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EXHIBIT 10.1
$300,000,000
CREDIT AGREEMENT
Dated as of June 30, 1998
among
IPCRe LIMITED,
as Borrower,
THE LENDERS NAMED HEREIN,
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
and
CITIBANK, N.A.,
as Documentation Agent
-----------------------------------------------------
Arranged By
FIRST CHICAGO CAPITAL MARKETS, INC.
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS...........................................................................................1
ARTICLE II - THE CREDITS.........................................................................................12
2.1. Commitment.....................................................................................12
2.2. Required Payments; Termination.................................................................12
2.3. Ratable Loans..................................................................................12
2.4. Types of Advances..............................................................................12
2.5. Facility Fee; Reductions in Aggregate Commitment...............................................12
2.6. Minimum Amount of Each Advance.................................................................13
2.7. Optional Principal Payments....................................................................13
2.8. Method of Selecting Types and Interest Periods for New Advances................................13
2.9. Conversion and Continuation of Outstanding Advances............................................13
2.10. Changes in Interest Rate, etc..................................................................14
2.11. Rates Applicable After Default.................................................................14
2.12. Method of Payment..............................................................................15
2.13. Noteless Agreement; Evidence of Indebtedness...................................................15
2.14. Telephonic Notices.............................................................................16
2.15. Interest Payment Dates; Interest and Fee Basis.................................................16
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions..........................................................................16
2.17. Lending Installations..........................................................................16
2.18. Non-Receipt of Funds by the Agent..............................................................17
ARTICLE III - YIELD PROTECTION; TAXES............................................................................17
3.1. Yield Protection...............................................................................17
3.2. Changes in Capital Adequacy Regulations........................................................18
3.3. Availability of Types of Advances..............................................................19
3.4. Funding Indemnification........................................................................19
3.5. Taxes..........................................................................................19
3.6. Lender Statements; Survival of Indemnity.......................................................21
3.7. Right to Substitute Lender.....................................................................21
ARTICLE IV - CONDITIONS PRECEDENT................................................................................22
4.1. Conditions to Effectiveness....................................................................22
4.2. Each Advance...................................................................................23
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ARTICLE V - REPRESENTATIONS AND WARRANTIES ......................................................................23
5.1. Existence and Standing.........................................................................23
5.2. Authorization and Validity.....................................................................24
5.3. Compliance with Laws and Contracts.............................................................24
5.4. Governmental Consents..........................................................................24
5.5. Financial Statements...........................................................................25
5.6. Material Adverse Change........................................................................25
5.7. Taxes..........................................................................................25
5.8. Litigation and Contingent Obligations..........................................................25
5.9. Capitalization.................................................................................25
5.10. Defaults.......................................................................................26
5.11. Federal Reserve Regulations....................................................................26
5.12. Investment Company.............................................................................26
5.13. Certain Fees...................................................................................26
5.14. Ownership of Properties........................................................................26
5.15. Indebtedness...................................................................................27
5.16. Material Agreements............................................................................27
5.17. Insurance......................................................................................27
5.18. Insurance Licenses.............................................................................27
5.19. Filing.........................................................................................27
5.20. Year 2000......................................................................................28
5.21. Disclosure.....................................................................................28
ARTICLE VI - COVENANTS...........................................................................................28
6.1. Financial Reporting............................................................................28
6.2. Use of Proceeds................................................................................30
6.3. Notice of Default..............................................................................30
6.4. Conduct of Business............................................................................31
6.5. Taxes..........................................................................................31
6.6. Insurance......................................................................................31
6.7. Compliance with Laws...........................................................................31
6.8. Maintenance of Properties......................................................................32
6.9. Inspection.....................................................................................32
6.10. Dividends......................................................................................32
6.11. Indebtedness...................................................................................32
6.12. Merger.........................................................................................33
6.13. Sale of Assets.................................................................................33
6.14. Investments and Acquisitions...................................................................33
6.15. Contingent Obligations.........................................................................34
6.16. Liens..........................................................................................34
6.17. Affiliates.....................................................................................35
6.18. Change in Structure; Fiscal Year...............................................................35
6.19. Inconsistent Agreements........................................................................35
6.20. Financial Covenants............................................................................35
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6.20.1. Leverage Ratio........................................................................35
6.20.2. Minimum Consolidated Borrower Net Worth...............................................35
6.20.3. Minimum Consolidated Parent Net Worth.................................................35
6.21. Year 2000......................................................................................36
6.22. Reinsurance....................................................................................36
6.23. ERISA..........................................................................................36
ARTICLE VII - DEFAULTS...........................................................................................36
ARTICLE VIII - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................................................39
8.1. Acceleration...................................................................................39
8.2. Amendments.....................................................................................39
8.3. Preservation of Rights.........................................................................40
ARTICLE IX - GENERAL PROVISIONS..................................................................................40
9.1. Survival of Representations....................................................................40
9.2. Governmental Regulation........................................................................40
9.3. Headings.......................................................................................40
9.4. Entire Agreement...............................................................................40
9.5. Several Obligations; Benefits of this Agreement................................................40
9.6. Expenses; Indemnification......................................................................41
9.7. Numbers of Documents...........................................................................41
9.8. Accounting.....................................................................................41
9.9. Severability of Provisions.....................................................................41
9.10. Nonliability of Lenders........................................................................42
9.11. Confidentiality................................................................................42
9.12. Nonreliance....................................................................................42
9.13. Disclosure.....................................................................................42
ARTICLE X - THE AGENT............................................................................................43
10.1. Appointment; Nature of Relationship............................................................43
10.2. Powers.........................................................................................43
10.3. General Immunity...............................................................................43
10.4. No Responsibility for Loans, Recitals, etc.....................................................43
10.5. Action on Instructions of Lenders..............................................................44
10.6. Employment of Agents and Counsel...............................................................44
10.7. Reliance on Documents; Counsel.................................................................44
10.8. Agent's Reimbursement and Indemnification......................................................44
10.9. Notice of Default..............................................................................45
10.10. Rights as a Lender..............................................................................45
10.11. Lender Credit Decision..........................................................................45
10.12. Successor Agent.................................................................................46
10.13. Agent's and Arranger's Fees.....................................................................46
10.14. Delegation to Affiliates.......................................................................46
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10.15. Documentation Agent............................................................................46
ARTICLE XI - SETOFF; RATABLE PAYMENTS............................................................................47
11.1. Setoff.........................................................................................47
11.2. Ratable Payments...............................................................................47
ARTICLE XII - BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................................................47
12.1. Successors and Assigns.........................................................................47
12.2. Participations.................................................................................48
12.2.1 Permitted Participants; Effect.........................................................48
12.2.2. Voting Rights.........................................................................48
12.2.3. Benefit of Setoff.....................................................................48
12.3. Assignments....................................................................................49
12.3.1. Permitted Assignments.................................................................49
12.3.2. Effect; Effective Date................................................................49
12.4. Dissemination of Information...................................................................49
12.5. Tax Treatment..................................................................................50
ARTICLE XIII - NOTICES...........................................................................................50
13.1. Notices........................................................................................50
13.2. Change of Address..............................................................................50
ARTICLE XIV - COUNTERPARTS.......................................................................................51
ARTICLE XV - CHOICE OF LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL.....................................................................51
15.1. CHOICE OF LAW..................................................................................51
15.2. CONSENT TO JURISDICTION........................................................................51
15.3. WAIVER OF JURY TRIAL...........................................................................52
15.4. Judgment Currency...............................................................................52
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EXHIBITS
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Exhibit A - Note
Exhibit B - Compliance Certificate
Exhibit C - Assignment Agreement
Exhibit D - Loan/Credit Related Money Transfer Instruction
SCHEDULES
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Pricing Schedule
Schedule 5.9 - Capitalization
Schedule 5.14 - Owned Properties
Schedule 5.15 - Indebtedness
Schedule 5.18 - Insurance Licenses
Schedule 6.16 - Liens
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CREDIT AGREEMENT
This Agreement, dated as of June 30, 1998, is among IPCRe Limited, the
Lenders and The First National Bank of Chicago, as Agent.
R E C I T A L S:
A. The Borrower has requested that the Lenders make financial
accommodations to it in the aggregate principal amount of $300,000,000, the
proceeds of which the Borrower may use for its general corporate needs.
B. The Lenders are willing to extend such financial accommodations on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Lenders and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"ABR Advance" means an Advance which bears interest at the Alternate
Base Rate.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger,
amalgamation or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors (other than securities
having such power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding ownership interests
of a partnership or limited liability company.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to
the Borrower of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as
contractual representative of the Lenders pursuant to Article X, and not in its
individual capacity as a Lender, and any successor Agent appointed pursuant to
Article X.
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"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles in the United States as in effect from time to time, applied in a
manner consistent with that used in preparing the financial statements referred
to in Section 5.5(i) and (ii).
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day or (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Annual Statement" means the annual statutory financial statement of
the Borrower or any Insurance Subsidiary required to be filed with the insurance
commissioner (or similar authority) of its jurisdiction of formation, which
statement shall be in form required by the Borrower's or such Insurance
Subsidiary's jurisdiction of formation, together with all exhibits or schedules
filed therewith.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Facility Fees are accruing on the Aggregate Commitment (without regard
to usage) at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the president or the chief financial
officer of the Borrower, acting singly.
