Exhibit 10.33
FORM OF
PARENT GUARANTY
THIS PARENT GUARANTY, dated as of the 24th day of February, 2000
(this "Guaranty"), is made by EVEREST RE GROUP, LTD., a Bermuda corporation (the
"Guarantor"), in favor of the Guaranteed Parties (as hereinafter defined).
Capitalized terms used herein without definition shall have the meanings given
to them in the Credit Agreement referred to below.
RECITALS
A. Everest Reinsurance Holdings, Inc., a Delaware corporation (the
"Borrower"), certain banks and other financial institutions (collectively, the
"Lenders"), and First Union National Bank, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"), are parties to a Credit
Agreement, dated as of December 21, 1999 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), providing for the availability of
certain credit facilities to the Borrower upon the terms and conditions set
forth therein. The Guarantor owns all of the issued and outstanding capital
stock of the Borrower. Unless otherwise defined herein, capitalized terms used
herein without definition shall have the meaning given to them in the Credit
Agreement.
B. It is a condition to the approval by the Lenders of the Restructuring,
and the application of certain exceptions to restrictive covenants applicable to
the Borrower and its Subsidiaries set forth in the Credit Agreement, that the
Guarantor shall have agreed, by executing and delivering this Guaranty, to
guarantee to the Guaranteed Parties the payment in full of the Guaranteed
Obligations (as hereinafter defined). The Guaranteed Parties are relying on this
Guaranty in their decision to approve the Restructuring, permit the
aforementioned exceptions, and thereby continue the extension of credit to the
Borrower under the terms of the Credit Agreement, and would not continue and
maintain the credit facility under the terms of the Credit Agreement upon the
terms as presented without this Guaranty.
C. The Guarantor will obtain benefits as a result of the extension of
credit to the Borrower under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desires to execute and deliver this Guaranty.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, to induce the
Guaranteed Parties to continue the extension of credit to the Borrower under the
terms of the Credit Agreement, the Guarantor hereby agrees as follows:
1. GUARANTY. (a) The Guarantor hereby irrevocably, absolutely and
unconditionally:
(i) guarantees (a) to the Lenders and the Administrative Agent
(collectively, the "Guaranteed Parties") the full and prompt payment, at
any time and from time to time as and when due (whether at the stated
maturity, by acceleration or otherwise), of all Obligations of the Borrower
under the Credit Agreement and the other Credit Documents, including,
without limitation, all principal of and interest on the Loans, all fees,
expenses, indemnities and other amounts payable by the Borrower under the
Credit Agreement or any other Credit Document (including interest accruing
after the filing of a petition or commencement of a case by or with respect
to the Borrower seeking relief under any applicable federal and state laws
pertaining to bankruptcy, reorganization, arrangement, moratorium,
readjustment of debts, dissolution, liquidation or other debtor relief,
specifically including, without limitation, the Bankruptcy Code and any
fraudulent transfer and fraudulent conveyance laws (collectively,
"Insolvency Laws"), whether or not the claim for such interest is allowed
in such proceeding), and all Obligations that, but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, would become
due, and (b) to each applicable Lender in its capacity as a counterparty to
any Hedge Agreement with the Borrower required or permitted under the
Credit Agreement, all obligations of the Borrower under such Hedge
Agreement, in each case under (a) and (b) whether now existing or hereafter
created or arising and whether direct or indirect, absolute or contingent,
due or to become due (all liabilities and obligations described in this
clause (i), collectively, the "Guaranteed Obligations"); and
(ii) agrees to pay or reimburse upon demand all reasonable and
documented costs and expenses (including, without limitation, reasonable
and documented attorneys' fees and expenses) incurred or paid by (y) any
Guaranteed Party in connection with any suit, action or proceeding to
enforce or protect any rights of the Guaranteed Parties hereunder and (z)
the Administrative Agent in connection with any amendment, modification or
waiver hereof or consent pursuant hereto, and to indemnify and hold each
Guaranteed Party and its directors, officers, employees, agents and
Affiliates harmless from and against any and all claims, losses, damages,
obligations, liabilities, penalties, costs and expenses (including, without
limitation, reasonable and documented attorneys' fees and expenses) of any
kind or nature whatsoever, whether direct, indirect or consequential, that
may at any time be imposed on, incurred by or asserted against any such
indemnified party as a result of, arising from or in any way relating to
this Guaranty or the collection or enforcement of the Guaranteed
Obligations; PROVIDED, HOWEVER, that no indemnified party shall have the
right to be indemnified hereunder for any such claims, losses, costs and
expenses to the extent resulting from the gross negligence or willful
misconduct of such indemnified party (all liabilities and obligations
described in this clause (ii), collectively, the "Other Obligations"; and
the Other Obligations, together with the Guaranteed Obligations, the "Total
Obligations").
