EXECUTION COPY
EXHIBIT 99(a)
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$797,750,000
AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of October 30, 2002,
among
FUND AMERICAN ENTERPRISES HOLDINGS, INC.(f/k/a TACK HOLDING CORP.),
FUND AMERICAN COMPANIES, INC.(f/k/a TACK ACQUISITION CORP.),
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
XXXXXX BROTHERS INC.,
as Arranger,
FLEET NATIONAL BANK,
as Syndication Agent,
BANK OF AMERICA, N.A. and BANK ONE, NA,
as Co-Documentation Agents,
and
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
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TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS.............................................................................1
1.1 Defined Terms............................................................................1
1.2 Other Definitional Provisions...........................................................23
SECTION 2 AMOUNT AND TERMS OF COMMITMENTS........................................................24
2.1 Term Loan Commitments...................................................................24
2.2 Procedure for Term Loan Borrowing.......................................................25
2.3 Repayment of Term Loans.................................................................25
2.4 Revolving Credit Commitments............................................................27
2.5 Procedure for Revolving Credit Borrowing................................................28
2.6 Swing Line Commitment...................................................................28
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans.......................29
2.8 Repayment of Loans; Evidence of Debt....................................................30
2.9 Commitment Fees, etc....................................................................31
2.10 Termination or Reduction of Revolving Credit Commitments...............................31
2.11 Optional Prepayments...................................................................32
2.12 Mandatory Prepayments and Commitment Reductions........................................32
2.13 Conversion and Continuation Options....................................................34
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches..............................34
2.15 Interest Rates and Payment Dates.......................................................34
2.16 Computation of Interest and Fees.......................................................35
2.17 Inability to Determine Interest Rate...................................................35
2.18 Pro Rata Treatment and Payments........................................................36
2.19 Requirements of Law....................................................................39
2.20 Taxes..................................................................................41
2.21 Indemnity..............................................................................42
2.22 Illegality.............................................................................43
2.23 Change of Lending Office...............................................................43
2.24 Replacement of Lenders under Certain Circumstances.....................................43
SECTION 3 LETTERS OF CREDIT......................................................................44
3.1 L/C Commitment..........................................................................44
3.2 Procedure for Issuance of Letter of Credit..............................................44
3.3 Fees and Other Charges..................................................................45
3.4 L/C Participations......................................................................45
3.5 Reimbursement Obligation of the Borrower................................................46
3.6 Obligations Absolute....................................................................46
3.7 Letter of Credit Payments...............................................................47
3.8 Applications............................................................................47
SECTION 4 REPRESENTATIONS AND WARRANTIES.........................................................47
4.1 Financial Condition.....................................................................47
4.2 No Change...............................................................................48
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4.3 Corporate Existence; Compliance with Law................................................48
4.4 Corporate Power; Authorization; Enforceable Obligations.................................48
4.5 No Legal Bar............................................................................49
4.6 No Material Litigation..................................................................49
4.7 No Default..............................................................................49
4.8 Ownership of Property; Liens............................................................49
4.9 Intellectual Property...................................................................49
4.10 Taxes..................................................................................49
4.11 Federal Regulations....................................................................50
4.12 ERISA..................................................................................50
4.13 Investment Company Act; Other Regulations..............................................50
4.14 Subsidiaries...........................................................................50
4.15 Use of Proceeds........................................................................51
4.16 Environmental Matters..................................................................51
4.17 Accuracy of Information, etc...........................................................52
4.18 Security Documents.....................................................................52