"Borrower" means IPCRe Limited, a Bermuda corporation, and its
successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, New York and London for the conduct
of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
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"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by ▇▇▇▇▇'▇, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $500,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock
of the Parent, or (ii) the Parent shall cease to own beneficially and of record,
free and clear of all Liens, other encumbrances, or voting agreements,
restrictions or trusts of any kind, 100% of the outstanding shares of voting
stock of the Borrower on a fully diluted basis, or (iii) during any period of 12
consecutive calendar months, commencing on the date of this Agreement, the
ceasing of those individuals (the "Continuing Directors") who (a) were directors
of the Parent on the first day of each such period or (b) subsequently became
directors of the Parent and whose initial election or initial nomination for
election subsequent to that date was approved by a majority of the Continuing
Directors then on the board of directors of the Parent, to constitute a majority
of the board of directors of the Parent.
"Charter Documents" means (i) in respect of the Borrower, its
Certificate of Incorporation, Memorandum of Association and Bye-Laws and (ii) in
respect of each Subsidiary, its charter documents, in each case as amended,
supplemented or modified from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below or as
set forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Consolidated Borrower Net Income" means, with reference to any period,
the net income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles.
"Consolidated Borrower Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles, excluding, however, for the purposes of Section 6.20, the effect of
any unrealized gain or loss reported under Statement of Financial Accounting
Standards No. 115.
"Consolidated Parent Net Income" means, with reference to any period,
the net income (or loss) of the Parent and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles.
"Consolidated Parent Net Worth" means at any time the consolidated
stockholders' equity of the Parent and its Subsidiaries calculated on a
consolidated basis for such period in accordance with Agreement Accounting
Principles, excluding, however, for the purposes of Section 6.20, the effect of
any unrealized gain or loss reported under Statement of Financial Accounting
Standards No. 115.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or
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otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract; provided, that "Contingent
Obligation" shall not include the obligations of the Borrower or any Insurance
Subsidiary arising under any insurance policy or reinsurance agreement entered
into in the ordinary course of business.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes. The Corporate Base Rate is a
reference rate and does not necessarily represent the lowest or best rate of
interest actually charged to any customer. First Chicago may make commercial
loans or other loans at rates of interest at, above or below the Corporate Base
Rate.
"Default" means an event described in Article VII.
"Effective Date" is defined in Section 4.1.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at the
applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable London interbank offered rate for
deposits in U.S. dollars appearing on Dow ▇▇▇▇▇ Markets (Telerate) Page 3750 as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity approximately equal to such Interest
Period. If no London interbank offered rate of such maturity then appears on Dow
▇▇▇▇▇ Markets (Telerate) Page 3750, then the Eurodollar Base Rate shall be equal
to the London interbank offered rate for deposits in U.S. dollars maturing
immediately before or immediately after such maturity, whichever is higher, as
determined by the Agent from Dow ▇▇▇▇▇ Markets (Telerate) Page 3750. If Dow
▇▇▇▇▇ Markets (Telerate) Page 3750 is not available, the applicable Eurodollar
Base Rate for the relevant Interest Period shall be the rate determined by the
Agent to be the rate at which First Chicago offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of First Chicago's relevant portion
of the Eurodollar Advance and having a maturity approximately equal to such
Interest Period.
"Eurodollar Loan" means a Loan which bears interest at the applicable
Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
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"Facility Fee" is defined in Section 2.5.
"Facility Termination Date" means June 30, 2003 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent.
"Financial Statements" is defined in Section 5.5.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fiscal Quarter" means each of the four quarterly accounting periods in
each Fiscal Year.
"Fiscal Year" means the twelve month accounting period commencing on
January 1 and ending on December 31 of each year.
"Governmental Authority" means any nation or government (foreign or
domestic), any state or other political subdivision thereof or any governmental
body, agency, authority, department or commission (including without limitation
any board of insurance, insurance department or insurance commissioner and any
taxing authority or political subdivision) or any instrumentality or officer
thereof (including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other entity
directly or indirectly owned or controlled by or subject to the control of any
of the foregoing.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
property arising out of or in connection with the sale of the same or
substantially similar securities or property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations, (viii) obligations for which such
Person is obligated pursuant to or in respect of a Letter of Credit, including
without limitation any application for a Letter of Credit, (ix) repurchase
obligations or liabilities of such Person with respect to accounts or notes
receivable sold by such Person, and (x) any other obligation for borrowed money
or other financial accommodation which in accordance with Agreement Accounting
Principles would be shown as a liability on the consolidated balance sheet of
such Person. For the purpose of determining compliance with Section 6.11, the
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Insurance Subsidiary" means any Subsidiary which is engaged in the
insurance business.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall
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end on the day which corresponds numerically to such date one, two, three or six
months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, at any time, the ratio of (i) the consolidated
Indebtedness of the Borrower and its Subsidiaries (excluding Letter of Credit
obligations incurred by the Borrower and its Subsidiaries in the ordinary course
of business) at such time to (ii) the sum of the consolidated Indebtedness of
the Borrower and its Subsidiaries (excluding Letter of Credit obligations
incurred by the Borrower and its Subsidiaries in the ordinary course of
business) plus Consolidated Borrower Net Worth at such time.
"License" means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Governmental Authority
in connection with the operation, ownership or transaction of insurance
business.
"Lien" means any lien (statutory or other), charge, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement and any Notes issued pursuant to
Section 2.13 and the other documents and agreements contemplated hereby and
executed by the Borrower in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under
Regulation U.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries taken as a whole, (ii) the ability
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of the Borrower to perform its obligations under the Loan Documents, or (iii)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent or the Lenders thereunder.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States toward the promotion of
uniformity in the practices of such Governmental Authorities.
"Net Proceeds" means cash or readily available marketable cash
equivalents received in respect of any sale or issuance of equity securities of
any Person or any capital contributions received by such Person, net of all
legal expenses, commissions and other fees and all costs and expenses incurred
as a result of such sale or issuance.
"Non-U.S. Borrower" is defined in Section 3.1(b).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.13 in the form of Exhibit A.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party arising under the Loan
Documents.
"Other Taxes" is defined in Section 3.5(ii).
"Parent" means IPC Holdings, Ltd., a Bermuda company.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
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"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by securities brokers and dealers for the
purpose of purchasing or carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"SAP" means, with respect to the Borrower or any Insurance Subsidiary,
the statutory accounting principles prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such Person for
the preparation of Annual Statements in effect from time to time, applied in a
manner consistent with those used in preparing the Annual Statements referred to
in Section 6.1(iii).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
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"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings imposed by a Governmental Authority
with respect to Loans or the Commitments, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as an ABR Advance
or a Eurodollar Advance.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries.
"Year 2000 Program" is defined in Section 5.20.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1 Commitment. From and including July 23, 1998 and prior to the
Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the amount of its Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the Facility
Termination Date.
2.2 Required Payments; Termination. Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4 Type of Advances. The Advances may be ABR Advances or Eurodollar
Advances, or a combination thereof, selected by the Borrower in accordance with
Sections 2.8 and 2.9.
2.5 Facility Fee; Reduction in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender a facility fee (the
"Facility Fee") at a per annum rate equal to the Applicable Fee Rate on the
Aggregate Commitment (regardless of usage) from July 23, 1998 to and including
the Facility Termination Date, payable on each Payment Date hereafter and on the
Facility Termination Date. The Borrower may
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permanently reduce the Aggregate Commitment in whole, or in part ratably among
the Lenders in a minimum amount of $5,000,000 (and integral multiples of
$1,000,000 in excess thereof), upon at least three Business Days' written notice
to the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Commitment may not be
reduced below the aggregate principal amount of the outstanding Advances. All
accrued Facility Fees shall be payable on the effective date of any termination
of the obligations of the Lenders to make Loans hereunder.
2.6 Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each ABR Advance shall be in the minimum amount of $5,000,000 (and
in multiples of $1,000,000 if in excess thereof); provided, however, that any
ABR Advance may be in the amount of the unused Aggregate Commitment.
2.7 Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding ABR Advances, or, in a minimum
aggregate amount of $1,000,000 any portion of the outstanding ABR Advances, upon
one Business Day's prior notice to the Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $5,000,000 or any integral multiple of
$1,000,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three Business Days' prior notice to the Agent.
2.8 Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each ABR Advance and three Business Days before the Borrowing
Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9 Conversion and Continuation of Outstanding Advances. ABR Advances
shall continue as ABR Advances unless and until such ABR Advances are converted
into Eurodollar Advances pursuant to this Section 2.9 or are repaid in
accordance with Section 2.2 or 2.7. Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically converted
into an ABR Advance unless (x) such Eurodollar Advance is or was repaid in
accordance with Section 2.2 or 2.7 or (y) the Borrower shall have given the
Agent a Conversion/Continuation Notice (as defined below) requesting that, at
the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to the terms
of Section 2.6, the Borrower may elect from time to time to convert all or any
part of an ABR Advance into a Eurodollar Advance. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an ABR Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (Chicago time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying:
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(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.10 Changes in Interest Rate, etc. Each ABR Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into an ABR Advance pursuant to Section 2.9, to but excluding
the date it is paid or is converted into a Eurodollar Advance pursuant to
Section 2.9 hereof, at a rate per annum equal to the Alternate Base Rate for
such day. Changes in the rate of interest on that portion of any Advance
maintained as an ABR Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period
may end after the Facility Termination Date.
2.11 Rates, Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of an Unmatured
Default pursuant to Section 7.2 or a Default, the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each ABR Advance shall bear interest at a rate per annum
equal to the Alternate Base Rate in effect from time to time plus 2% per annum,
provided that, during the continuance of a Default under Section 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above shall be applicable to
all Advances without any election or action on the part of the Agent or any
Lender.