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(b) The guaranty of the Guarantor set forth in this Section is a guaranty
of payment as a primary obligor, and not a guaranty of collection.
2. GUARANTY ABSOLUTE. The Guarantor agrees that its obligations hereunder
are irrevocable, absolute and unconditional, are independent of the Guaranteed
Obligations and other security therefor or other guaranty or liability in
respect thereof, whether given by the Guarantor or any other Person, and shall
not be discharged, limited or otherwise affected by reason of any of the
following, whether or not the Guarantor has notice or knowledge thereof:
(i) any change in the time, manner or place of payment of, or in any
other term of, any Guaranteed Obligations or any guaranty or other
liability in respect thereof, or any amendment, modification or supplement
to, restatement of, or consent to any rescission or waiver of or departure
from, any provisions of the Credit Agreement, any other Credit Document
or any agreement or instrument delivered pursuant to any of the
foregoing;
(ii) the invalidity or unenforceability of any Guaranteed Obligations,
any guaranty or other liability in respect thereof or any provisions of the
Credit Agreement, any other Credit Document or any agreement or
instrument delivered pursuant to any of the foregoing;
(iii) the taking, acceptance or release of other guarantees of any
Guaranteed Obligations or other security for any Guaranteed Obligations or
for any guaranty or other liability in respect thereof;
(iv) any discharge, modification, settlement, compromise or other
action in respect of any Guaranteed Obligations or any guaranty or
other liability in respect thereof, including any acceptance or refusal
of any offer or performance with respect to the same or the subordination
of the same to the payment of any other obligations;
(v) any agreement not to pursue or enforce or any failure to pursue
or enforce (whether voluntarily or involuntarily as a result of operation
of law, court order or otherwise) any right or remedy in respect of any
Guaranteed Obligations, any guaranty or other liability in respect
thereof or any other security for any of the foregoing; or any sale,
exchange, release, substitution, compromise or other action in respect of
any other security;
(vi) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change
in the corporate structure or existence of the Borrower or any other
Person directly or indirectly liable for any Guaranteed Obligations;
vii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and
howsoever realized, whether in reduction of any Guaranteed
Obligations or any other obligations of the Borrower or any
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other Person directly or indirectly liable for any Guaranteed Obligations,
regardless of what Guaranteed Obligations may remain unpaid after any such
application; or
(viii) any other circumstance that might otherwise constitute a legal
or equitable discharge of, or a defense, set-off or counterclaim available
to, the Borrower, the Guarantor or a surety or guarantor generally,
other than the occurrence of all of the following: (x) the payment in
full of the Total Obligations, (y) the termination of the Commitments
under the Credit Agreement, and (z) the termination of, and settlement
of all obligations of the Borrower under, each Hedge Agreement to which
the Borrower and any Lender are parties (the events in clauses (x), (y)
and (z) above, collectively, the "Termination Requirements").
3. CERTAIN WAIVERS. The Guarantor hereby knowingly, voluntarily and
expressly waives:
(i) presentment, demand for payment, demand for performance, protest
and notice of any other kind, including, without limitation, notice of
nonpayment or other nonperformance (including notice of default under
any Credit Document with respect to any Guaranteed Obligations),
protest, dishonor, acceptance hereof, extension of additional credit to
the Borrower and of any of the matters referred to in Section 2 and of
any rights to consent thereto;
(ii) any right to require the Guaranteed Parties or any of them, as a
condition of payment or performance by the Guarantor hereunder, to proceed
against, or to exhaust or have resort to any security from or any deposit
balance or other credit in favor of, the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations, or to pursue
any other remedy or enforce any other right; and any other defense based on
an election of remedies with respect to any security for any Guaranteed
Obligations or for any guaranty or other liability in respect thereof,
notwithstanding that any such election (including any failure to pursue or
enforce any rights or remedies) may impair or extinguish any right of
indemnification, contribution, reimbursement or subrogation or other right
or remedy of the Guarantor against the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations or any such
Collateral or other security; and, without limiting the generality of the
foregoing, the Guarantor hereby specifically waives the benefits of
Sections 26-7 through 26-9, inclusive, of the General Statutes of North
Carolina, as amended from time to time, and any similar statute or law of
any other jurisdiction, as the same may be amended from time to time;
(iii) any right or defense based on or arising by reason of any right
or defense of the Borrower or any other Person, including, without
limitation, any defense based on or arising from a lack of authority or
other disability of the Borrower or any other Person, the invalidity or
unenforceability of any Guaranteed Obligations, or any Credit Document
or other agreement or instrument delivered pursuant thereto, or the
cessation of the liability of the Borrower for any reason other than
the satisfaction of the Termination Requirements;
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(iv) any defense based on any Guaranteed Party's acts or omissions in
the administration of the Guaranteed Obligations, and any guaranty or other
liability in respect thereof;
(v) any right to assert against any Guaranteed Party, as a defense,
counterclaim, crossclaim or set-off, any defense, counterclaim, claim,
right of recoupment or set-off that it may at any time have against any
Guaranteed Party (including, without limitation, failure of consideration,
statute of limitations, payment, accord and satisfaction and usury), other
than compulsory counterclaims; and
(vi) any defense based on or afforded by any applicable law that limits
the liability of or exonerates guarantors or sureties or that may in any
other way conflict with the terms of this Guaranty.