4.19 Solvency...............................................................................53
4.20 Insurance Regulatory Matters...........................................................53
SECTION 5 CONDITIONS PRECEDENT...................................................................53
5.1 Conditions to Restatement Effective Date................................................53
5.2 Conditions to Restatement Effective Date and Each Extension of Credit...................54
SECTION 6 AFFIRMATIVE COVENANTS..................................................................54
6.1 Financial Statements....................................................................54
6.2 Certificates; Other Information.........................................................56
6.3 Payment of Obligations..................................................................57
6.4 Conduct of Business and Maintenance of Existence, etc...................................57
6.5 Maintenance of Property; Insurance......................................................57
6.6 Inspection of Property; Books and Records; Discussions..................................58
6.7 Notices.................................................................................58
6.8 Environmental Laws......................................................................59
6.9 [Reserved]..............................................................................59
6.10 Additional Collateral, etc.............................................................59
6.11 Subordinated Seller Note...............................................................61
SECTION 7 NEGATIVE COVENANTS.....................................................................61
7.1 Financial Condition Covenants...........................................................61
7.2 Limitation on Indebtedness and Issuance of Preferred Stock..............................62
7.3 Limitation on Liens.....................................................................64
7.4 Limitation on Fundamental Changes.......................................................66
7.5 [Reserved]..............................................................................66
7.6 Limitation on Restricted Payments.......................................................66
7.7 Limitation on Investments...............................................................67
7.8 Limitation on Optional Payments, Redemptions and Modifications of Debt
Instruments and Preferred Stock, etc.................................................68
7.9 Limitation on Transactions with Affiliates..............................................69
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7.10 [Reserved].............................................................................69
7.11 Limitation on Changes in Fiscal Periods................................................69
7.12 Limitation on Negative Pledge Clauses..................................................69
7.13 Limitation on Lines of Business........................................................70
SECTION 8 EVENTS OF DEFAULT......................................................................70
SECTION 9 THE ADMINISTRATIVE AGENT...............................................................73
9.1 Appointment.............................................................................73
9.2 Delegation of Duties....................................................................74
9.3 Exculpatory Provisions..................................................................74
9.4 Reliance by Administrative Agent........................................................74
9.5 Notice of Default.......................................................................75
9.6 Non-Reliance on Administrative Agent and Other Lenders..................................75
9.7 Indemnification.........................................................................75
9.8 Administrative Agent in Its Individual Capacity.........................................76
9.9 Successor Administrative Agent..........................................................76
9.10 Authorization to Release Liens and Guarantees..........................................77
9.11 The Arranger, the Syndication Agent and the Co-Documentation Agents....................77
SECTION 10 MISCELLANEOUS.........................................................................77
10.1 Amendments and Waivers.................................................................77
10.2 Notices................................................................................78
10.3 No Waiver; Cumulative Remedies.........................................................79
10.4 Survival of Representations and Warranties.............................................79
10.5 Payment of Expenses....................................................................80
10.6 Successors and Assigns; Participations and Assignments.................................81
10.7 Adjustments; Set-off...................................................................84
10.8 Counterparts...........................................................................84
10.9 Severability...........................................................................85
10.10 Integration...........................................................................85
10.11 GOVERNING LAW.........................................................................85
10.12 Submission To Jurisdiction; Waivers...................................................85
10.13 Acknowledgments.......................................................................85
10.14 Confidentiality.......................................................................86
10.15 Release of Collateral and Guarantee Obligations.......................................86
10.16 Accounting Changes....................................................................87
10.17 Delivery of Lender Addenda and Release of Additional Borrower.........................87
10.18 WAIVERS OF JURY TRIAL.................................................................88