2.12 Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Agent at the Agent's address specified pursuant to Article XIII, or
at any other Lending Installation of the Agent specified in writing by the Agent
to the Borrower, by noon (local time) on the date when due and shall be applied
ratably by the Agent among the Lenders. Each payment delivered to the Agent for
the account of any Lender shall be delivered promptly by the Agent to such
Lender in the same type of funds that the Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized to
charge the account of the Borrower maintained with First Chicago for each
payment of principal, interest and fees as it becomes due hereunder.
2.13 Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (c) the amount of any sum received by the Agent hereunder from the Borrower
and each Lender's share thereof.
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(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender in a form supplied by the Agent.
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after any assignment pursuant to Section 12.3) be represented
by one or more Notes payable to the order of the payee named therein or any
assignee pursuant to Section 12.3, except to the extent that any such Lender or
assignee subsequently returns any such Note for cancellation and requests that
such Loans once again be evidenced as described in paragraphs (i) and (ii)
above.
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each ABR Advance shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof, on any date on which the ABR
Advance is prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued on that portion of the outstanding principal amount of any ABR
Advance converted into a Eurodollar Advance on a day other than a Payment Date
shall be payable on the date of conversion. Interest accrued on each Eurodollar
Advance shall be payable on the last day of its applicable Interest Period, on
any date on which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest on
Eurodollar Advances and Facility Fees shall be calculated for actual days
elapsed on the basis of a 360-day year, and interest on ABR Advances shall be
calculated for the actual days elapsed on the basis of a 365 or 366 day year, as
applicable. Interest shall be payable for the day an Advance is made but not for
the day of any payment on the amount paid if payment is received prior to noon
(local time) at the place of payment. If any payment of principal of or interest
on an Advance shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.17. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of such Lending Installation. Each
Lender may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it and for whose account Loan payments are to be
made.
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2.18. NonReceipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (y) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan (or, if no Loan is
then outstanding, at the interest rate that would apply to ABR Advances on such
day).
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. (a) If, on or after the date of this Agreement,
the adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any
governmental or quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender or applicable Lending Installation with any request or directive (whether
or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation to
any Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its Eurodollar Loans, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining its Eurodollar Loans or
reduces any amount receivable by any Lender or any applicable
Lending Installation in connection with its Eurodollar Loans,
or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of
Eurodollar Loans held or interest received by it, by an amount
deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Eurodollar Loans or Commitment, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
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(b) Non-U.S. Reserve Costs With Respect to Loans to Non-U.S. Borrowers.
If any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive of any jurisdiction outside of the United States of
America or any subdivision thereof (whether or not having the force of law),
imposes or deems applicable any reserve requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender or any applicable
Lending Installation, and the result of the foregoing is to increase the cost to
such Lender or applicable Lending Installation of making or maintaining its
Eurodollar Loans to any Borrower that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Borrower") or its
Commitment to any Non-U.S. Borrower or to reduce the return received by such
Lender or applicable Lending Installation in connection with such Eurodollar
Loans to any Non-U.S. Borrower or Commitment to any Non-U.S. Borrower, then,
within 15 days of demand by such Lender, such Non-U.S. Borrower shall pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received, provided that such Non-U.S.
Borrower shall not be required to compensate any Lender for such non-U.S.
reserve costs to the extent that an amount equal to such reserve costs is
received by such Lender as a result of the calculation of the interest rate
applicable to Eurodollar Advances pursuant to clause (i)(b) of the definition of
"Eurodollar Rate."
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the RiskBased Capital Guidelines or (ii) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, then the Agent shall suspend the availability of the
affected Type of Advance and require any affected Eurodollar Advances to be
repaid or converted to ABR Advances, subject to the payment of any funding
indemnification amounts required by Section 3.4. If the Required Lenders
determine that (i) deposits of a type and maturity appropriate to match fund
Eurodollar Advances are not available or (ii) the interest rate applicable to a
Type of Advance does not accurately reflect the cost of making or maintaining
such Advance, then the Agent shall suspend the availability of the affected Type
of Advance for any Advance made subsequent to the date of such suspension,
subject to the payment of any funding indemnification amounts required by
Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made, converted or continued on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.
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3.5. Taxes. (i) All payments by the Borrower to or for the account of
any Lender or the Agent hereunder or under any Note shall be made free and clear
of and without deduction for any and all Taxes. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, (a) 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 3.5) such Lender or the
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish
to the Agent the original copy of a receipt evidencing payment thereof within 30
days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by
the Agent or such Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such
Lender makes demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten Business Days after July 23, 1998, (i) deliver to each
of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to each
of the Borrower and the Agent a United States Internal Revenue Form W-8 or W-9,
as the case may be, and certify that it is entitled to an exemption from United
States backup withholding tax. Each Non-U.S. Lender further undertakes to
deliver to each of the Borrower and the Agent (x) renewals or additional copies
of such form (or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring
a change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Borrower or the Agent.
All forms or amendments described in the preceding sentence shall certify that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation or
any change in the interpretation or administration thereof by any Governmental
Authority) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form or
amendment with respect to it and such Lender advises the Borrower and the Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any Governmental Authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Non-U.S. Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any treaty
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shall deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, 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.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Loans to reduce any liability of the Borrower
to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
3.7. Right to Substitute Lender. Any Lender claiming any additional
amounts payable pursuant to Section 3.1 or 3.2 or unable to make a Type of
Advance available in accordance with Section 3.3, shall, so long as no Default
or Unmatured Default has occurred and is continuing, upon the written request of
the Borrower delivered to such Lender and the Agent, assign, pursuant to and in
accordance with the provisions of Section 12.3, all of its rights and
obligations under this Agreement and under the Loan Documents to another Lender
or to a commercial bank, other financial institution, commercial finance company
or other business lender selected by the Borrower and reasonably acceptable to
the Agent that has agreed not to claim any additional amounts under Section 3.1
or 3.2 with respect to some or all of the taxes or regulatory changes that gave
rise to such assigning Lender's claim for such compensation, or that has agreed
to make the Type of Advance available that was not made available from such
assigning Lender, in consideration for the payment by such assignee to such
assigning Lender of the principal of, and interest accrued and unpaid to the
date of such assignment on, the Loans held by such assigning Lender, the payment
by the Borrower to such assigning Lender of any and all other amounts owing to
such assigning Lender under any provision of this Agreement accrued and unpaid
to the date of such assignment and the Borrower's release of such assigning
Lender from any further obligation or liability under this Agreement and the
Loan Documents. Notwithstanding anything to the contrary contained in this
Section 3.7, in no event shall the replacement of any Lender result in a
decrease or reallocation of the Aggregate Commitment without the prior written
consent of each of the remaining Lenders.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Conditions to Effectiveness. This Agreement shall become
effective on the date (the "Effective Date") upon which the Agent receives (with
sufficient copies for the Lenders) each of the following documents:
(i) Charter; Certificate of Compliance. Copies of the memorandum
of association of the Borrower, together with all amendments,
and a certificate of compliance of the Borrower, each
certified by the Bermuda Registrar of Companies.
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(ii) Bye-Laws and Resolutions. Copies, certified by the Secretary
or Assistant Secretary of the Borrower, of its byelaws and of
its Board of Directors' resolutions and of resolutions or
actions of any other body authorizing the execution of the
Loan Documents.
(iii) Secretary's Certificate. An incumbency certificate, executed
by the Secretary or Assistant Secretary of the Borrower, which
shall identify by name and title and bear the signatures of
the Authorized Officers and any other officers of the Borrower
authorized to sign the Loan Documents to which the Borrower is
a party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in
writing by the Borrower.
(iv) Officer's Certificate. A certificate, signed by the chief
financial officer of the Borrower, stating that (a) on the
Effective Date no Default or Unmatured Default has occurred
and is continuing, and (b) each of the representations and
warranties set forth in Article V of this Agreement is true
and correct on and as of such date.
(v) Legal Opinions. Written opinions of the Borrower's U.S. and
Bermuda counsel, addressed to Agent and the Lenders in form
and substance reasonably acceptable to the Agent and its
counsel.
(vi) Notes. Any Notes requested by a Lender pursuant to Section
2.13 payable to the order of each such requesting Lender.
(vii) Loan Documents. Originals of this Agreement and each of the
other Loan Documents, which shall be executed by all parties
thereto and in full force and effect, together with all
schedules, exhibits, certificates, instruments, documents and
financial statements required to be delivered pursuant hereto
or thereto.
(viii) Letter of Direction. Written money transfer instructions, in
substantially the form of Exhibit D, addressed to the Agent
and signed by an Authorized Officer, together with such other
related money transfer authorizations as the Agent may have
reasonably requested.
(ix) Other. Such other documents as any Lender or its counsel may
have reasonably requested.
4.2. Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V
(other than Section 5.6) are true and correct as of such
Borrowing Date except to the extent any such representation or
warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been
true and correct on and as of such earlier date.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an Advance.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
5.3. Compliance with Laws and Contracts. The Borrower and its
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any Governmental
Authority having jurisdiction over the conduct of their respective businesses or
the ownership of their respective properties, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
Neither the execution and delivery by the Borrower of the Loan Documents, nor
the consummation of the transactions therein contemplated, nor compliance with
the provisions thereof will, or at the relevant time did, (i) violate any law,
rule, regulation (including Regulations T, U and X), order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its Subsidiaries
or the Borrower's or any Subsidiary's Charter Documents, (ii) violate the
provisions of or require the approval or consent of any indenture, instrument or
agreement to which the Borrower or any of its Subsidiaries is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement, or (iii)
require the consent or approval of any Person, except for any violation of, or
failure to obtain an approval or consent required under, any such indenture,
instrument or agreement that could not reasonably be expected to have a Material
Adverse Effect.
