paid and nonassessable and are owned by the
Person and in the amounts specified on Schedule 5.13 free and clear of all Liens
other than Liens permitted under Section 7.01.
42
5.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
(a) The Borrower is not engaged nor will it engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock. Following the
application of the proceeds of each drawing under each Letter of Credit, not
more than 25% of the value of the assets (either of the Borrower or the Borrower
and its Subsidiaries on a consolidated basis) subject to the provisions of
Section 7.01 or Section 7.05 or subject to any restriction contained in any
agreement or instrument between the Borrower and any Lender or any Affiliate of
any Lender relating to Indebtedness and within the scope of Section 8.01(e) will
be margin stock.
(b) None of the Loan Parties, any Person Controlling the Loan Parties or
any Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
5.15 Disclosure. The Loan Parties have disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which any of the Loan Parties or any of their respective
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Loan Document (in each case, as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the Loan Parties
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is
in compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 Representations as to Loan Parties. Each Loan Party represents and
warrants to the Administrative Agent and the Lenders that:
43
(a) Such Loan Party is subject to civil and commercial Laws with respect to
its obligations under this Agreement and the other Loan Documents to which it is
a party (collectively as to such Loan Party, the "Applicable Loan Party
Documents"), and the execution, delivery and performance by such Loan Party of
the Applicable Loan Party Documents constitute and will constitute private and
commercial acts and not public or governmental acts. Neither such Loan Party nor
any of its property has any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) under the laws of the
jurisdiction in which such Loan Party is organized and existing in respect of
its obligations under the Applicable Loan Party Documents.
(b) The Applicable Loan Party Documents are in proper legal form under the
Laws of the jurisdiction in which such Loan Party is organized and existing for
the enforcement thereof against such Loan Party under the Laws of such
jurisdiction, and to ensure the legality, validity, enforceability, priority or
admissibility in evidence of the Applicable Loan Party Documents. It is not
necessary to ensure the legality, validity, enforceability, priority or
admissibility in evidence of the Applicable Loan Party Documents that the
Applicable Loan Party Documents be filed, registered or recorded with, or
executed or notarized before, any court or other authority in the jurisdiction
in which such Loan Party is organized and existing or that any registration
charge or stamp or similar tax be paid on or in respect of the Applicable Loan
Party Documents or any other document, except for (i) any such filing,
registration, recording, execution or notarization as has been made or is not
required to be made until the Applicable Loan Party Document or any other
document is sought to be enforced, (ii) any charge or tax as has been timely
paid, and (iii) Cayman Islands stamp duty may be payable if an original
Applicable Loan Party Document is brought to or executed in the Cayman Islands.
(c) There is no tax, levy, impost, duty, fee, assessment or other
governmental charge, or any deduction or withholding, imposed by any
Governmental Authority in or of the jurisdiction in which such Loan Party is
organized and existing either (i) on or by virtue of the execution or delivery
of the Applicable Loan Party Documents or (ii) on any payment to be made by such
Loan Party pursuant to the Applicable Loan Party Documents, except (x) stamp tax
payable with respect to any note executed by the Borrower and (y) stamp tax
payable in the Cayman Islands if the relevant Applicable Loan Party Documents
are brought to or executed in the Cayman Islands. SALIC shall promptly pay any
stamp tax which may be owed. The Credit Agreement and any other Applicable Loan
Party Documents were executed by SALIC outside the Cayman Islands.
(d) The execution, delivery and performance of the Applicable Loan Party
Documents executed by such Loan Party are, under applicable foreign exchange
control regulations of the jurisdiction in which such Loan Party is incorporated
or organized and existing, not subject to any notification or authorization
except (i) such as have been made or obtained or (ii) such as cannot be made or
obtained until a later date (provided that any notification or authorization
described in clause (ii) shall be made or obtained as soon as is reasonably
practicable).
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ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding, the Loan Parties shall, and shall (except in the case of the
covenants set forth in Sections 6.01, 6.02, and 6.03) cause each of their
respective Subsidiaries to (provided that the Borrower covenants solely with
respect to itself and its respective Subsidiaries):
6.01 Financial Statements. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year, (i) in the case of the Parent, the consolidated and
consolidating balance sheet of the Parent and its Subsidiaries as of the end of
such fiscal year and the related consolidated and consolidating statements of
income and consolidated statements of cash flow for such period, and (ii) in the
case of SALIC and the Borrower, the consolidated balance sheet of such Person
and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income for such period, each setting forth in
comparative form the figures for the previous comparable fiscal period, all in
reasonable detail and prepared in accordance with GAAP, each of such
consolidated statement shall be audited and accompanied by a report and opinion
of an independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with the applicable GAAP and shall not be subject to any
"going concern" or like qualification or exception or any qualification or
exception as to the scope of such audit and such consolidating statements to be
certified by a Responsible Officer of SALIC or such Person to the effect that
such statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of such Person and its
Subsidiaries;
(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year, (i) in the case of
the Parent, an unaudited consolidated and consolidating balance sheet of the
Parent and its Subsidiaries as at the end of such fiscal quarter and the related
consolidated and consolidating statements of income or operations, shareholders'
equity and cash flows for such fiscal quarter and (ii) in the case of SALIC and
the Borrower, an unaudited consolidated balance sheet of such Person and its
Subsidiaries as at the end of such fiscal quarter and the related consolidated
statement of income or operations and shareholders' equity for such fiscal
quarter, such consolidated statements to be certified by a Responsible Officer
of SALIC or such Person as fairly presenting the financial condition, results of
operations, shareholders' equity and cash flows of SALIC or such Person and its
Subsidiaries in accordance with US GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes and such consolidating statements to be
certified by a Responsible Officer of such Person to the effect that such
statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of such Person and its
Subsidiaries; and
(c) promptly after the transmittal thereof to any Government Authority in
its jurisdiction of organization (and with respect to SALIC, in the Cayman
Islands and Bermuda),
45
but only if and to the extent required to be provided to any Government
Authority, any annual and quarterly Statutory Statements required to be
delivered to or under such Government Authority by a Loan Party or any Insurance
Subsidiary thereof prepared in conformity with the requirements thereof.