4. STANDSTILL ON SUBROGATION; SUBORDINATION. Notwithstanding any payment or
payments made by the Guarantor hereunder, or any set-off or application of funds
of the Guarantor by the Administrative Agent or any Lender, the Guarantor shall
not be entitled to be subrogated to any of the rights of the Administrative
Agent or any Lender against the Borrower or against any collateral or other
security or guarantee or right of offset held by the Administrative Agent or any
Lender for the payment of the Guaranteed Obligations, nor shall the Guarantor
seek or be entitled to seek any contribution or reimbursement from the Borrower
in respect of payments made by the Guarantor hereunder, until all amounts owing
to the Administrative Agent and the Lenders by the Borrower on account of the
Guaranteed Obligations are paid in full and the Commitments have been
terminated. The Guarantor agrees that all indebtedness and other obligations,
whether now or hereafter existing, of the Borrower or any Subsidiary of the
Borrower to the Guarantor, including, without limitation, any such indebtedness
in any proceeding under the Bankruptcy Code and any intercompany receivables,
together with any interest thereon, shall be, and hereby are, subordinated and
made junior in right of payment to the Total Obligations. The Guarantor further
agrees that if any amount shall be paid to or any distribution received by the
Guarantor (i) on account of any such indebtedness at any time after the
occurrence and during the continuance of an Event of Default, or (ii) on account
of any such rights of subrogation, indemnity, contribution or reimbursement at
any time prior to the satisfaction of the Termination Requirements, such amount
or distribution shall be deemed to have been received and to be held in trust
for the benefit of the Guaranteed Parties, and shall forthwith be delivered to
the Administrative Agent in the form received (with any necessary endorsements
in the case of written instruments), to be applied against the Guaranteed
Obligations, whether or not matured, in accordance with the terms of the
applicable Credit Documents and without in any way discharging, limiting or
otherwise affecting the liability of the Guarantor under any other provision of
this Guaranty.
5. COVENANTS. The Guarantor covenants and agrees that, until the
termination of the Commitments, and the payment in full of all principal and
interest with respect to the Loans together with all other amounts then due and
owing under the Credit Agreement:
(a) The Guarantor will deliver (or will cause to be delivered) to each
Lender:
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(i) As soon as available and in any event within fifty-five (55) days
after the end of each of the first three fiscal quarters of each fiscal
year, beginning with the fiscal quarter ending March 31, 2000, unaudited
consolidated and, to the extent otherwise prepared for external
distribution, consolidating balance sheets of the Guarantor and its
Subsidiaries as of the end of such fiscal quarter and unaudited
consolidated and, to the extent otherwise prepared for external
distribution, consolidating statements of income, stockholders' equity and
cash flows for the Guarantor and its Subsidiaries for the fiscal quarter
then ended and for that portion of the fiscal year then ended, in each case
setting forth comparative consolidated or consolidating figures as of the
end of and for the corresponding period in the preceding fiscal year, all
prepared in accordance with GAAP (subject to the absence of notes
required by GAAP and subject to normal year-end audit adjustments) applied
on a basis consistent with that of the preceding quarter or containing
disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such quarter;
(ii) As soon as available and in any event within 120 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
2000, (i) an audited consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of such fiscal year and audited consolidated
statements of income, stockholders' equity and cash flows for the Guarantor
and its Subsidiaries for the fiscal year then ended, including the
applicable notes, in each case setting forth comparative figures as of the
end of and for the preceding fiscal year, certified by the independent
certified public accounting firm regularly retained by the Guarantor or
another independent certified public accounting firm of recognized national
standing, together with (y) a report thereon by such accountants that is
not qualified as to going concern or scope of audit and to the effect that
such financial statements present fairly the consolidated financial
condition and results of operations of the Guarantor and its Subsidiaries
as of the dates and for the periods indicated in accordance with GAAP
applied on a basis consistent with that of the preceding year or containing
disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such year, and (z) a report by such accountants to the
effect that, based on and in connection with their examination of the
financial statements of the Guarantor and its Subsidiaries, they obtained
no knowledge of the occurrence or existence of any Default or Event of
Default relating to accounting or financial reporting matters, or a
statement specifying the nature and period of existence of any such Default
or Event of Default disclosed by their audit; provided, however, that such
accountants shall not be liable by reason of the failure to obtain
knowledge of any Default or Event of Default that would not be disclosed or
revealed in the course of their audit examination, and (ii) to the extent
otherwise prepared, an unaudited consolidating balance sheet of the
Guarantor and its Subsidiaries as of the end of such fiscal year and
unaudited consolidating statements of income, stockholders' equity and cash
flows for the Guarantor and its Subsidiaries for the fiscal year then