5.4. Governmental Consents. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, any subdivision thereof or any securities exchange is or at
the relevant time was necessary or required to authorize, or is or at the
relevant time was required in connection with the execution, delivery,
consummation or performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents, the application of the proceeds of
the Loans, or the consummation of any other transaction contemplated by the Loan
Documents. Neither the Borrower nor any Subsidiary is in default under or in
violation of any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding upon or applicable to the Borrower or such Subsidiary,
in each case the consequences of which default or violation could reasonably be
expected to have a Material Adverse Effect.
5.5. Financial Statements. The Borrower has heretofore furnished to
each of the Lenders (i) the December 31, 1997 audited consolidated financial
statements of the Borrower and its Subsidiaries, and (ii) the unaudited
consolidated financial statements of the Parent and its subsidiaries through
March 31, 1998 (collectively,
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the "Financial Statements"). Each of the Financial Statements was prepared in
accordance with Agreement Accounting Principles, and such Financial Statements
fairly present the consolidated financial condition and operations of the
Borrower and its Subsidiaries and the Parent and its subsidiaries at such dates
and the consolidated results of their operations for the respective periods then
ended (except, in the case of such unaudited statements, for normal year-end
audit adjustments).
5.6. Material Adverse Change. No material adverse change in the
business, Property, condition (financial or otherwise) or results of operations
of the Borrower or of the Borrower and its Subsidiaries taken as a whole, has
occurred since December 31, 1997.
5.7. Taxes. The Borrower and its Subsidiaries have filed or caused to
be filed on a timely basis and in correct form all tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists. As of the date hereof, there are no
pending audits or investigations regarding the Borrower's or its Subsidiary's
tax returns. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are in accordance with Agreement Accounting Principles or SAP, as
applicable.
5.8. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Loans under this Agreement or the consummation of the transactions
contemplated by this Agreement. Neither the Borrower nor any Subsidiary has any
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.5 other than contingent obligations arising
under any policy of insurance or contract of reinsurance issued or entered into
in the ordinary course of business.
5.9. Capitalization. Schedule 5.9 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and nonassessable. No authorized but unissued or
treasury shares of the Borrower or any Subsidiary are subject to any option,
warrant, right to call or commitment of any kind or character, except (a) as set
forth on Schedule 5.9 and (b) in respect of the Borrower, as set forth in its
Charter Documents. Except as set forth on Schedule 5.9, neither the Borrower nor
any Subsidiary has any outstanding shares or securities convertible into or
exchangeable for any shares, or any right issued to any Person to subscribe for
or to purchase, or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to any of its shares or any shares or
securities convertible into or exchangeable for any of its shares other than as
expressly set forth in the Charter Documents of the Borrower or such Subsidiary.
Neither the Borrower nor any Subsidiary is subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares or any
convertible securities, rights or options of the type described in the preceding
sentence except as otherwise set forth on Schedule 5.9.
5.10. Defaults. No Default or Unmatured Default has occurred and is
continuing.
5.11. Federal Reserve Regulations. Neither the Borrower nor any
Subsidiary is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock.
Neither the making of any Advance
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hereunder nor the use of the proceeds thereof will violate or result in a
violation of the provisions of Regulation T, Regulation U or Regulation X.
Margin Stock constitutes less than 25% of the value of the assets of the
Borrower and its Subsidiaries which are subject to any limitation on sale,
pledge, or other restriction hereunder.
5.12. Investment Company. Neither the Borrower nor any Subsidiary is,
or after giving effect to any Advance will be, an "investment company" or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.13. Certain Fees. No broker's or finder's fee or commission was, is
or will be payable by the Borrower or any Subsidiary with respect to any of the
transactions contemplated by this Agreement. The Borrower hereby agrees to
indemnify the Agent and the Lenders against and agrees that it will hold each of
them harmless from any claim, demand or liability for any broker's or finder's
fees or commissions alleged to have been incurred by the Borrower in connection
with any of the transactions contemplated by this Agreement and any expenses
(including, without limitation, attorneys' fees and time charges of attorneys
for the Agent or any Lender, which attorneys may be employees of the Agent or
any Lender) arising in connection with any such claim, demand or liability.
5.14. Ownership of Properties. Except as set forth on Schedule 5.14, on
the date of this Agreement, the Borrower and its Subsidiaries have good title,
free of all Liens other than those permitted by Section 6.16, to all of the
Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Lenders as owned by the Borrower and its
Subsidiaries. The Borrower and its Subsidiaries own or possess rights to use all
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names necessary to continue to conduct their business as heretofore
conducted, and no such license, patent or trademark has been declared invalid,
been limited by order of any court or by agreement or is the subject of any
infringement, interference or similar proceeding or challenge, except for
proceedings and challenges which could not reasonably be expected to have a
Material Adverse Effect.
5.15. Indebtedness. Attached hereto as Schedule 5.15 is a complete and
correct list of all Indebtedness of the Borrower and its Subsidiaries
outstanding on the date of this Agreement (other than Indebtedness in a
principal amount not exceeding $1,000,000 for a single item of Indebtedness and
$5,000,000 in the aggregate for all such Indebtedness listed), showing the
aggregate principal amount which was outstanding on such date.
5.16. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument (other than insurance policies and
reinsurance agreements entered into in the ordinary course of business) or
subject to any charter or other corporate restriction which could reasonably be
expected to have a Material Adverse Effect . Neither the Borrower nor any
Subsidiary is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (i) any agreement to which
it is a party, which default could reasonably be expected to have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.
5.17. Insurance. The Borrower and its Subsidiaries maintain with
financially sound and reputable insurance companies the insurance on their
Property in such amounts and covering such risks as are consistent with sound
business practice.
5.18. Insurance Licenses. Schedule 5.18 hereto lists all of the
jurisdictions in which the Borrower or any Insurance Subsidiary holds a License
and is authorized to transact insurance business as of the date of this
Agreement. No License held by the Borrower or any Insurance Subsidiary, the loss
of which could reasonably be expected to have a Material Adverse Effect, is the
subject of a proceeding for suspension or revocation. To the Borrower's
knowledge, there is not a sustainable basis for such suspension or revocation,
and no such suspension or revocation has been threatened by any Governmental
Authority. Schedule 5.18 also indicates the line or lines of
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insurance in which each such Insurance Subsidiary is engaged and the
jurisdictions in which such Insurance Subsidiary is licensed to engage in any
line of insurance, in each case as of the date of this Agreement.
5.19. Filing. To ensure the enforceability or admissibility in evidence
of this Agreement and the other Loan Documents in Bermuda, it is not necessary
that this Agreement, any other Loan Document or any other document be filed or
recorded with any court (other than court filings relating to specific
litigation) or other authority in Bermuda or that any stamp or similar tax be
paid to or in respect of this Agreement or the other Loan Documents. The
qualification by the Agent or any Lender for admission to do business under the
laws of Bermuda does not constitute a condition to, and the failure to so
qualify does not affect, the exercise by the Agent or any Lender of any right,
privilege, or remedy afforded to the Agent or any Lender in connection with this
Agreement or any other Loan Document or the enforcement of any such right,
privilege or remedy. The performance by the Agent or any Lender of any action
required or permitted under this Agreement or any other Loan Document will not
violate any law or regulation of Bermuda or any political subdivision thereof or
result in any tax liability or other unfavorable consequence to any such party
pursuant to the laws of Bermuda or any political subdivision or taxing authority
thereof or any rule or regulation of any federation or organization or similar
entity of which Bermuda is a member.
5.20. Year 2000. The Borrower has made a full and complete assessment
of the Year 2000 Issues and has a realistic and achievable program for
remediating the Year 2000 Issues on a timely basis (the "Year 2000 Program").
Based on such assessment and on the Year 2000 Program the Borrower does not
reasonably anticipate that Year 2000 Issues will have a Material Adverse Effect.
5.21. Disclosure. None of the (i) information, exhibits or reports
furnished or to be furnished by the Borrower or any Subsidiary to the Agent or
to any Lender in connection with the negotiation of the Loan Documents, or (ii)
representations or warranties of the Borrower or any Subsidiary contained in
this Agreement, the other Loan Documents or any other document, certificate or
written statement furnished to the Agent or the Lenders by or on behalf of the
Borrower or any Subsidiary for use in connection with the transactions
contemplated by this Agreement contained, contains or will contain any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. There is
no fact known to the Borrower (other than matters of a general economic nature)
that has had or could reasonably be expected to have a Material Adverse Effect
and that has not been disclosed herein or in such other documents, certificates
and statements furnished to the Lenders for use in connection with the
transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, consistently applied,
and will furnish to the Lenders:
(i) As soon as practicable and in any event within 100 days after
the close of each of its Fiscal Years, an unqualified audit
report certified by independent certified public accountants
acceptable to the Lenders, prepared in accordance with
Agreement Accounting Principles on a consolidated and
consolidating basis (consolidating statements need not be
certified by such accountants) for each of (x) the Parent and
its Subsidiaries and (y) the Borrower and its Subsidiaries,
including balance
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sheets as of the end of such period and related statements of
income, shareholders' equity and cash flows, accompanied by
(a) any management letter prepared by said accountants, (b) a
certificate of said accountants for the Borrower that, in the
course of their examination necessary for their certification
of the foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof and (c) a copy of a
written reconciliation between SAP and Agreement Accounting
Principles with respect to such financial statements if such
reconciliation is provided to the insurance regulatory
authority in the jurisdiction of domicile of the Borrower or
any Insurance Subsidiary.