As to any information contained in materials furnished pursuant to Section
6.02(d), SALIC shall not be separately required to furnish such information
under clause (a) or (b) above, but the foregoing shall not be in derogation of
the obligation of SALIC to furnish the information and materials described in
clauses (a) and (b) above at the times specified therein.
6.02 Certificates; Other Information. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or, if
any such Default shall exist, stating the nature and status of such event.
(b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of SALIC.
(c) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of any Person required to provide Financial Statements pursuant to
Section 6.01(a) or (b) by independent accountants in connection with the
accounts or books of such Person or any Subsidiary, or any audit of any of them.
(d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Parent, and copies of all annual, regular, periodic and
special reports and registration statements which the Parent may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto.
(e) promptly, and in any event within five Business Days after receipt
thereof by the Parent or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
the Parent or any Subsidiary thereof.
(f) promptly, such additional information regarding the business, financial
or corporate affairs of the Parent, the Loan Parties or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may from time to time reasonably request.
(g) The following certificates and other information:
46
(i) Within five (5) Business Days of receipt, a copy of any financial
examination reports by a Governmental Authority with respect to a Loan
Party or any or its Insurance Subsidiaries relating to the insurance
business of the such Person (when, and if, prepared); provided, a Loan
Party shall only be required to deliver any interim report hereunder at
such time as such Loan Party has knowledge that a final report will not be
issued and delivered to the Administrative Agent within 90 days of any such
interim report;
(ii) Copies of all filings (other than ordinary course
requalifications, nonmaterial tax and insurance rate and other ministerial
regulatory filings) with Governmental Authorities by a Loan Party or any of
its Insurance Subsidiaries not later than five (5) Business Days after such
filings are made, including, without limitation, filings which seek
approval of Governmental Authorities with respect to transactions between
such Loan Party or such Insurance Subsidiary and its Affiliates;
(iii) Within five (5) Business Days of such notice, notice of proposed
or actual suspension, termination or revocation of any material license of
any Loan Party or any of its Insurance Subsidiaries by any Governmental
Authority or of receipt of notice from any Governmental Authority notifying
a Loan Party or any of its Insurance Subsidiaries of a hearing relating to
such a suspension, termination or revocation, including any request by a
Governmental Authority which commits the Parent or any of its Subsidiaries
to take, or refrain from taking, any action or which otherwise materially
and adversely affects the authority of such Loan Party or any such
Insurance Subsidiary to conduct its business;
(iv) Within five (5) Business Days of such notice, notice of any
pending or threatened investigation or regulatory proceeding (other than
routine periodic investigations or reviews) by any Governmental Authority
concerning the business, practices or operations of a Loan Party or any of
its Insurance Subsidiaries; and
(v) Promptly, notice of any actual or, to the best of the applicable
Loan Party's knowledge, proposed material changes in the applicable laws
governing the investment or dividend practices of such Loan Party or any of
its Insurance Subsidiaries.
(h) Promptly upon formation or acquisition of any Subsidiary after the
Effective Date with an initial capitalization of $1,000,000 or more or after the
capital of a previously unreported Subsidiary is increased above $1,000,000,
written notice of the name, purpose and capitalization of such Subsidiary and
whether such Subsidiary is a Insurance Subsidiary.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (if such date is a
Business Day and during normal business hours and if not, delivery will be
deemed to occur on the next succeeding Business Day) (i) on which SALIC posts
such documents, or provides a link thereto on SALIC's website on the Internet at
the website address listed on Schedule 11.02; or (ii) on which such documents
are posted on SALIC's behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have
47
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (x) SALIC shall deliver paper copies of
such documents to the Administrative Agent or any Lender that requests SALIC to
deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (y) SALIC shall
notify the Administrative Agent and each Lender (by telecopier or electronic
mail) of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such
documents. Notwithstanding anything contained herein, in every instance SALIC
shall be required to provide paper copies of the Compliance Certificates
required by Section 6.02(b) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by SALIC
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.
The Administrative Agent and each Lender agrees that delivery of the
financial statements and compliance certificate and other documents required
pursuant to Sections 6.01, 6.02 and 6.03 of the Scottish Re Credit Agreement
shall satisfy the Loan Parties obligations under Sections 6.01, 6.02 and 6.03
hereof provided that the compliance certificate refers to both this Agreement
and the Scottish Re Credit Agreement and the Unencumbered Asset Reserve ratio is
calculated using the Aggregate Commitments under this Agreement and the Scottish
Re Credit Agreement.