ended, all in reasonable detail;
(iii) As soon as available and in any event within fifty-
five (55) days after the end of each of the first three
fiscal quarters of each fiscal year (or, in the case of Everest
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Insurance Company of Canada and Everest Bermuda, within fifteen (15) days
after the required filing date), beginning with the fiscal quarter ending
March 31, 2000, a Quarterly Statement of each of its Insurance Subsidiaries
as of the end of such fiscal quarter and for that portion of the fiscal
year then ended, in the form filed with the relevant Insurance Regulatory
Authority, prepared in accordance with SAP applied on a basis consistent
with that of the preceding quarter or containing disclosure of the effect
on the financial condition or results of operations of any change in the
application of accounting principles and practices during such quarter;
(iv) As soon as available and in any event within seventy-five (75)
days after the end of each fiscal year (or, in the case of Everest
Insurance Company of Canada and Everest Bermuda, within fifteen (15) days
after the required filing date), beginning with the fiscal year ending
December 31, 2000, an Annual Statement of each of its Insurance
Subsidiaries as of the end of such fiscal year and for the fiscal year then
ended, in the form filed with the relevant Insurance Regulatory Authority,
prepared in accordance with SAP applied on a basis consistent with that of
the preceding year or containing disclosure of the effect on the financial
condition or results of operations of any change in the application of
accounting principles and practices during such year;
(v) As soon as available and in any event within 135 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
2000, an unaudited consolidated balance sheet of the Guarantor and its
Insurance Subsidiaries (excluding Everest Insurance Company of Canada and
Everest Bermuda) as of the end of such fiscal year and unaudited
consolidated statements of income, stockholders' equity and cash flows for
the Guarantor and its Insurance Subsidiaries for the fiscal year then
ended, in each case setting forth comparative consolidated figures as of
the end of and for the preceding fiscal year, all prepared in accordance
with SAP applied on a basis consistent with that of the preceding year or
containing disclosure of the effect on the financial condition or results
of operations of any change in the application of accounting principles and
practices during such year;
(vi) As soon as available and in any event within 165 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
2000 (but only if and to the extent required by the applicable Insurance
Regulatory Authority with regard to any Insurance Subsidiary), a
certification by the independent certified public accounting firm referred
to in clause (ii) as to the Annual Statement of each such Insurance
Subsidiary as of the end of such fiscal year and for the fiscal year then
ended, together with a report thereon by such accountants that is not
qualified as to going concern or scope of audit and to the effect that such
financial statements present fairly the consolidated financial condition
and results of operations of such Insurance Subsidiary as of the date and
for the period indicated in accordance with SAP applied on a basis
consistent with that of the preceding year or containing disclosure of the
effect on the financial position or results of operations of any change in
the application of accounting principles and practices during such year;
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(vii) Concurrently with each delivery of the financial statements
described in clauses (i) through (iv), a Compliance Certificate in the
form of Exhibit C-1 to the Credit Agreement with respect to the period
covered by the financial statements then being delivered, executed by the
chief financial officer, comptroller or treasurer of the Guarantor,
together with a Covenant Compliance Worksheet reflecting the computation
of the financial covenants set forth in such Covenant Compliance Worksheet
as of the last day of the period covered by such financial statements;
(viii) As soon as available and in any event prior to the end of each
fiscal year, beginning with the fiscal year ending December 31, 2000, a
complete set of projections for Guarantor and its Subsidiaries for each
of the succeeding fiscal years remaining through the Maturity Date,
consisting of consolidated balance sheets and income statements
prepared based on GAAP principles, and
(ix) Promptly upon the sending, filing or receipt thereof, copies of
(i) all financial statements, reports, notices and proxy statements that
the Guarantor or any of its Subsidiaries shall send or make available
generally to its shareholders, (ii) all reports (other than earnings press
releases) on Form 10-Q, Form 10-K or Form 8-K (or their successor forms) or
registration statements and prospectuses (other than on Form S-8 or its
successor form) that the Guarantor or any of its Subsidiaries shall render
to or file with the Securities and Exchange Commission, the National
Association of Securities Dealers, Inc. or any national securities
exchange, (iii) all reports on Form A (or any successor form) that any
Insurance Subsidiary shall file with any Insurance Regulatory Authority,
(iv) all material reports on examination or similar material reports,
financial examination reports or market conduct examination reports by the
NAIC or any Insurance Regulatory Authority or other Governmental Authority
with respect to any Insurance Subsidiary's insurance business, and (v) all
material filings made under applicable state insurance holding company acts
by the Guarantor or any of its Subsidiaries, including, without limitation,
filings seeking approval of transactions with Affiliates.