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SCHEDULES:
4.4 Consents, Authorizations, Filings and Notices
4.14 Subsidiaries
4.18 UCC Filing Jurisdictions
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Amended and Restated Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D [Reserved]
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Xxxxxxx Xxxxxx & Xxxxx
F-2 Form of Legal Opinion of In-House Counsel
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J-1 Form of Lender Addendum
J-2 Form of Lender Addendum
K [Reserved]
L [Reserved]
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AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of October 30, 2002,
among FUND AMERICAN ENTERPRISES HOLDINGS, INC. (f/k/a TACK HOLDING CORP.), a
Delaware corporation (the "PARENT"), FUND AMERICAN COMPANIES, INC. (f/k/a TACK
ACQUISITION CORP.), a Delaware corporation (the "BORROWER"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "LENDERS"), XXXXXX BROTHERS INC., as sole advisor, sole lead
arranger and sole bookrunner (in such capacity, the "ARRANGER"), FLEET NATIONAL
BANK, as syndication agent (in such capacity, the "SYNDICATION AGENT"), BANK OF
AMERICA, N.A. and BANK ONE, NA, as co-documentation agents (in such capacity,
the "CO-DOCUMENTATION AGENTS"), and XXXXXX COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS White Mountains Insurance Group, Ltd., a company existing
under the laws of Bermuda ("WHITE MOUNTAINS"), the Parent, the Borrower, the
Lenders, the Arranger, the Syndication Agent, Bank of America, N.A. and the
Administrative Agent entered into the
Credit Agreement, dated as of March 16,
2001 (as amended, supplemented or otherwise modified through the date hereof,
the "EXISTING
CREDIT AGREEMENT");
WHEREAS, the parties hereto have agreed to amend and restate the
Existing
Credit Agreement as provided in this Agreement, which Agreement shall
become effective upon the satisfaction of certain conditions precedent set forth
in Section 5.1; and
WHEREAS, it is the intent of the parties hereto that this Agreement
not constitute a novation of the obligations and liabilities existing under the
Existing
Credit Agreement or evidence repayment (except as contemplated herein)
of any of such obligations and liabilities and that this Agreement amend and
restate in its entirety the Existing
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements
herein set forth, the parties hereto hereby agree that on the Restatement
Effective Date (as defined below) the Existing
Credit Agreement shall be amended
and restated in its entirety as follows:
SECTION 1 DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ACQUISITION": the acquisition by the Borrower of all of the
capital stock of CGU on June 1, 2001.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly,
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either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"AGGREGATE EXPOSURE": with respect to any Lender at any
time, an amount equal to the sum of (a) the aggregate then unpaid principal
amount of such Lender's Term Loans and (b) the amount of such Lender's
Revolving Credit Commitment then in effect or, if the Revolving Credit
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender
at any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the sum of the Aggregate Exposures of
all Lenders at such time.
"AGREEMENT": this Amended and Restated
Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"ANNUAL STATEMENT": the annual statutory financial statement
of any Insurance Subsidiary required to be filed with the Department of its
jurisdiction of incorporation or organization, which statement shall be in
the form required by such Insurance Subsidiary's jurisdiction of
incorporation or organization or, if no specific form is so required, in
the form of financial statements permitted by such Department to be used
for filing annual statutory financial statements and shall contain the type
of information permitted or required by such Department to be disclosed
therein, together with all exhibits or schedules filed therewith.
"APPLICABLE MARGIN": for each Type of Loan, the rate per
annum set forth under the relevant column heading below which corresponds
with the most current rating of the Facilities issued by S&P and Moody's
respectively:
Applicable
Margin for
Applicable Tranche B Applicable Margin
Margin for Term Loans Applicable Margin for
Revolving Credit and Tranche C for Revolving Tranche B Term
Loans and Term Loans Credit Loans and Loans and
Tranche A Term which are Tranche A Term Tranche C Term
Loans which are Eurodollar Loans which are Loans which are
Level Rating Eurodollar Loans Loans Base Rate Loans Base Rate Loans
----------------------------------------------------------------------------------------------
1 GREATER
THAN OR
EQUAL TO 1.50% 2.625% 0.50% 1.625%
BBB+ and
Baa1
2 BBB
and 1.75% 2.875% 0.75% 1.875%
Xxx0
0
0 XXX-
and 2.125% 3.00% 1.125% 2.00%
Baa3
4 BBB-
or Baa3 2.375% 3.25% 1.375% 2.25%
and
BB+ or
Ba1
5 BB+
and Ba1 2.50% 3.375% 1.50% 2.375%
6 LESS THAN
OR EQUAL 2.75% 3.625% 1.75% 2.625%
TO BB
and Ba2
Changes in the Applicable Margin shall become effective on
the date on which S&P and/or Moody's changes the rating it has issued for
the Facilities. In the event of split ratings, the lower rating shall
apply, PROVIDED that if the ratings are split by two or more levels, the
rating level next higher than the lower of the two ratings will apply.
Level 4 applies when there is either a BBB- or a Baa3 rating and a BB+
and/or a Ba1 rating. In the event that, at any time, the Facilities are not
rated by one of such rating agencies, the rating of such rating agency
shall be deemed to be the rating level next lower than the rating issued by
the other of such rating agencies. In the event that, at any time, the
Facilities are rated by neither such rating agency, the Applicable Margin
shall be as for Level 6.
"APPLICATION": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
issue a Letter of Credit.