Each Loan Party hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of such Loan Party
hereunder including materials and/or information regarding the Parent
(collectively, "Borrower Materials") by posting the Borrower Materials on
IntraLinks or another similar electronic system (the "Platform") and (b) certain
of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to any Loan Party or its
securities) (each, a "Public Lender"). Each Loan Party hereby agrees that (w)
all Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that
the word "PUBLIC" shall appear prominently on the first page thereof; (x) by
marking Borrower Materials "PUBLIC," the Loan Parties shall be deemed to have
authorized the Administrative Agent, the Arranger, the L/C Issuer and the
Lenders to treat the Borrower Materials as either publicly available information
or not material information (although it may be sensitive and proprietary) with
respect to the Loan Parties or their respective securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked "PUBLIC" are permitted to be made available through a portion of the
Platform designated "Public Investor;" and (z) the Administrative Agent and the
Arranger shall be entitled to treat the Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor."
6.03 Notices. Promptly notify the Administrative Agent and each Lender
after a Responsible Officer becomes aware thereof:
(a) of the occurrence of any Default;
48
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of a Loan Party or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between a Loan Party or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting a Loan Party or any Subsidiary, including
pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial reporting
practices by the Parent, any Loan Party or any Subsidiary; and
(e) of any announcement by ▇▇▇▇▇'▇ or S&P of any change or possible change
in a Parent Debt Rating.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of SALIC setting forth details of the occurrence referred
to therein and stating what action SALIC has taken and proposes to take with
respect thereto. Each notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.
6.04 Payment of Obligations. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by such Loan Party or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing (to the extent such
concept is applicable) under the Laws of the jurisdiction of its organization
except in a transaction permitted by Section 7.04 or 7.05; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.
6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; and (b)
make all necessary repairs thereto and renewals and replacements thereof except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of SALIC, insurance with respect to
its properties and
49
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons.
6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP or SAP, as
applicable, consistently applied shall be made of all financial transactions and
matters involving the assets and business of such Person or such Subsidiary, as
the case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over such Person or such Subsidiary, as the case may be.
6.10 Inspection Rights. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the applicable Loan Party and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the applicable Loan Party; provided, however, that when an
Event of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the applicable Loan Party at any time during normal
business hours and without advance notice.
6.11 Use of Proceeds. Use the proceeds of the L/C Credit Extensions to
support reinsurance obligations of the Borrower not in contravention of any Law
or of any Loan Document.
6.12 Approvals and Authorizations. Maintain all authorizations, consents,
approvals and licenses from, exemptions of, and filings and registrations with,
each Governmental Authority of the jurisdiction in which each Loan Party is
organized and existing, and all approvals and consents of each other Person in
such jurisdiction, in each case that are required in connection with the Loan
Documents.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any L/C
Borrowing or other Obligation hereunder shall remain unpaid or unsatisfied, or
any Letter of Credit shall remain outstanding, the Loan Parties shall not, and
shall not permit any of their respective Material Subsidiaries to (provided that
the Borrower covenants solely with respect to itself and its respective
Subsidiaries), directly or indirectly:
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7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed,
and (iv) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.03(b);
(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;
(i) Liens securing Indebtedness permitted under Section 7.03(e); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed the cost or fair market value, whichever is lower, of the
property being acquired on the date of acquisition;
(j) Liens on cash, cash equivalents, portfolio securities or Swap Contracts
of a Loan Party and its Subsidiaries pursuant to trust or other security
arrangements or Swap Contracts entered into in connection with Reinsurance
Agreements, Primary Policies, Retrocession Agreements or Other Insurance
Products;
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(k) Liens granted by a Loan Party and its Subsidiaries pursuant to trust or
other security arrangements (including letter of credit facilities) in
connection with Alternative Reserve Agreements;
(l) Liens on cash, cash equivalents, portfolio securities or Swap Contracts
of a Loan Party and its Subsidiaries securing Indebtedness permitted under
Section 7.03(g);
(m) Liens securing Indebtedness permitted under Section 7.03(d) or
Investments permitted under Section 7.02(h); provided that the aggregate fair
market value of the assets securing such Indebtedness and Investment at any one
time shall not exceed $20,000,000; and
(n) Liens not otherwise permitted under this Section 7.01 securing
Indebtedness or obligations under Foreign Benefit Plans provided the aggregate
principal amount of such secured Indebtedness and obligations under Foreign
Benefit Plans outstanding at any time does not exceed the Threshold Amount;
provided, however, that, no Lien shall be permitted to exist on the Equity
Interests of a Loan Party or any of its Material Subsidiaries provided, further,
however, Liens shall be permitted on the Equity Interests in special purpose
entities established in connection with Alternative Reserve Agreements.
7.02 Investments. Make any Investments, except:
(a) Investments held by such Loan Party or such Subsidiary in accordance
with the Investment Policies;
(b) advances to officers, directors and employees of SALIC and
Subsidiaries, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments in any wholly-owned Subsidiary of the Parent;
(d) Investments in Scottish Life to the extent such Investments (i) are
required pursuant to the Scottish Life Keep Well Agreement or otherwise required
by the Governmental Authority regulating Scottish Life or (ii) are used to
acquire Equity Interests in Scottish Life not owned by Scottish US as of the
Effective Date provided that after giving effect to such acquisition the Loan
Parties are in compliance with Section 7.13.
(e) Guarantees permitted by Section 7.03;
(f) Investments in connection with Reinsurance Agreements Primary Policies,
Retrocession Agreements or Other Insurance Products in the ordinary course of
business and Investments in connection with Alternative Reserve Agreements;
(g) Investments in connection with acquisitions permitted under Section
7.13;
(h) ordinary course Investments in reverse repurchase agreements and
securities lending transactions; and
52
(i) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss.