(b) The Guarantor will (i) maintain and preserve in full force and effect
its corporate existence and (ii) obtain, maintain and preserve in full force and
effect all other rights, franchises, licenses, permits, certifications,
approvals and authorizations required by Governmental Authorities and necessary
to the ownership, occupation or use of its properties or the conduct of its
business, except to the extent the failure to do so would not be reasonably
likely to have a Material Adverse Effect.
(c) The Guarantor will comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent the failure so to comply would
not have, or be reasonably likely to have, a Material Adverse Effect.
(d) The Guarantor will pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it, upon its income or profits
or upon any of its properties, prior to the date on which penalties
would attach thereto, and all lawful claims that, if unpaid, might
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become a Lien upon any of the properties of the Guarantor; provided, however,
that the Guarantor shall not be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings and as to which the Guarantor is maintaining adequate reserves with
respect thereto in accordance with GAAP.
(e) The Guarantor will (i) maintain adequate books, accounts and records,
in which full, true and correct entries shall be made of all financial
transactions in relation to its business and properties, and prepare all
financial statements required under this Guaranty, in each case in accordance
with GAAP or SAP, as applicable, and in compliance with the requirements of any
Governmental Authority having jurisdiction over it, and (ii) permit employees or
agents of the Administrative Agent or any Lender to inspect its properties and
examine or audit its books, records, working papers and accounts and make copies
and memoranda of them, and to discuss its affairs, finances and accounts with
its officers and employees and, upon notice to the Guarantor, the independent
public accountants of the Guarantor (and by this provision the Guarantor
authorizes such accountants to discuss the finances and affairs of the Guarantor
and its Subsidiaries), all at such times and from time to time, upon reasonable
notice and during business hours, as may be reasonably requested.
(f) The Guarantor will not liquidate, wind up or dissolve, or enter into
any consolidation, merger or other combination, or agree to do any of the
foregoing (other than the Restructuring provided that the conditions of Section
3.3. of the Credit Agreement are satisfied); provided, however, that the
Guarantor may merge into or consolidate with any other Person so long as (y) the
surviving corporation shall be the Guarantor unless the surviving corporation
expressly assumes the obligations of this Guaranty, and (z) immediately after
giving effect thereto, no Default or Event of Default would exist.
(g) The Guarantor will not create, incur, assume or suffer to exist any
Indebtedness other than:
(i) Indebtedness incurred by the Guarantor, provided that any such
Indebtedness shall rank either pari passu in right of payment to the
Guaranteed Obligations or be subordinated in right and time of payment
to the Guaranteed Obligations;
(ii) indorsements of negotiable instruments in the ordinary course of
business;
(iii) accrued expenses (including salaries, accrued vacation and
other compensation), current trade or other accounts payable and other
current liabilities arising in the ordinary course of business and not
incurred through the borrowing of money, provided that the same shall
be paid when due except to the extent being contested in good faith and
by appropriate proceedings;
(iv) loans and advances by the Guarantor to any Subsidiary of the
Guarantor; and
(v) Indebtedness in connection with Permitted Liens.