"ARRANGER": as defined in the preamble hereto.
"ASSET SALE": any Disposition of Property or series of
related Dispositions of Property which yields gross proceeds to the Parent,
the Borrower or any Subsidiary Guarantor (valued at the initial principal
amount thereof in the case of non-cash proceeds consisting of notes or
other debt securities and valued at fair market value in the case of other
non-cash proceeds) in excess of $5,000,000. Notwithstanding the foregoing,
none of the following shall constitute an Asset Sale:
(a) the Disposition of obsolete, condemned, surplus or worn
out property in the ordinary course of business;
(b) the sale of inventory in the ordinary course of
business; the license of Intellectual Property in the ordinary course
of business; leases or subleases not materially interfering with the
ordinary conduct of business;
(c) any Disposition by a Subsidiary of any or all of its
assets to the Borrower or any Subsidiary Guarantor;
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(d) the sale or issuance or contribution of any
Subsidiary's Capital Stock to the Parent, the Borrower or any
Subsidiary Guarantor;
(e) the sale or issuance or contribution of any Insurance
Subsidiary's Capital Stock to any other Insurance Subsidiary;
(f) for the avoidance of doubt, any Disposition of Property
by an Insurance Subsidiary;
(g) Dispositions of Investments made and permitted pursuant
to Section 7.7; and
(h) sale and leaseback transactions yielding proceeds in an
aggregate amount up to $10,000,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE REVOLVING CREDIT COMMITMENT": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any,
of (a) such Lender's Revolving Credit Commitment then in effect OVER (b)
such Lender's Revolving Extensions of Credit then outstanding; PROVIDED,
that in calculating any Lender's Revolving Extensions of Credit for the
purpose of determining such Lender's Available Revolving Credit Commitment
pursuant to Section 2.9(a), the aggregate principal amount of Swing Line
Loans then outstanding shall be deemed to be zero.
"AVIVA": AVIVA plc, a company incorporated under the laws of
England and Wales (formerly CGNU plc).
"BASE RATE": for any day, a rate of interest per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: "PRIME RATE" shall mean the prime lending rate as set forth on the
British Banking Association Telerate page 5 (or such other comparable page
as may, in the opinion of the Administrative Agent, replace such page for
the purpose of displaying such rate), as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually available. The Administrative Agent or any
Lender may make commercial loans or other loans at rates of interest at,
above or below the Prime Rate. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective as
of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOANS": Loans for which the applicable rate of
interest is based upon the Base Rate.
"BENEFITTED LENDER": as defined in Section 10.7.
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"BERKSHIRE HATHAWAY": Berkshire Hathaway Inc., or an
affiliate.
"BERKSHIRE PREFERRED STOCK": the $300,000,000 aggregate
liquidation preference amount of non-voting preferred stock issued by the
Borrower to Berkshire Hathaway pursuant to the Certificate of Designation
of Series A Preferred Stock of the Borrower, dated as of May 30, 2001, as
amended, supplemented or otherwise modified from time to time.
"BOARD": the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BUSINESS DAY": means (i) with respect to any borrowing,
payment or rate selection of Eurodollar Loans, a day (other than a Saturday
or Sunday) on which banks generally are open in
New York City for the
conduct of substantially all of their commercial lending activities,
interbank wire transfers can be made on the Fedwire system and dealings in
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
New York for the conduct of substantially all of the
commercial lending activities, and interbank wire transfers can be made on
the Fedwire system.
"CAPITAL LEASE OBLIGATIONS": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP; and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"CAPITAL AND SURPLUS": as to any Insurance Subsidiary, as of
any date, the total amount shown on line 32, page 3, column 1 of the Annual
Statement of such Insurance Subsidiary, or an amount determined in a
consistent manner for any date other than one as of which an Annual
Statement is prepared (or any successor line, page or column that contains
the same information).