7.03 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03
and any refinancings, refundings, renewals or extensions thereof; provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate;
(c) Guarantees of a Loan Party in respect of Indebtedness of its
wholly-owned Subsidiaries or SALIC otherwise permitted hereunder;
(d) obligations (contingent or otherwise) of a Loan Party or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a "market view;" and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$10,000,000;
(f) Indebtedness in connection with trust preferred securities;
(g) Indebtedness for standby letters of credit issued to insurance or
reinsurance cedants in the ordinary course of business;
(h) Indebtedness for Alternative Reserve Agreements and letters of credit
issued to collateralize Alternative Reserve Agreements;
53
(i) Indebtedness pursuant to the Keep Well Agreements;
(j) Indebtedness pursuant to Scottish Re Credit Agreement and any
refinancings, refundings, renewals or extensions thereof (including any such
refinancings or refundings which increase the amount of such Indebtedness); and
(k) Indebtedness not otherwise permitted under this Section 7.03 in an
aggregate principal amount not to exceed $10,000,000 at any time outstanding;
provided, however, that Scottish Bermuda shall not be permitted to incur any
Indebtedness.
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(a) any Subsidiary of a Loan Party may merge with (i) such Loan Party or
SALIC, provided that such Loan Party or SALIC shall be the continuing or
surviving Person, or (ii) any one or more other Subsidiaries of such Loan Party,
provided that when any wholly-owned Subsidiary is merging with another
Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving
Person;
(b) any Subsidiary of a Loan Party may Dispose of all or substantially all
of its assets (upon voluntary liquidation or otherwise) to such Loan Party or
SALIC or to another Subsidiary of the Borrower or SALIC; provided that if the
transferor in such a transaction is a wholly-owned Subsidiary, then the
transferee must either be SALIC or a wholly-owned Subsidiary;
(c) the Equity Interests of any Subsidiary of any Loan Party may be
transferred to the Parent or another wholly-owned Subsidiary of the Parent;
provided, however, that SALIC may not merge or consolidate with Scottish US or
Scottish Bermuda or any other Person who is or becomes a Purchaser Subsidiary
under the ING Purchase Agreement or any of their respective Subsidiaries.
7.05 Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of Investments (other than Equity Interests in the Loan
Parties or any of their Subsidiaries) in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
54
(d) Dispositions of property by any Subsidiary to SALIC or to a
wholly-owned Subsidiary of the Borrower or SALIC;
(e) Dispositions permitted by Section 7.04; and
(f) Disposition of property after the Effective Date provided the fair
market value of all such property does not exceed $25,000,000;
provided, however, that any Disposition pursuant to clauses (a) through (e)
shall be for fair market value.
7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
or issue or sell any Equity Interests, except that, so long as no Default shall
have occurred and be continuing at the time of any action described below or
would result therefrom:
(a) each Subsidiary of a Loan Party may make Restricted Payments to such
Loan Party and any other Person that owns an Equity Interest in such Subsidiary,
ratably according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;
(b) each Loan Party and each of its Subsidiaries may declare and make
dividend payments or other distributions payable solely in the common stock or
other common Equity Interests of such Person; and
(c) each Loan Party and each of its Subsidiaries may issue Equity Interests
in connection with Investments permitted under Sections 7.02(c) and (d).
7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Parent and
its Subsidiaries on the date hereof or any business substantially related or
incidental thereto or permit Scottish Bermuda to engage in any business other
than the business acquired pursuant to the ING Asset Purchase Agreement and the
ING Reinsurance Agreements to which it is a party.
7.08 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of the Parent, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
such Loan Party or such Subsidiary as would be obtainable by such Loan Party or
such Subsidiary at the time in a comparable arm's length transaction with a
Person other than an Affiliate, provided that the foregoing restriction shall
not apply to transactions between or among SALIC and any of its wholly-owned
Subsidiaries or between and among any wholly-owned Subsidiaries.
7.09 Burdensome Agreements. Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability (i)
of any Loan Party or any of its Subsidiaries to make Restricted Payments to such
Loan Party or to otherwise transfer property to SALIC or any Subsidiary, (ii) of
any Subsidiary to Guarantee the Indebtedness of SALIC or (iii) of SALIC or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; provided, however, that this clause (iii) shall not prohibit any
negative pledge
55
incurred or provided in favor of any holder of Indebtedness permitted under
Section 7.03(e), (h) or (i) solely to the extent any such negative pledge
relates to the property financed by or the subject of such Indebtedness; or (b)
requires the grant of a Lien to secure an obligation of such Person if a Lien is
granted to secure another obligation of such Person.
7.10 Use of Proceeds. Use the proceeds of any L/C Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.
7.11 Financial Covenants.
(a) SALIC Net Worth. Permit SALIC Net Worth during any four quarter period
commencing on April 1 and ending on March 31 ( a "Computation Period") to be
less than the sum of (i) the Minimum SALIC Net Worth (as defined below) plus
(ii) an amount equal to 50% of the Consolidated Net Income of SALIC in each full
fiscal quarter in such Computation Period (with no deduction for a net loss in
any such fiscal quarter) plus (iii) an amount equal to 50% of the aggregate
increases in Shareholders' Equity of SALIC in each full fiscal quarter in such
Computation Period by reason of the issuance and sale of Equity Interests of
SALIC including upon any conversion of debt securities of SALIC into such Equity
Interests or other capital contributions. The initial Minimum SALIC Net Worth
shall be $750,000,000. On each date that financial statements are delivered for
the fiscal quarter ending March 31 pursuant to Section 6.1(b), the Minimum SALIC
Net Worth will be recalculated to be the greater of (x) the required Minimum
SALIC Net Worth as of April 1 of the previous Computation Period (without giving
effect to the increases referred to in the first sentence of this subsection
(a)) and (y) 75% of SALIC Net Worth as of such March 31.