(ii) As soon as practicable, and in any event within 60 days after
the close of each of the first three Fiscal Quarters of each
of its Fiscal Years, for each of (a) the Parent and its
Subsidiaries and (b) the Borrower and its Subsidiaries,
consolidated and consolidating unaudited balance sheets as at
the close of each such period and consolidated and
consolidating statements of income, shareholders' equity and
cash flows for the period from the beginning of such Fiscal
Year to the end of such Fiscal Quarter, all certified by the
chief financial officer of the Parent or the Borrower, as
applicable, as being prepared in accordance with Agreement
Accounting Principles, subject to year-end adjustment.
(iii) Upon the earlier of (1) fifteen days after the regulatory
filing date or (2) 100 days after the close of each of its
Fiscal Years, copies of the audited Annual Statement of the
Borrower that is required to be filed with a Governmental
Authority, certified by the chief financial officer or
treasurer of the Borrower as fairly presenting the financial
condition and results of operations of the Borrower in
accordance with SAP consistently applied throughout the
periods reflected therein.
(iv) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by the chief financial officer of the
Borrower showing the calculations, if any, necessary to
determine compliance with Sections 6.10, 6.11, 6.14 and 6.20
of this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(v) Together with the financial statements required under Sections
6.1(i) and (ii), a certificate of an Authorized Officer of the
Borrower stating that neither the Borrower nor any Subsidiary
has entered into any retrocession agreement for the benefit of
the Borrower with a reinsurer having credit standing that is
not at least comparable to the credit standing of the
Borrower.
(vi) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries.
(vii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Parent, the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission, the National Association of Securities Dealers or
any securities exchange and the Annual Statement.
(viii) Promptly following the receipt thereof, copies of the
executive summary of any independent actuarial opinion
commissioned by the Borrower or any Insurance Subsidiary.
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(ix) Such other non-confidential or non-proprietary information
(including nonfinancial information) relating to the
operations or financial condition of the Borrower as the Agent
or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances to meet the general corporate
needs of the Borrower. The Borrower will not, nor will it permit any Subsidiary
to, use any of the proceeds of the Advances to purchase or carry any "margin
stock" (as defined in Regulation U).
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of (i) the
occurrence of any Default or Unmatured Default, (ii) the occurrence of any other
development (including, without limitation, developments with respect to Year
2000 Issues), relating specifically to the financial condition or operations of
the Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, (iii) the receipt of any notice from any
Governmental Authority of the expiration without renewal, revocation or
suspension of, or the institution of any proceedings to revoke or suspend, any
License now or hereafter held by the Borrower or any Insurance Subsidiary which
is required to conduct insurance business in compliance with all applicable laws
and regulations and the expiration, revocation or suspension of which could
reasonably be expected to have a Material Adverse Effect, (iv) the receipt of
any notice from any Governmental Authority of the institution of any
disciplinary proceedings against or in respect of the Borrower or any Insurance
Subsidiary, or the issuance of any order, the taking of any action or any
request for an extraordinary audit for cause by any Governmental Authority
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect, (v) any judicial or administrative order limiting or controlling
the business of the Borrower or any Subsidiary (and not the industry in which
the Borrower or such Subsidiary is engaged generally) which has been issued or
adopted which could reasonably be expected to have a Material Adverse Effect, or
(vi) the commencement of any litigation in which Borrower or any of its
Subsidiaries is named as a party and which could reasonably be expected to
result in a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, (i) carry on and conduct its business only in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted, (ii) (a) with respect to the Borrower and each Insurance
Subsidiary, only engage in the insurance business or reasonably incidental
activities, and (b) with respect to each other Subsidiary, only engage in other
activities reasonably incidental to the insurance business, all substantially to
the extent in which it is engaged as of the date hereof, (iii) do all things
necessary to remain duly incorporated, validly existing and in good standing in
its jurisdiction of incorporation and its jurisdiction of domicile and maintain
all requisite authority to conduct its business in each other jurisdiction in
which such qualification is required, except where the failure to maintain such
qualification could not reasonably be expected to have a Material Adverse
Effect, and (iv) do all things necessary to renew, extend and continue in effect
all Licenses which may at any time and from time to time be necessary for the
Borrower or any Insurance Subsidiary to operate its business in compliance with
all applicable laws and regulations. Neither Borrower nor any Insurance
Subsidiary shall change its jurisdiction of domicile or incorporation without
the prior written consent of the Required Lenders.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct tax returns required by applicable law and pay
when due all taxes, assessments and governmental charges and levies upon it or
its income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with Agreement Accounting Principles or SAP,
as applicable.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is
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consistent with sound business practice, and the Borrower will furnish to any
Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject.
6.8. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate. The
Borrower will keep or cause to keep, appropriate records and books of account in
which complete entries are to be made reflecting its and their business and
financial transactions, such entries to be made in accordance with Agreement
Accounting Principles or SAP, as applicable, consistently applied.
6.10. Dividends. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, except (i) that any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a WhollyOwned Subsidiary and (ii) the
Borrower may declare and pay dividends on, make distributions in respect of or
repurchase, redeem, retire or otherwise acquire its ordinary shares so long (a)
as no Default or Unmatured Default is pending before or after giving effect to
the declaration or payment of such dividends, distributions, repurchases or
other acquisitions and (b) the aggregate amount of all dividends, distributions,
repurchases or other acquisitions made during any Fiscal Quarter of the Borrower
does not exceed the positive excess, if any, of (1) the positive Consolidated
Borrower Net Income, if any, for the period beginning on March 31, 1998 and
ending on the last day of the then most recently ended Fiscal Quarter over (2)
the aggregate amount of all dividends, distributions, repurchases or other
acquisitions paid or made during such period; provided, that in no event shall
the aggregate amount of all dividends, distributions, repurchases or other
acquisitions made during any Fiscal Quarter of the Borrower exceed the positive
excess, if any, of (x) the positive Consolidated Borrower Net Income, if any,
for the period of the then most recently ended four Fiscal Quarters of the
Borrower over (y) the aggregate amount of all dividends, distributions,
repurchases or other acquisitions paid or made during such period.
6.11. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and described in
Schedule 5.15.
(iii) Indebtedness incurred by the Borrower relating to Letters of
Credit incurred in the ordinary course of business.
(iv) Other Indebtedness at no time exceeding $5,000,000 in
aggregate principal amount.
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6.12. Merger. The Borrower will not, nor will it permit any Subsidiary
to, merge, amalgamate or consolidate with or into any other Person, except that
a Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary of the
Borrower.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(i) Sales of investment assets in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other
than investment assets in the ordinary course of business) as
permitted by this Section during the twelvemonth period ending
with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
6.14. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisitions, except:
(i) Cash Equivalent Investments.
(ii) Investments in debt securities rated A- or better by S&P, A-3
or better by ▇▇▇▇▇'▇ or NAIC-1 or better by the NAIC.
(iii) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof.
(iv) Investments in debt securities not satisfying any of the
standards set forth in clause (ii) above but rated BBB- or
better by S&P, Baa-3 or better by ▇▇▇▇▇'▇ or NAIC-3 or better
by the NAIC; provided, that such Investments do not exceed, in
the aggregate at any one time outstanding, 5% of the combined
Investments of the Borrower and its Subsidiaries.
(v) Investments by the Borrower in equity securities in an
aggregate amount not to exceed 25% of the Consolidated Net
Worth of the Borrower and its Subsidiaries; provided, that no
single Investment in equity securities shall be in an amount
in excess of 5% of the Consolidated Net Worth of the Borrower
and its Subsidiaries.
(vi) Other Investments after the date hereof in an aggregate amount
not to exceed $10,000,000.
6.15. Contingent Obligations. The Borrower will not, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except by endorsement of instruments for deposit or collection in
the ordinary course of business.
6.16. Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
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(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with Agreement
Accounting Principles or SAP, as applicable, shall have been
set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(v) Liens arising out of repurchase obligations and reverse
repurchase obligations in the ordinary course of business.
(vi) Liens existing on the date hereof and described in
Schedule 6.16.
6.17. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) those that exist on the date hereof and
(ii) in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.
6.18. Change in Structure; Fiscal Year. The Borrower will not, nor will
it permit any Subsidiary to, (i) permit any amendment or modification to be made
to its or any Subsidiary's Charter Documents which is materially adverse to the
interests of the Lenders (provided that the Borrower shall notify the Agent of
any other amendment or modification thereto as soon as practicable thereafter)
or (ii) change its or any Subsidiary's Fiscal Year to end on a date other than
December 31 of each year.
6.19. Inconsistent Agreements. The Borrower will not, nor will it
permit any Subsidiary to, enter into any indenture, agreement, instrument or
other arrangement which, (i) directly or indirectly prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations or the amendment of the Loan
Documents, or (ii) contains any provision which would be violated or breached by
the making of Advances or by the performance by the Borrower of any of its
obligations under any Loan Document.
6.20. Financial Covenants.
6.20.1. Leverage Ratio. The Borrower will not permit the
Leverage Ratio to exceed (i) 0.45 to 1.0 at any time during the period
beginning on the date of this Agreement and ending on June 30, 1999, or
(ii) 0.40 to 1.0 at any time after June 30, 1999.