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(h) The Guarantor will not directly or indirectly, make, create, incur,
assume or suffer to exist, or enter into or suffer to exist any agreement (other
than the Credit Documents) or restriction that prohibits or conditions the
creation, incurrence or assumption of, any Lien upon or with respect to any part
of its property or assets, whether now owned or hereafter acquired, or agree to
do any of the foregoing, other than the following:
(i) Liens imposed by law, such as Liens of carriers, warehousemen,
mechanics, materialmen and landlords, and other similar Liens incurred
in the ordinary course of business for sums not constituting borrowed
money that are not overdue for a period of more than thirty (30) days
or that are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance
with GAAP;
(ii) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under the
Credit Agreement) incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure the performance of
letters of credit, bids, tenders, statutory obligations, surety and
appeal bonds, leases, government contracts and other similar
obligations (other than obligations for borrowed money) entered into in
the ordinary course of business;
(iii) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without
any penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with GAAP;
(iv) Liens in connection with pledges and deposits made pursuant to
statutory and regulatory requirements of Insurance Regulatory Authorities
by an Insurance Subsidiary in the ordinary course of its business, for the
purpose of securing regulatory capital or satisfying other financial
responsibility requirements;
(v) Liens upon cash and United States government and agency securities
of the Guarantor and its Subsidiaries, securing obligations incurred in
connection with reverse repurchase transactions and other similar
investment management transactions of such types and in such amounts as
are customary for companies similar to the Guarantor in size and lines
of business and that are entered into by the Guarantor and its
Subsidiaries in the ordinary course of business;
(vi) Purchase money Liens upon real or personal property used by the
Guarantor in the ordinary course of its business, securing Indebtedness
incurred solely to pay all or a portion of the purchase price thereof
(including in connection with capital leases, and including mortgages or
deeds of trust upon real property and improvements thereon), PROVIDED that
the aggregate principal amount at any time outstanding of all indebtedness
secured by such Liens does not exceed an amount equal to 5% of the
value of the total assets of the Guarantor and its Subsidiaries at
such time, determined on a consolidated basis in accordance with
GAAP as of the date of the financial statements of
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the Guarantor and its Subsidiaries most recently delivered under SECTION
5(A)(I) or (II) prior to such time, and PROVIDED FURTHER that any such Lien
(i) shall attach to such property concurrently with or within ten (10) days
after the acquisition thereof by the Guarantor, (ii) shall not exceed the
lesser of (y) the fair market value of such property or (z) the cost
thereof to the Guarantor, and (iii) shall not encumber any other property
of the Guarantor;
(vii) Any attachment or judgment Lien not constituting an Event of
Default under the Credit Agreement that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
(viii) With respect to any real property occupied by the Guarantor or
any of its Subsidiaries, all easements, rights of way, licenses and
similar encumbrances on title that do not materially impair the use of
such property for its intended purposes;
(ix) Liens on Borrower Margin Stock, to the extent the fair market
value thereof exceeds 25% of the fair market value of the assets of the
Borrower and its Subsidiaries (including Borrower Margin Stock); and
(x) Liens in favor of the trustee or agent under any agreement or
indenture relating to Indebtedness of the Guarantor and its Subsidiaries
permitted under this Agreement, covering sums required to be deposited
with such trustee or agent thereunder.
(i) The Guarantor will not, and will not permit or cause any of its
Subsidiaries to, make or permit any material change in its accounting policies
or reporting practices, except as may be required or permitted by GAAP or SAP,
as applicable;
(j) The Guarantor will not cease to own directly 100% of the issued and
outstanding capital stock of the Borrower.
6. PAYMENTS; APPLICATION; SET-OFF.
(a) The Guarantor agrees that, upon the failure of the Borrower to pay any
Guaranteed Obligations when and as the same shall become due (whether at the
stated maturity, by acceleration or otherwise), and without limitation of any
other right or remedy that any Guaranteed Party may have at law, in equity or
otherwise against the Guarantor, the Guarantor will forthwith pay or cause to be
paid to the Administrative Agent, for the benefit of the Guaranteed Parties, an
amount equal to the amount of the Guaranteed Obligations then due and owing as
aforesaid.
(b) All payments made by the Guarantor hereunder will be made in Dollars to
the Administrative Agent, without set-off, counterclaim or other defense and, in
accordance with and to the extent provided in Section 2.16 of the Credit
Agreement, free and clear of and without deduction for any Taxes, the
Guarantor hereby agreeing to comply with and be bound by the provisions of
Section 2.16 of the Credit Agreement in respect of all payments made by it
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hereunder and the provisions of which Section are hereby incorporated into and
made a part of this Guaranty by this reference as if set forth herein at length.
(c) All payments made hereunder shall be applied upon receipt as follows:
(i) first, to the payment of all Other Obligations owing to the
Administrative Agent;
(ii) second, after payment in full of the amounts specified in clause
(i) above, to the ratable payment of all other Total Obligations owing to
the Guaranteed Parties; and
(iii) third, after payment in full of the amounts specified in clauses
(i) and (ii) above, and following the termination of this Guaranty, to the
Guarantor or any other Person lawfully entitled to receive such
surplus.