(b) (i) Parent Net Worth. Permit Parent Net Worth during any Computation
Period to be less than the Consolidated Net Income of the Parent in each
full fiscal quarter in such Computation Period (with no deduction for a net
loss in any such fiscal quarter) plus (z) an amount equal to 50% of the
aggregate increases in Shareholders' Equity of the Parent in each full
fiscal quarter during such Computation Period by reason of the issuance and
sale of Equity Interests of the Parent including upon any conversion of
debt securities of the Parent into such Equity Interests or other capital
contributions. The initial Minimum Parent Net Worth shall be $760,000,000.
On each date that financial statements are delivered for the fiscal quarter
ending March 31 pursuant to Section 6.1(b), the Minimum Parent Net Worth
will be recalculated to be the greater of (x) the required Minimum Parent
Net Worth as of April 1 of the previous Computation Period (without giving
effect to the increases referred to in the first sentence of this
subsection (b)(i)) and (y) 75% of the Parent Net Worth as of such March 31.
(ii) Parent Debt to Capitalization Ratio. Permit the Parent Debt to
Capitalization Ratio to be more than 30%.
56
(iii) Calculation of Parent Financial Covenants. For purposes of
calculating the Parent Net Worth and Parent Debt to Capitalization Ratio,
the 5.875% Hybrid Capital Units issued by the Parent and any additional
mezzanine equity or Perpetual Preferred Stock issued by the Parent will be
accorded the same treatment as given to such mezzanine equity or Perpetual
Preferred Stock by S&P. For purposes of calculating the Parent Debt to
Capitalization Ratio, Indebtedness under Alternative Reserve Agreements
will be excluded if neither S&P nor ▇▇▇▇▇'▇ includes Indebtedness under
such Alternative Reserve Agreement as financial leverage.
(c) Unencumbered Asset Reserve Ratio. Permit the ratio of (i) the
Unencumbered Asset Value of SALIC to (ii) the Aggregate Commitments (or if the
Aggregate Commitments have been terminated, the Total Outstandings) to be less
than 1.2:1.0 at any time.
7.12 Restrictions On Negative Pledge Agreements. Enter into or permit any
of its Subsidiaries to enter into or assume any agreement to which it is a
party, other than this Agreement and any agreement required by applicable
insurance regulations which places any restrictions upon the right of such Loan
Party or any of its Subsidiaries to sell, pledge or otherwise dispose of any
material portion of its properties now owned or hereafter acquired other than as
permitted under Section 7.01 (with respect to the property subject to such
Lien).
7.13 Acquisitions. Consummate any acquisition or permit any Subsidiary to
consummate any acquisition (including the acquisition of Equity Interests in
Scottish Life) unless the total consideration paid for such assets or the ceding
commission transferred on a reinsurance transaction, as the case may be, in
connection with any single acquisition does not exceed plus or minus
$100,000,000.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. Any Loan Party fails to pay (i) when and as required to be
paid herein, and in the currency required hereunder, any L/C Obligation, or (ii)
within three days after the same becomes due, any interest on any L/C
Obligation, or any fee due hereunder, or (iii) within five days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or
(b) Specific Covenants. Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10, 6.11 or Article VII;
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any
Loan Party herein, in any other
57
Loan Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading in any material respect when made or deemed
made; or
(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails
to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which such Person is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which such Person is an Affected Party
(as so defined) other than an Early Termination Event (as defined in the
relevant Swap Contract) which permits the counterparty to terminate for its
convenience and, in either event, the Swap Termination Value owed by such Person
as a result thereof is greater than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any
Subsidiary thereof becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or
(h) Judgments. There is entered against any Loan Party or any Subsidiary
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer
58
does not dispute coverage), or (ii) any one or more non-monetary final judgments
that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B)
there is a period of 10 consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA, Foreign Benefit Plan. (i) An ERISA Event occurs with respect to
a Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of SALIC under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the
Threshold Amount, or (ii) SALIC or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount or
(iii) institution of any steps by a Loan Party or any other Person to terminate
a Foreign Benefit Plan if as a result of such termination, a Loan Party or any
of their respective Subsidiaries could be required to make a contribution to
such Foreign Benefit Plan, or could incur a liability or obligation to such
Foreign Benefit Plan, in excess of the Threshold Amount, or (iv) a contribution
failure with respect to any Foreign Benefit Plan sufficient to give rise to a
Lien under applicable Law occurs; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control.
8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding L/C Borrowings,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Loan Parties;
(c) require that the Borrower Cash Collateralize its L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;
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provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to a Loan Party under the Bankruptcy Code of the
United States, the obligation of each Lender and any obligation of the L/C
Issuer to make L/C Credit Extensions shall automatically terminate, all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Borrower to Cash Collateralize its L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the L/C Obligations have automatically been required to
be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders and the L/C Issuer (including fees, charges and disbursements of counsel
to the respective Lenders and the L/C Issuer (including, without duplication,
fees and time charges for attorneys who may be employees of any Lender or the
L/C Issuer) and amounts payable under Article III), ratably among them in
proportion to the amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the L/C Borrowings and other Obligations, ratably among
the Lenders and the L/C Issuer in proportion to the respective amounts described
in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the L/C Borrowings, ratably among the Lenders and the L/C Issuer in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.01(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations of the Borrower, if any, in the order set forth above.