6.20.2. Minimum Consolidated Borrower Net Worth. The Borrower
will at all times maintain Consolidated Borrower Net Worth of not less
than the sum of (i) $400,000,000 plus (ii) the positive excess, if any,
of (a) 50% of the positive Consolidated Borrower Net Income, if any,
earned in each Fiscal Quarter beginning with the Fiscal Quarter ended
June 30, 1998 over (b) the amount of dividends paid by the Borrower
during each such Fiscal Quarter, plus (iii) 50% of the Net Proceeds of
any equity issuance
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(including any capital contribution to surplus of the Borrower in
respect of which no additional shares are issued) by the Borrower after
the date hereof.
6.20.3. Minimum Consolidated Parent Net Worth. The Borrower
will not permit Consolidated Parent Net Worth at any time to be less
than the sum of (i) $400,000,000 plus (ii) the positive excess, if any,
of (a) 50% of the positive Consolidated Parent Net Income, if any,
earned in each Fiscal Quarter beginning with the Fiscal Quarter ended
June 30, 1998 over (b) the aggregate amount of dividends paid by the
Parent during each such Fiscal Quarter, plus (iii) 50% of the Net
Proceeds of any equity issuance (including any capital contributions to
the Parent in respect of which no additional shares are issued) by the
Parent after the date hereof.
6.21. Year 2000. The Borrower will take and cause each of its
Subsidiaries to take such actions as are reasonably necessary to successfully
implement the Year 2000 Program and to assure that Year 2000 Issues will not
have a Material Adverse Effect. At the request of the Agent, the Borrower will
provide a description of the Year 2000 Program, together with any updates or
progress reports with respect thereto.
6.22. Reinsurance. The Borrower will not, nor will it permit any
Subsidiary to, enter into any other (or renew, extend or materially modify any
existing) retrocession arrangements for the benefit of the Borrower except in
the ordinary course of business with reinsurers having credit standing at least
comparable to the credit standing of the Borrower.
6.23. ERISA. The Borrower will not, nor will it permit any Subsidiary
to, maintain, or incur or suffer to exist any liability of any kind (direct or
contingent) to or in respect of, any employee pension plan which is covered by
ERISA.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any Facility Fee or other obligations under any of
the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.3(i), or 6.10 through 6.20.
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement or any Loan Document which is not remedied within
thirty days after written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries or the Parent
to pay when due any Indebtedness aggregating in excess of $1,000,000; or the
default by the Borrower or any of its Subsidiaries or the Parent in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, or any other event shall
occur or condition exist, the effect of which default or event is
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to cause, or to permit the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity; or any Indebtedness of
the Borrower or any of its Subsidiaries or the Parent shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries or the Parent shall not pay, or shall admit
in writing its inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries or the Parent shall (i)
have an order for relief entered with respect to it under any existing or future
law of Bermuda or any other jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under any existing or future law of Bermuda or any
other jurisdiction relating to bankruptcy, insolvency, reorganization or relief
of debtors or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries or the Parent, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Borrower or any of its
Subsidiaries or the Parent or any Substantial Portion of their respective
Properties, or a proceeding described in Section 7.6(iv) shall be instituted
against the Borrower or any of its Subsidiaries or the Parent and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Borrower or any of its Subsidiaries which, when taken
together with all other Property of the Borrower and its Subsidiaries so
condemned, seized, appropriated, or taken custody or control of, during the
twelvemonth period ending with the month in which any such action occurs,
constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $5,000,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. Any Change in Control shall occur.
7.11. Any License of the Borrower or any Insurance Subsidiary (i) shall
be revoked by the Governmental Authority which issued such License, or any
action (administrative or judicial) to revoke such License shall have been
commenced against the Borrower or such Insurance Subsidiary and shall not have
been dismissed within 30 days after the commencement thereof, (ii) shall be
suspended by such Governmental Authority for a period in excess of 30 days, or
(iii) shall not be reissued or renewed by such Governmental Authority upon the
expiration thereof following timely application for such reissuance or renewal
by the Borrower or such Insurance Subsidiary.
7.12. The Borrower or any Insurance Subsidiary shall be the subject of
a final non-appealable order imposing a fine in an amount in excess of
$1,000,000 in any single instance or other such orders imposing fines in excess
of $5,000,000 in the aggregate after the date of this Agreement by or at the
request of any insurance regulatory agency as a result of the violation by the
Borrower or such Insurance Subsidiary of any applicable insurance laws or the
regulations promulgated in connection therewith.
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7.13. The Borrower or any Insurance Subsidiary shall become subject to
(a) any conservation or liquidation order issued by any Governmental Authority
having jurisdiction over insurance companies or (b) any other directive or
mandate issued by any Governmental Authority having jurisdiction over insurance
companies which could reasonably be expected to have a Material Adverse Effect,
which in either case is not stayed within ten (10) days.
7.14 The aggregate principal amount of Indebtedness of the Parent shall
exceed $10,000,000.
7.15 American International Group, Inc. shall cease to own beneficially
and of record, free and clear of all liens, other encumbrances (other than any
encumbrances existing on the date of this Agreement) at least 20% of the
outstanding shares of common stock of the Parent on a fully diluted basis or
shall cease to maintain a voting interest in the Parent of at least 9%.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender and without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives. If any other
Default occurs, the Required Lenders (or the Agent with the consent of the
Required Lenders) may terminate or suspend the obligations of the Lenders to
make Loans hereunder, or declare the Obligations to be due and payable, or both,
whereupon such obligations to make Loans shall immediately be terminated or
suspended, as the case may be, and/or the Obligations shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date, increase the amount of
the Commitment of any Lender hereunder, or permit the Borrower
to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
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No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or an acquiescence therein, and
the making of a Loan notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
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ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties
of the Borrower contained in this Agreement shall survive the making of the
Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof other than the fee letter
described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, which attorneys may be employees of the Agent) paid or incurred
by the Agent or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Agent, the Arranger and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, the Arranger and the Lenders, which attorneys may be employees of
the Agent, the Arranger or the Lenders) paid or incurred by the Agent, the
Arranger or any Lender in connection with the collection and enforcement of the
Loan Documents.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger and each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Agent, the Arranger or any Lender is a party
thereto) which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any
Loan hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.
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9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibilities to the Borrower. Neither the Agent,
the Arranger nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that neither the Agent,
the Arranger nor any Lender shall have liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger nor any Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to ▇▇▇ for, any special, indirect or consequential
damages suffered by the Borrower in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which that Lender is a party, and (vi) permitted by Section 12.4.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
9.13. Disclosure. Each Lender hereby (i) acknowledges and agrees that
First Chicago and/or its Affiliates from time to time may hold other investments
in, make other loans to or have other relationships with the Borrower, and (ii)
waives any liability of First Chicago or such Affiliate to the Borrower or any
Lender, respectively, arising out of or resulting from such investments, loans
or relationships other than liabilities arising out of the gross negligence or
willful misconduct of First Chicago or its Affiliates.
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ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. The First National Bank of
Chicago is hereby appointed by each of the Lenders as its contractual
representative (herein referred to as the "Agent") hereunder and under each
other Loan Document, and each of the Lenders irrevocably authorizes the Agent to
act as the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this Article X. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made by any other Person in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness (other than its own due execution),
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or any guarantor of any of the Obligations
or of any of the Borrower's or any such guarantor's respective Subsidiaries. The
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan
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Document unless it shall be requested in writing to do so by the Required
Lenders. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that no Lender shall be liable for any of the foregoing to
the extent any of the foregoing is found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders under this
Section 10.8 shall survive payment of the Obligations and termination of this
Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
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10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrower or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrower
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Corporate Base Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent's and Arranger's Fees. The Borrower agrees to pay to the
Agent and the Arranger, for their own respective accounts, the fees agreed to
among the Borrower, the Agent and the Arranger, pursuant to that certain letter
agreement dated June 5, 1998, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Documentation Agent. There shall be no rights, obligations or
liabilities afforded to or imposed upon the Documentation Agent by virtue of its
status as such.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. Notwithstanding clause (ii) of this Section, any Lender may
at any time, without the consent of the Borrower or the Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; provided, however, that no such assignment to a Federal Reserve Bank shall
release the transferor Lender from its obligations hereunder. The Agent may
treat the Person which made any Loan or which holds any Note as the owner
thereof for all purposes hereof unless and until such Person complies with
Section 12.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Agent. Any assignee
or transferee of the rights to any Loan or any Note agrees by acceptance of such
transfer or assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder, transferee or assignee
of the rights to such Loan.
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12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the owner of its Loans and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan
Documents, all amounts payable by the Borrower under this Agreement
shall be determined as if such Lender had not sold such participating
interests, and the Borrower and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, extends the
Facility Termination Date or postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or fees on,
any such Loan or Commitment.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit C or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower and the Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or
an Affiliate thereof; provided, however, that if a Default has occurred
and is continuing, the consent of the Borrower shall not be required.
Such consent shall not be unreasonably withheld or delayed. Each such
assignment shall (unless each of the Borrower and the Agent otherwise
consents) be in an amount not less than the lesser of (i) $5,000,000 or
(ii) the remaining amount of the assigning Lender's Commitment
(calculated as at the date of such assignment).