(d) For purposes of applying amounts in accordance with this Section, the
Administrative Agent shall be entitled to rely upon any Guaranteed Party that
has entered into a Hedge Agreement with the Borrower for a determination (which
such Guaranteed Party agrees to provide or cause to be provided upon request of
the Administrative Agent) of the outstanding Guaranteed Obligations owed to such
Guaranteed Party under any such Hedge Agreement. Unless it has actual knowledge
(including by way of written notice from any such Guaranteed Party) to the
contrary, the Administrative Agent, in acting hereunder, shall be entitled to
assume that no Hedge Agreements or Obligations in respect thereof are in
existence between any Guaranteed Party and the Borrower.
(e) The Guarantor shall remain liable to the extent of any deficiency
between the amount of all payments made hereunder and the aggregate amount of
the sums referred to in clauses (i) and (ii) of subsection (c) above.
(f) In addition to all other rights and remedies available under the Credit
Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by the Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by the Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of the Guarantor against
any or all of the obligations of the Guarantor to such Guaranteed Party
hereunder now or hereafter existing, whether or not such obligations may be
contingent or unmatured, the Guarantor hereby granting to each Guaranteed Party
a continuing security interest in and Lien upon all such deposits and other
property as security for such obligations. Each Guaranteed Party agrees to
notify the Guarantor promptly after any such set-off and application; provided,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application.
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7. NO WAIVER. The rights and remedies of the Guaranteed Parties expressly
set forth in this Guaranty and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Guaranteed
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between any of the Guarantor and the
Guaranteed Parties or their agents or employees shall be effective to amend,
modify or discharge any provision of this Guaranty or any other Credit Document
or to constitute a waiver of any Default or Event of Default. No notice to or
demand upon the Guarantor in any case shall entitle the Guarantor to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the right of any Guaranteed Party to exercise any right or remedy or
take any other or further action in any circumstances without notice or demand.
8. ENFORCEMENT. The Guaranteed Parties agree that, except as provided in
SECTION 6(F), this Guaranty may be enforced only by the Administrative Agent,
acting upon the instructions or with the consent of the Required Lenders as
provided for in the Credit Agreement, and that no Guaranteed Party shall have
any right individually to enforce or seek to enforce this Guaranty or to realize
upon any collateral or other security given to secure the payment and
performance of the Guarantor's obligations hereunder. The obligations of the
Guarantor hereunder are independent of the Guaranteed Obligations, and a
separate action or actions may be brought against the Guarantor whether or not
action is brought against the Borrower and whether or not the Borrower is joined
in any such action. The Guarantor agrees that to the extent all or part of any
payment of the Guaranteed Obligations made by any Person is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by or on behalf of any Guaranteed Party to a trustee, receiver or any
other party under any Insolvency Laws (the amount of any such payment, a
"Reclaimed Amount"), then, to the extent of such Reclaimed Amount, this Guaranty
shall continue in full force and effect or be revived and reinstated, as the
case may be, as to the Guaranteed Obligations intended to be satisfied as if
such payment had not been received; and the Guarantor acknowledges that the term
"Guaranteed Obligations" includes all Reclaimed Amounts that may arise from time
to time.
9. AMENDMENTS, WAIVERS, ETC. No amendment, modification, waiver, discharge
or termination of, or consent to any departure by the Guarantor from, any
provision of this Guaranty, shall be effective unless in a writing signed by the
Administrative Agent and such of the Lenders as may be required under the
provisions of the Credit Agreement to concur in the action then being taken, and
then the same shall be effective only in the specific instance and for the
specific purpose for which given.
10. CONTINUING GUARANTY; TERM; SUCCESSORS AND ASSIGNS; ASSIGNMENT;
SURVIVAL. This Guaranty is a continuing guaranty and covers all of the
Guaranteed Obligations as the same may arise and be outstanding at any
time and from time to time from and after the date hereof, and shall
(i) remain in full force and effect until satisfaction of all of the
Termination Requirements (provided that the provisions of clause (ii)
of SECTION 1(A) shall survive any termination of this
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Guaranty), (ii) be binding upon and enforceable against the Guarantor and its
successors and assigns (provided, however, that the Guarantor may not sell,
assign or transfer any of its rights, interests, duties or obligations hereunder
without the prior written consent of the Lenders) and (iii) inure to the benefit
of and be enforceable to the extent provided in SECTION 8 by each Guaranteed
Party and its successors and assigns. Without limiting the generality of clause
(iii) above, any Guaranteed Party may, in accordance with the provisions of the
Credit Agreement, assign all or a portion of the Guaranteed Obligations held by
it (including by the sale of participations), whereupon each Person that becomes
the holder of any such Guaranteed Obligations shall (except as may be otherwise
agreed between such Guaranteed Party and such Person) have and may exercise all
of the rights and benefits in respect thereof granted to such Guaranteed Party
under this Guaranty or otherwise. The Guarantor hereby irrevocably waives notice
of and consents in advance to the assignment as provided above from time to time
by any Guaranteed Party of all or any portion of the Guaranteed Obligations held
by it and of the corresponding rights and interests of such Guaranteed Party
hereunder in connection therewith. All representations, warranties, covenants
and agreements herein shall survive the execution and delivery of this Guaranty.