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ARTICLE IX.
AGENT
9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and no Loan Party shall
have rights as a third party beneficiary of any of such provisions.
9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Loan Parties or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
9.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any of the Loan Parties or any of their
respective Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith
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shall be necessary, under the circumstances as provided in Sections 11.01 and
8.02) or (ii) in the absence of its own gross negligence or willful misconduct.
The Administrative Agent shall be deemed not to have knowledge of any Default
unless and until notice describing such Default is given to the Administrative
Agent by SALIC, a Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume
that such condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the issuance of such Letter of Credit. The
Administrative Agent may consult with legal counsel (who may be counsel for a
Loan Party), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
9.05 Delegation of Duties. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
9.06 Resignation of Administrative Agent. The Administrative Agent may at
any time give notice of its resignation to the Lenders, the L/C Issuer and
SALIC. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with SALIC, to appoint a successor, which
shall be a bank with an office in the United States, or an Affiliate of any such
bank with an office in the United States. If no such successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within
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30 days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may on behalf of the Lenders and the L/C
Issuer, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify SALIC and
the Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by SALIC to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between SALIC and such successor. After the retiring
Administrative Agent's resignation hereunder and under the other Loan Documents,
the provisions of this Article and Section 11.04 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer, (b) the retiring L/C Issuer
shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangement
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit.
9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
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9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Bookrunners, Arrangers or syndication agents listed on the cover
page hereof shall have any powers, duties or responsibilities under this
Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.
9.09 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on any Loan Party) shall be entitled and empowered,
by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.01(i) and (j), 2.03 and 11.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.03
and 11.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the L/C Issuer any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
ARTICLE ▇.
▇▇▇▇▇ GUARANTEE
10.01 Unconditional Guarantee. For valuable consideration, receipt whereof
is hereby acknowledged, and to induce the L/C Issuer and each Lender to make L/C
Credit Extensions to and on account of the Borrower and to induce the
Administrative Agent to act hereunder, SALIC hereby unconditionally and
irrevocably guarantees to each Lender, the L/C Issuer and the
64
Administrative Agent the punctual payment when due, whether at stated maturity,
by acceleration or otherwise, of all Obligations of the Borrower, whether for
principal, interest, fees, expenses, indemnification or otherwise, whether
direct or indirect, absolute or contingent or now existing or hereafter arising
(such Obligations being the "Guaranteed Obligations"). Without limiting the
generality of the foregoing, SALIC's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by the Borrower
to the Administrative Agent, the L/C Issuer or any Lender under this Agreement
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving the
Borrower. This is a guarantee of payment and not of collection merely.
10.02 Guarantee Absolute. SALIC guarantees that the Guaranteed Obligations
will be paid strictly in accordance with the terms of this Agreement, regardless
of any Law or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Lender or the Administrative Agent or the L/C
Issuer with respect thereto. The Obligations of SALIC under this Article X are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against SALIC to enforce this Article X, irrespective
of whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of SALIC under this
guarantee shall be irrevocable, absolute and unconditional irrespective of, and
SALIC hereby irrevocably waives any defense it may now or hereafter have in any
way relating to, any or all of the following:
(a) any lack of validity or enforceability of this Agreement or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from this Agreement;
(c) any taking, exchange, release or non-perfection of any collateral or
any taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;
(d) any change, restructuring or termination of the corporate structure or
existence of the Borrower; or
(e) any other circumstance (including, without limitation, any statute of
limitations to the fullest extent permitted by applicable Law) which might
otherwise constitute a defense available to, or a discharge of, SALIC, the
Borrower or a guarantor.
This guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Lender, the L/C Issuer or the
Administrative Agent upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
10.03 Waivers. SALIC hereby expressly waives promptness, diligence, notice
of acceptance, presentment, demand for payment, protest, any requirement that
any right or power
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be exhausted or any action be taken against the Borrower or against any other
guarantor of all or any portion of the Guaranteed Obligations, and all other
notices and demands whatsoever.
(a) SALIC hereby waives any right to revoke this guaranty, and acknowledges
that this guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future and regardless of whether the
Guaranteed Obligations is reduced to zero at any time or from time to time.
(b) SALIC acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated herein and that the
waivers set forth in this Article X are knowingly made in contemplation of such
benefits.
10.04 Subrogation. SALIC will not exercise any rights that it may now or
hereafter acquire against the Borrower or any other insider guarantor that arise
from the existence, payment, performance or enforcement of the Guaranteed
Obligations under this Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Administrative Agent, the L/C
Issuer or any other Lender against a Guaranteed Borrower or any other insider
guarantor or any collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower or any other insider
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations and all other amounts payable
under this guaranty shall have been paid in full in cash and the Commitments
shall have terminated. If any amount shall be paid to SALIC in violation of the
preceding sentence at any time prior to the later of the payment in full in cash
of the Guaranteed Obligations and all other amounts payable under this guaranty
and the termination of the Commitments, such amount shall be held in trust for
the benefit of the Administrative Agent, the L/C Issuer and the Lenders and
shall forthwith be paid to the Administrative Agent to be credited and applied
to the Guaranteed Obligations and all other amounts payable under this guaranty,
whether matured or unmatured, in accordance with the terms of this Agreement, or
to be held as collateral for any Guaranteed Obligations or other amounts payable
under this guaranty thereafter arising. SALIC acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Agreement and that the waiver set forth in this section is knowingly made
in contemplation on such benefits.