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent
of a notice of assignment, substantially in the form attached as
Exhibit I to Exhibit C (a "Notice of Assignment"), together with any
consents required by Section 12.3.1, and (ii) payment of a $3,500 fee
to the Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and that
the rights and interests of the
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Purchaser in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if it
were an original party hereto, and no further consent or action by the Borrower,
the Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Commitment and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 12.3.2, the transferor Lender, the Agent and the Borrower shall, if
the transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant
to such assignment.
12.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
12.6. Regulation A Security Interests. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Obligations owing to it and any Note or
Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
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ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
15.4. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from the Borrower hereunder in
the currency expressed to be payable herein (the "specified currency") into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main Chicago office on the
Business Day preceding that on which final, non-appealable judgment is given.
The obligations of the Borrower in respect of any sum due to
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any Lender or the Agent hereunder shall, notwithstanding any judgment in a
currency other than the specified currency, be discharged only to the extent
that on the Business Day following receipt by such Lender or the Agent (as the
case may be) of any sum adjudged to be so due in such other currency such Lender
or the Agent (as the case may be) may in accordance with normal, reasonable
banking procedures purchase the specified currency with such other currency. If
the amount of the specified currency so purchased is less than the sum
originally due to such Lender or the Agent, as the case may be, in the specified
currency, the Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify
such Lender or the Agent, as the case may be, against such loss, and if the
amount of the specified currency so purchased exceeds (a) the sum originally due
to any Lender or the Agent, as the case may be, in the specified currency and
(b) any amounts shared with other Lenders as a result of allocations of such
excess as a disproportionate payment to such Lender under Section 11.2, such
Lender or the Agent, as the case may be, agrees to remit such excess to the
Borrower.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
IPCRe LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & Chief Financial Officer
Address: American International Building
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Commitments THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
$42,500,000
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: First Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
48
$42,500,000 CITIBANK, N.A., Individually and as Documentation Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Addresses:
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
FAX: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
$30,000,000 THE BANK OF BERMUDA LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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$30,000,000 BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
$30,000,000 DEUTSCHE BANK AG (New York and Cayman Islands Branches)
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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$30,000,000 FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
CT/M0/0250 Insurance Industry
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
$30,000,000 ROYAL BANK OF CANADA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Manager
Address: ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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$25,000,000 MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Address: One Mellon Bank Center, Room 370
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
$20,000,000 BANK OF MONTREAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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$20,000,000 DRESDNER BANK AG (New York Branch and Grand Cayman Branch)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10005-2889
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Aggregate Commitments: $300,000,000
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PRICING SCHEDULE
APPLICABLE MARGIN LEVEL I STATUS LEVEL II STATUS LEVEL III LEVEL IV STATUS
STATUS
Eurodollar Rate 0.22% 0.25% 0.35% 0.45%
APPLICABLE FEE LEVEL I STATUS LEVEL II STATUS LEVEL III LEVEL IV STATUS
RATE STATUS
Facility Fee 0.08% 0.10% 0.15% 0.20%
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's
S&P Rating is AA- or better.
"Level II Status" exists at any date if, on such date, (i) the Borrower
has not qualified for Level I Status and (ii) the Borrower's S&P Rating is A or
better.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Borrower's S&P Rating is A- or better.
"Level IV Status" exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status or Level III Status.
"S&P Rating" means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower's financial strength and counterparty
credit.
"Status" means either Level I Status, Level II Status, Level III Status
or Level IV Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as determined
from its then-current S&P Ratings. The credit rating in effect on any date for
the purposes of this Schedule is that in effect at the close of business on such
date. If at any time the Borrower has no S&P Rating, Level IV Status shall
exist. The Applicable Margin and the Applicable Fee Rate shall be adjusted upon
any change in the Borrower's S&P Rating. Until so adjusted after the date
hereof, Level II Status shall be deemed to exist.
54
EXHIBIT A
NOTE
$30,000,000.00 June 30, 1998
IPCRe Limited, a Bermuda corporation (the "Borrower"), promises to pay
to the order of BankBoston, N.A. (the "Lender") the lesser of the principal sum
of Thirty Million and no/100 Dollars ($30,000,000.00) or the aggregate unpaid
principal amount of all Loans made by the Lender to the Borrower pursuant to
Article II of the Agreement (as hereinafter defined), in immediately available
funds at the main office of The First National Bank of Chicago in Chicago,
Illinois, as Agent, together with interest on the unpaid principal amount
hereof at the rates and on the dates set forth in the Agreement. The Borrower
shall pay the principal of and accrued and unpaid interest on the Loans in
full on the Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of June 30, 1998 (which, as it
may be amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Borrower, the lenders party thereto, including the
Lender, and The First National Bank of Chicago, as Agent, to which Agreement
reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Agreement.
IPCRe LIMITED
By:___________________________
Print Name:___________________
Title:________________________
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SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF IPCRe LIMITED,
DATED JUNE 30, 1998
Principal Amount Maturity of Principal
Date of Loan Interest Period Amount Paid Unpaid Balance
---- ---------------- --------------- ----------- --------------
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EXHIBIT B
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of June 30, 1998 (as amended, modified, renewed or
extended from time to time, the "Agreement") among IPCRe Limited (the
"Borrower"), the lenders party thereto and The First National Bank of Chicago,
as Agent for the Lenders. Unless otherwise defined herein, capitalized terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected______________of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
____________________________________________
____________________________________________
____________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day
of_____,_____.
___________________________________
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SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of Sections 6.10, 6.11, 6.14 and 6.20 of
the Agreement
Section 6.10 - Dividends
Period: Fiscal Quarter ended _______________, _____
1. Actual:
(a) Dividends, distributions, repurchases
and other acquisitions paid during Fiscal Quarter ended on
date of determination: $_________
2. Permitted:
(a) Positive Consolidated Borrower Net Income from
March 31, 1998 through Fiscal Quarter ended
on date of determination: $_________
(b) Aggregate amount of dividends, distributions, repurchases or
other acquisitions paid or made from March 31, 1998 through
Fiscal Quarter ended on date of determination: $_________
(c) (b) minus (a): $_________
(d) Positive Consolidated Borrower Net Income for
four Fiscal Quarters immediately prior to Fiscal Quarter
ended on date of determination: $_________
(e) Aggregate amount of dividends, distributions, repurchases or
other acquisitions paid or made during four Fiscal Quarters
immediately prior to Fiscal Quarter ended on
date of determination: $_________
(f) (e) minus (d): $_________
(g) Lesser of (c) and (f): $_________
Section 6.11 - Indebtedness
1. Clause (iv)
(a) Aggregate principal amount of Indebtedness permitted: $5,000,000
(b) Aggregate principal amount of Indebtedness
outstanding on date of determination: $_________
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Section 6.14 - Investments and Acquisitions
1. Clause (iv)
(a) Actual:
(i) Investments in debt securities not rated A- or better by
S&P, A-3 or better by ▇▇▇▇▇'▇ or NAIC-1 or better by the
NAIC but rated BBB- or better by S&P, Baa-3 or better by
▇▇▇▇▇'▇ or NAIC-3
or better by the NAIC on the date of determination: $_________
(b) Required:
(i) Combined Investments of the Borrower
and its Subsidiaries on the date of determination: $_________
(ii) 5% of (b)(i): $_________
2. Clause (v)
(a) Aggregate Investments:
(i) Actual:
(A) Investments by the Borrower in equity
securities on the date of determination: $_________
(ii) Required:
(A) Consolidated Net Worth of the Borrower
and its Subsidiaries on the date of determination: $_________
(B) 25% of (i)(A): $_________
(b) Individual Investments:
(i) Actual:
(A) Largest single investment by the Borrower
in equity securities on the date of determination: $_________
(ii) Required:
(A) Consolidated Net Worth of the Borrower
and its Subsidiaries on the date of determination: $_________
(B) 5% of (i)(A): $_________
3. Clause (vi)
B-6
59
(a) Actual:
(i) Aggregate principal amount of other Investments
permitted: $10,000,000
(b) Other Investments on date of determination: $_________
Section 6.20.1 - Leverage Ratio
1. Required: ____:1.0
2. Actual:
(a) Consolidated Indebtedness of the Borrower and its Subsidiaries
(excluding Letter of Credit obligations incurred in the
ordinary course of business) on date of determination: $_________
(b) Consolidated Borrower Net Worth on date of
determination: $_________
(c) (a) plus (b): $_________
(d) Ratio of (a) to (c): ____:1.0
B-7
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Section 6.20.2 - Minimum Consolidated Borrower Net Worth
Period: Fiscal Quarter ended _______________, _____
1. Required:
(a) Positive Consolidated Borrower Net Income earned in
each Fiscal Quarter from Fiscal Quarter ended
June 30, 1998 through Fiscal Quarter
ended on date of determination: $_________
(b) 50% of (a): $_________
(c) Dividends paid by the Borrower during each Fiscal Quarter from
Fiscal Quarter ended June 30, 1998 through Fiscal Quarter
ended on date of determination: $_________
(d) Net Proceeds of any equity issuance by the Borrower after the
closing date (including any capital contribution to surplus of
the Borrower in respect of which no additional shares are issued): $_________
(e) 50% of (d): $_________
(f) (b) minus (c): $_________
(g) $400,000,000 plus (e) plus (f): $_________
2. Actual Consolidated Borrower Net Worth (excluding the effect
of unrealized gain or loss under FAS 115): $_________
Section 6.20.3 - Minimum Consolidated Parent Net Worth
Period: Fiscal Quarter ended _______________, _____
1. Required:
(a) Positive Consolidated Parent Net Income earned in
each Fiscal Quarter from Fiscal Quarter ended
June 30, 1998 through Fiscal Quarter
ended on date of determination: $_________
(b) 50% of (a): $_________
(c) Dividends paid by the Parent during each Fiscal Quarter from
Fiscal Quarter ended June 30, 1998 through Fiscal Quarter
ended on date of determination: $_________
(d) Net Proceeds of any equity issuance by the Parent after the
closing date (including any capital contribution to surplus of
the Parent in respect of which no
B-8
61
additional shares are issued): $_________
(e) 50% of (d): $_________
(f) (b) minus (c): $_________
(g) $400,000,000 plus (e) plus (f): $_________
2. Actual Consolidated Parent Net Worth (excluding the effect
of unrealized gain or loss under FAS 115): $_________
B-9
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EXHIBIT C
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement")
between______________________ (the "Assignor") and ________________ (the
"Assignee") is dated as of ___________________ ,____________ . The parties
hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the loans listed in Item 3 of Schedule 1
and the other Loan Documents. The aggregate Commitment (or Loans, if the
applicable Commitment has been terminated) purchased by the Assignee hereunder
is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit I attached hereto has
been delivered to the Agent. Such Notice of Assignment must include any consents
required to be delivered to the Agent by Section 12.3.1 of the Credit Agreement.