11. GOVERNING LAW; CONSENT TO JURISDICTION. THIS GUARANTY SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS (EXCLUDING NEW YORK GENERAL OBLIGATIONS
LAW SS.5-1401). THE PARTIES HERETO HEREBY DECLARE THAT IT IS THEIR INTENTION
THAT THIS GUARANTY SHALL BE REGARDED AS MADE UNDER THE LAWS OF THE STATE OF NEW
YORK AND THAT THE LAWS OF SAID STATE SHALL BE APPLIED IN INTERPRETING ITS
PROVISIONS IN ALL CASES WHERE LEGAL INTERPRETATION SHALL BE REQUIRED. EACH OF
THE PARTIES HERETO AGREES (A) THAT THIS GUARANTY INVOLVES AT LEAST $250,000; AND
(B) THAT THIS GUARANTY HAS BEEN ENTERED INTO BY THE PARTIES HERETO IN EXPRESS
RELIANCE UPON NEW YORK GENERAL OBLIGATIONS LAW SS. 5-1401. NOTWITHSTANDING THE
FOREGOING CHOICE OF LAW, THE GUARANTOR HEREBY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF ANY STATE COURT WITHIN NEW YORK COUNTY, NEW YORK OR MECKLENBURG
COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT
OF THE STATE OF NORTH CAROLINA OR THE SOUTHERN DISTRICT OF THE STATE OF NEW YORK
FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT
DOCUMENTS, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION
WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY GUARANTEED PARTY OR THE GUARANTOR. THE GUARANTOR
IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY
JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION
THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. NOTHING IN THIS SECTION
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SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT THE RIGHT OF ANY GUARANTEED PARTY TO BRING ANY ACTION OR
PROCEEDING AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
12. WAIVER OF JURY TRIAL. THE GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, EACH GUARANTEED PARTY, HEREBY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OF THE OTHER
CREDIT DOCUMENTS, OR ANY RELATED PROCEEDING TO WHICH ANY GUARANTEED PARTY OR THE
GUARANTOR IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY RELATED COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY GUARANTEED PARTY OR THE GUARANTOR.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Guarantor and, by its acceptance of the benefits hereof, each Guaranteed Party,
(i) acknowledges that this waiver is a material inducement to enter into a
business relationship, that it has relied on this waiver in entering into this
Guaranty or accepting the benefits hereof, as the case may be, and that it will
continue to rely on this waiver in its related future dealings with the other
parties hereto, and (ii) further warrants and represents that it has reviewed
this waiver with its legal counsel and that, based upon such review, it
knowingly and voluntarily waives its jury trial rights to the extent permitted
by applicable law. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, MODIFICATIONS OR SUPPLEMENTS TO OR RESTATEMENTS OF THIS
GUARANTY OR ANY OF THE OTHER CREDIT DOCUMENTS. IN THE EVENT OF LITIGATION, THIS
GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
13. NOTICES. All notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered (a) if to the Guarantor, at c/o ABG Financial and Management Services
Inc., ▇▇▇▇▇▇ House, ▇▇▇▇▇▇ Road, St. ▇▇▇▇▇▇▇, Barbados, Attention: [NEED NAME],
Telecopy No. [NEED NUMBER], and (b) if to any Guaranteed Party, at its address
for notices set forth in the Credit Agreement; or to such other address as any
of the Persons listed above may designate for itself by like notice to the other
Persons listed above; and in each case, with copies to such other Persons as may
be specified under the provisions of the Credit Agreement. All such notices and
communications shall be deemed to have been given (i) if mailed as provided
above by any method other than overnight delivery service, on the third
Business Day after deposit in the mails, (ii) if mailed by overnight
delivery service, telegraphed, telexed, telecopied or cabled, when delivered
for overnight delivery, delivered to the telegraph company, confirmed by
telex answerback, transmitted by telecopier or delivered to the cable
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company, respectively, or (iii) if delivered by hand, upon delivery; provided
that notices and communications to the Administrative Agent shall not be
effective until received by the Administrative Agent.
14. SEVERABILITY. To the extent any provision of this Guaranty is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.
15. CONSTRUCTION. The headings of the various sections and subsections of
this Guaranty have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
16. COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed by its duly authorized officers as of the date first above written.
EVEREST RE GROUP, LTD.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Chief Financial Officer, Senior
Vice President and Comptroller
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Title: Senior Vice President
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