10.05 Survival. This guaranty is a continuing guarantee and shall (a)
remain in full force and effect until payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this guaranty and the
termination of the Commitments and the expiration or cancellation of all Letters
of Credit, (b) be binding upon SALIC, its successors and assigns, (c) inure to
the benefit of and be enforceable by each Lender (including each assignee Lender
pursuant to Section 11.06), the L/C Issuer and the Administrative Agent and
their respective successors, transferees and assigns and (d) shall be reinstated
if at any time any payment to a Lender, the L/C Issuer or the Administrative
Agent hereunder is required to be restored by such Lender, the L/C Issuer or the
Administrative Agent. Without limiting the generality of the foregoing clause
(c), each Lender may assign or otherwise transfer its interest in any L/C
Borrowing to any other Person, and such other Person shall thereupon become
vested with all the rights in respect thereof granted to such Lender herein or
otherwise.
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ARTICLE XI.
MISCELLANEOUS
11.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by SALIC
or the Borrower therefrom, shall be effective unless in writing signed by the
Required Lenders and SALIC or the Borrower, as the case may be, and acknowledged
by the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any L/C Borrowing, or (subject to clause (iii) of the second proviso to this
Section 11.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary to amend the definition of "Default Rate" or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate;
(e) change Section 2.07 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) release SALIC from its obligations under Article X without the written
consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent
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hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.
11.02 Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Loan Parties, the Administrative Agent or the L/C
Issuer, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 11.02; and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
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(c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
"Agent Parties") have any liability to any Loan Party, any Lender, the L/C
Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of any Loan
Party's or the Administrative Agent's transmission of Borrower Materials through
the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Agent Party; provided, however, that in no event
shall any Agent Party have any liability to any Loan Party, any Lender, the L/C
Issuer or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Loan Parties, the Administrative
Agent and the L/C Issuer may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to SALIC, the
Administrative Agent and the L/C Issuer.
(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices purportedly given by or on behalf of any Loan Party
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Each Loan Party shall indemnify the
Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of such
Loan Party. All telephonic notices to and other telephonic communications with
the Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.
11.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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11.04 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Loan Parties shall pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated). The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the L/C Issuer in connection with the issuance, amendment, renewal
or extension of any Letter of Credit issued for the Borrower's account or any
demand for payment thereunder and (ii) all out-of-pocket expenses incurred by
the Administrative Agent, any Lender or the L/C Issuer (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Lender or the L/C Issuer), and, without duplication, all fees and time charges
for attorneys who may be employees of the Administrative Agent, any Lender or
the L/C Issuer, in connection with the enforcement or protection of its rights
against the Borrower (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection with
the Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Letters of Credit.
(b) Indemnification by Loan Parties. Each Loan Party shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), and,
without duplication, shall indemnify and hold harmless each Indemnitee from all
fees and time charges and disbursements for attorneys who may be employees of
any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by such Loan Party arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby by such
Loan Party, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Letter of Credit issued for the account
of the Borrower or the use or proposed use of the proceeds therefrom (including
any refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by such Loan Party or any of its Subsidiaries, or any Environmental
Liability related in any way to such Loan Party or any of its Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by such Loan Party, and regardless
of whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee or (y) result from
a claim brought by such Loan Party against an Indemnitee for breach in bad faith
70
of such Indemnitee's obligations hereunder or under any other Loan Document, if
such Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that any Loan Party for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender's Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.06(c).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, no Loan Party shall assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Letter of Credit or the use of
the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
(e) Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent and the L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
11.05 Payments Set Aside. To the extent that any payment by or on behalf of
any Loan Party is made to the Administrative Agent, the L/C Issuer or any
Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer
71
severally agrees to pay to the Administrative Agent upon demand its applicable
share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect, in the applicable currency of such recovery or
payment. The obligations of the Lenders and the L/C Issuer under clause (b) of
the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.
11.06 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment participations in
L/C Obligations at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the L/C Borrowings at the time
owing to it or in the case of an assignment to a Lender, the aggregate
amount of the Commitment (which for this purpose includes L/C Borrowings
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the L/C Borrowings of the assigning Lender
subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if "Trade Date" is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, SALIC otherwise consents (each such consent not
to be unreasonably withheld or delayed;
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the L/C Borrowings or the Commitment
assigned;
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(iii) any assignment of a Commitment must be approved by the
Administrative Agent and the L/C Issuer (such approval not to be
unreasonably withheld or delayed) unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount of $2,500, and the Eligible
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 11.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the L/C Obligations owing to, each Lender pursuant to
the terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by each of the Borrower and the L/C Issuer at any reasonable time and
from time to time upon reasonable prior notice. In addition, at any time that a
request for a consent for a material or substantive change to the Loan Documents
is pending, any Lender wishing to consult with other Lenders in connection
therewith may request and receive from the Administrative Agent a copy of the
Register.
(d) Participations. Any Lender may at any time, without the consent of, or
notice to, any Loan Party or the Administrative Agent, sell participations to
any Person (other than a natural person or SALIC or any of SALIC's Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment (including such Lender's participations in L/C Obligations) owing
to it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent, the Lenders and the L/C Issuer
73
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 11.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.07 as though it were a
Lender.