In no event will the Effective Date occur if the payments required to be made by
the Assignee to the Assignor on the Effective Date under Sections 4 and 5 hereof
are not made on the proposed Effective Date or if any other condition precedent
agreed to by the Assignor and the Assignee has not been satisfied. The Assignor
will notify the Assignee of the proposed Effective Date no later than the
Business Day prior to the proposed Effective Date. As of the Effective Date, (i)
the Assignee shall have the rights and obligations of a Lender under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit it to the other party
hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest or Facility Fees is
made under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or Facility Fees for the
period prior to the Effective Date) or, in the case of Eurodollar Loans, the
Payment Date, which the Assignee is obligated to deliver to the Assignor
pursuant to Section 4 hereof. The amount of such fee shall be the difference
between (i) the interest or fee, as applicable, paid with respect to the
amounts assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was __ of 1% less than the
interest rate paid by the Borrower or if the commitment fee was __ of 1% less
than the commitment fee paid by the Borrower, as applicable. In addition, the
Assignee agrees to pay the $3,500 processing fee required to be paid to the
Agent in connection with this Assignment Agreement.
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6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan, (ii) any representation,
warranty or statement made in any Loan Document or in connection with any Loan,
(iii) the financial condition or creditworthiness of the Borrower or any
guarantor, (iv) the performance of or compliance with any of the terms or
provisions of any of the Loan Documents, (v) inspecting any of the Property,
books or records of the Borrower, (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
C-2
64
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information at it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender, (v) agrees that
its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vi) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
[and (vii) attaches the forms prescribed by the Internal Revenue Service of the
United States certifying that the Assignee is entitled to receive payments under
the Loan Documents without deduction or withholding of any United States federal
income taxes].
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.]
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 12.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:________________________
Title:_____________________
Address:___________________
___________________
___________________
[NAME OF ASSIGNEE]
By:________________________
Title:_____________________
Address:___________________
___________________
___________________
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SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement:
That certain Credit Agreement, dated as of June 30, 1998, among IPCRe
Limited, the financial institutions named therein and The First
National Bank of Chicago, as agent.
2. Date of Assignment Agreement: _____________, 19
3. Amounts (As of Date of Item 2 above):
(a) Aggregate Commitment
(Total Loans)* under
Credit Agreement: $_________
(b) Assignee's Percentage
of the (Total Loans)* Aggregate
Commitment Purchased under the
Assignment Agreement: _________%
4. Assignee's (Loan
Amount)* Commitment
purchased hereunder: $________
5. Proposed Effective Date: ______________, __
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:_______________ By:_______________
Title:____________ Title:____________
* If the Aggregate Commitment has been terminated, insert outstanding Loans
in place of Aggregate Commitment
** Percentage taken to 10 decimal places
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ATTACHMENT TO SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
CONTACT:
Name:__________________ Telephone No.:________________
Fax No.:_______________ Telex No.:____________________
Answerback:___________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:___________________________________________
Account Name & Number for Wire Transfer:________________________________________
Other Instructions:___________________________________________
ADDRESS FOR NOTICES FOR ASSIGNEE:___________________________________________
ASSIGNEE INFORMATION
CREDIT CONTACT:
Name:__________________ Telephone No.:________________
Fax No.:_______________ Telex No.:____________________
Answerback:___________________
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KEY OPERATIONS CONTACTS:
Booking Installation:_____________ Booking Installation:_____________
Name:_____________________________ Name:_____________________________
Telephone No.:____________________ Telephone No.:____________________
Fax No.:__________________________ Fax No.:__________________________
Telex No.:________________________ Telex No.:________________________
Answerback:_______________________ Answerback:_______________________
PAYMENT INFORMATION:
Name & ABA # of Destination Bank:____________________________________________
Account Name & Number for Wire Transfer:_____________________________________
Other Instructions:__________________________________________________________
ADDRESS FOR NOTICES FOR ASSIGNOR:____________________________________________
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FNBC INFORMATION
Assignee will be called promptly upon receipt of the signed agreement.
INITIAL FUNDING CONTACT: SUBSEQUENT OPERATIONS CONTACT:
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
INITIAL FUNDING STANDARDS:
Libor - Fund 2 days after rates are set.
FNBC WIRE INSTRUCTIONS: The First National Bank
of Chicago, ABA # ▇▇▇▇▇▇▇▇▇ BNF =
7521-7653/DES, Ref:
ADDRESS FOR NOTICES FOR FNBC: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Agency/Compliance Division, Suite 0353
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇ or (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT I
TO ASSIGNMENT AGREEMENT
NOTICE
OF ASSIGNMENT
__________,____
To: IPCRe Limited
American International ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇
Bermuda
The First National Bank of Chicago, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
the Borrower and the Agent pursuant to Section 12.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of __________, ____ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections 12.3.1 and 12.3.2 of
the Credit Agreement have been delivered to the Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.
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5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by Section 12.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacement notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Borrower
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Borrower or the
Loan Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:______________ By:______________
Title:___________ Title:___________
ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK BY IPCRe LIMITED
OF CHICAGO, as Agent
By:______________ By:______________
Title:___________ Title:___________
[Attach photocopy of Schedule 1 to Assignment]
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EXHIBIT D
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below
Re: Credit Agreement, dated as of June 30, 1998 (as the same may be amended
or modified, the "Credit Agreement"), among IPCRe Limited (the
"Borrower"), the Lenders named therein and the Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Borrower,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Borrower in accordance with Section 13.1 of the
Credit Agreement or based on any telephonic notice made in accordance with
Section 2.14 of the Credit Agreement.
Facility Identification Number(s)_____________________________________________
Customer/Account Name_________________________________________________________
Transfer Funds To_____________________________________________________________
______________________________________________________________________________
For Account No._______________________________________________________________
Reference/Attention To________________________________________________________
Authorized Officer (Customer Representative) Date____________
(Please Print) Signature
Bank Officer Name Date____________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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SCHEDULE 5.9
Capitalization
Subsidiaries
None
74
SCHEDULE 5.14
Owned Properties
None
75
SCHEDULE 5.15
Indebtedness
$20,000,000 facility pursuant to the Insurance Letters of Credit - Master
Agreement, dated 14th April, 1994 (the "LoC Agreement"), by and between
International Property Catastrophic Reinsurance Company, Ltd. and Citibank, N.A.
$5,358,585 is currently outstanding pursuant to Letters of Credit issued
pursuant to the LoC Agreement.
76
SCHEDULE 5.18
Insurance Licenses
IPCRe Limited is registered as a Class 4 Insurer, pursuant to Section 4 of The
Insurance Act 1978 (as amended) ("the Act") of the Islands of Bermuda. Such
registration permits the writing of all classes of insurance, with the exception
of "long-term business", as such expression is understood in the Act. "Long-term
business", under the Act, includes effecting and carrying out certain contracts
of insurance or reinsurance on human life, health and accident and contracts to
pay annuities on human life.
77
SCHEDULE 6.16
Liens
1. Charge over (i) monies hereafter deposited with Citibank, N.A.'s branch at
336 Strand in London pursuant to the Reinsurance Deposit Agreement (Charge
Form), dated 14th April, 1994, executed by International Property Catastrophe
Reinsurance Company, Ltd. ("IPCRe") in favour of Citibank, N.A. (the "Deposit
Agreement"), (ii) accounts opened with Citibank, N.A. pursuant to Clauses 3(c)
and 11(b)-(c) of the Deposit Agreement, and (iii) any replacement deposits and
bank accounts as described in Clause 13 of the Deposit Agreement.
2. Charge over all of IPCRe's right, title and interest in and to: (i) all
securities held by the Custodian or by any clearance system for the account of
the Custodian, (ii) all rights, benefits and proceeds attaching to or arising
from or in respect of the securities referred to in (i), (iii) all sums of money
standing to the credit of any account opened or maintained by the Custodian (or
any clearing system under the Custodian's direction or control) for IPCRe, and
(iv) any of the foregoing at any time delivered, transferred or assigned by the
custodian to Citibank, N.A., all pursuant to the Security Agreement (Portfolio -
Third Party Custodian) by and between IPCRe and AIG Trust Services Limited, as
Custodian, in favour of Citibank, N.A., dated September 20, 1994.