(e) Limitation upon Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with SALIC's prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 3.01 unless SALIC is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Resignation as L/C Issuer after Assignment. Notwithstanding anything to
the contrary contained herein, if at any time Bank of America assigns all of its
Commitment and L/C Borrowings pursuant to subsection (b) above, Bank of America
may, upon 30 days' notice to SALIC and the Lenders, resign as L/C Issuer. In the
event of any such resignation as L/C Issuer, SALIC shall be entitled to appoint
from among the Lenders a successor L/C Issuer hereunder; provided, however, that
no failure by SALIC to appoint any such successor shall affect the resignation
of Bank of America as L/C Issuer. If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations
74
with respect thereto (including the right to require the Lenders to fund risk
participations in Unreimbursed Amounts pursuant to Section 2.01(c)).
11.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to a Loan Party and its obligations, (g) with the consent of SALIC or
(h) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than a Loan Party.
For purposes of this Section, "Information" means all information received
from the Borrower or any Subsidiary thereon relating to a Loan Party or any
Subsidiary thereof or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the L/C
Issuer on a nonconfidential basis prior to disclosure by a Loan Party or any
Subsidiary thereof, provided that, in the case of information received from a
Loan Party or any Subsidiary thereof after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
11.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, after obtaining the
prior written consent of the Administrative Agent, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of any Loan Party against any and all of the obligations of such Loan Party now
or hereafter existing under this Agreement or any other Loan Document to such
Lender or the L/C Issuer, irrespective of whether or not such Lender or the L/C
Issuer shall have made any demand under this Agreement or any other Loan
Document and although such obligations of such Loan Party may be contingent or
unmatured or are owed to a
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branch or office of such Lender or the L/C Issuer different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender, the L/C Issuer and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have. Each
Lender and the L/C Issuer agrees to notify SALIC and the Administrative Agent
promptly after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
11.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
11.10 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
11.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any L/C Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
11.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or
76
impaired thereby and (b) the parties shall endeavor in good faith negotiations
to replace the illegal, invalid or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the illegal, invalid or unenforceable provisions. The invalidity of a provision
in a particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
11.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender or if any other
circumstance exists hereunder that gives SALIC the right to replace a Lender as
a party hereto, then SALIC may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 11.06), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:
(a) SALIC shall have paid to the Administrative Agent the assignment fee
specified in Section 11.06(b);
(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its L/C Advances, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.05) from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling SALIC to require such assignment and delegation cease to
apply.
11.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE CHOICE OF GOVERNING LAW
HAS BEEN MADE PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
(b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND
ANY APPELLATE COURT FROM
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ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE ANY LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. ON OR PRIOR TO THE EFFECTIVE DATE, EACH LOAN PARTY
SHALL APPOINT CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE ON THE
DATE HEREOF AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, AS ITS
AGENT TO RECEIVE ON ITS BEHALF AND ITS PROPERTY SERVICE OF THE SUMMONS AND
COMPLAINTS AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING, PROVIDED THAT A COPY OF SUCH PROCESS IS ALSO MAILED IN THE MANNER
PROVIDED IN SECTION 11.02. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A
COPY OF SUCH PROCESS TO THE LOAN PARTIES IN CARE OF THE PROCESS AGENT AT THE
PROCESS AGENT'S ABOVE ADDRESS, AND EACH LOAN PARTY HEREBY IRREVOCABLY AUTHORIZES
AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. EACH PARTY
HERETO ALSO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF
ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAW.
11.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY
78
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
11.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Loan Parties that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies the Loan Parties, which information includes the
name and address of each Loan Party and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify such Loan Party
in accordance with the Act.
11.17 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each Loan
Party in respect of any such sum due from it to the Administrative Agent or the
Lenders hereunder or under the other Loan Documents shall, notwithstanding any
judgment in a currency (the "Judgment Currency") other than that in which such
sum is denominated in accordance with the applicable provisions of this
Agreement (the "Agreement Currency"), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent of any sum
adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from any Loan Party
in the Agreement Currency, such Loan Party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
Person to whom such obligation was owing against such loss. If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent in such currency, the Administrative Agent agrees to return
the amount of any excess to such Loan Party (or to any other Person who may be
entitled thereto under applicable law).
11.18 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
79
11.19 Lender Status. Each Lender represents that it is authorized to carry
on the activities set out in the Schedule to the European Communities (Licensing
and Supervision of Credit Institutions) Regulations, 1992 (the "Banking
Regulations") (including, but not limited to, providing guarantees and
commitments) within Ireland by the establishment of a branch or by way of the
provision of services and that the undertaking or provision of such activities
is in accordance with such Lender's authorization in the jurisdiction in which
it is formed and the requirements of the Banking Regulations have been complied
with in full.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SCOTTISH ANNUITY & LIFE INSURANCE
COMPANY (CAYMAN) LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Chief Financial Officer
------------------------------------
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SCOTTISH RE (DUBLIN) LIMITED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Manager
------------------------------------
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BANK OF AMERICA, N.A., as Administrative
Agent, Lender and L/C Issuer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
------------------------------------
▇-▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇ ▇▇▇▇ BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Managing Director
------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Director
------------------------------------
S-4
HSBC BANK Plc
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Relationship Manager, Insurance
-----------------------------------
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