"CAPITAL STOCK": any and all shares, interests,
participations or other equivalents (however designated) of capital stock
of a corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options to
purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits,
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eurodollar time deposits or overnight bank deposits having maturities of
six months or less from the date of acquisition issued by any Lender or by
any commercial bank organized under the laws of the United States of
America or any state thereof having combined capital and surplus of not
less than $500,000,000; (c) commercial paper of an issuer rated at least
A-2 by Standard & Poor's Ratings Services ("S&P") or P-2 by Xxxxx'x
Investors Service, Inc. ("MOODY'S"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally,
and maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more
than 30 days with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the date
of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which
invest primarily in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"CASH FLOW": of the Borrower for any period, the sum,
without duplication, of (a) dividends actually paid to the Borrower or any
Subsidiary Guarantor by any Subsidiary in cash or Cash Equivalents during
such period plus (b) additional amounts that would be permitted to be paid
to the Borrower or any Subsidiary Guarantor during such period by any
Wholly Owned Subsidiary of the Borrower that is a first tier Insurance
Subsidiary without prior approval by any Governmental Authority in
accordance with the terms of any order, statute, rule or governmental
regulation pertaining to such first-tier Insurance Subsidiary plus or minus
(c) net cash tax receipts/payments of the Borrower during such period
pursuant to the Tax Sharing Agreement (other than any taxes or credits in
respect of asset sales).
"CASH INTEREST EXPENSE": of any Person for any period, total
cash interest expense (including that attributable to Capital Lease
Obligations) of such Person for such period with respect to all outstanding
Indebtedness of such Person (including, without limitation, all
commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers' acceptance financing and net
costs of such Person under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with
GAAP).
"CGU": CGU Corporation, a Delaware corporation.
"CLOSING DATE": June 1, 2001.
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"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COMMITMENT": with respect to any Lender, each of the
Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment, the
Tranche C Term Loan Commitment and the Revolving Credit Commitment of such
Lender.
"COMMITMENT FEE RATE": the rate per annum set forth below
which corresponds with the most current rating of the Facilities issued by
S&P and/or Moody's respectively.
Level Rating Commitment Fee
---------- --------------------------------------- -------------------
1 GREATER THAN OR EQUAL TO BBB+ and Baa1 0.25%
2 BBB and Baa2 0.25%
3 BBB- and Baa3 0.375%
4 BBB- or Baa3 and BB+ or Ba1 0.375%
5 BB+ and Ba1 0.375%
6 LESS THAN OR EQUAL TO BB and Ba2 0.375%
Changes in the Commitment Fee Rate shall become effective on
the date on which S&P and/or Moody's changes the rating it has issued for
the Facilities. In the event of split ratings, the lower rating shall
apply, PROVIDED that if the ratings are split by two or more levels, the
rating level next higher than the lower of the two ratings will apply.
Level 4 applies when there is either a BBB- or a Baa3 rating and a BB+
and/or a Ba1 rating. In the event that, at any time, the Facilities are not
rated by one of such rating agencies, the rating of such rating agency
shall be deemed to be the rating level next lower than the rating issued by
the other of such rating agencies. In the event that, at any time, the
Facilities are rated by neither such rating agency, the Commitment Fee Rate
shall be as for Level 6.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or that is treated as a single employer
with the Borrower under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer of the Borrower substantially in the form of Exhibit B.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential
Information Memorandum dated October 2002 and furnished to the Lenders in
connection with this Agreement and the syndication of the Tranche C Term
Loan Facility.
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"CONSOLIDATED NET INCOME": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP;
PROVIDED, that in calculating Consolidated Net Income of the Borrower and
its consolidated Subsidiaries for any period, there shall be excluded the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries.
"CONSOLIDATED NET WORTH": at any date, the sum of all
amounts that would, in conformity with GAAP, but excluding the effects of
SFAS 115, be included on a consolidated balance sheet of the Borrower and
its Subsidiaries under stockholders' equity at such date. Consolidated Net
Worth shall in any event include the amount of the Berkshire Preferred
Stock so long as it is outstanding.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"CONTROL INVESTMENT AFFILIATE": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person and (b) is organized by such
Person primarily for the purpose of making equity or debt investments in
one or more companies. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether by
contract or otherwise. Control Investment Affiliates of any Lender shall
include any Related Fund of such Lender.
"DEFAULT": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"DEFAULTING LENDER": any Lender that defaults in its
obligation to make any Loan hereunder, so long as such default is
continuing.
"DEPARTMENT": with respect to any Insurance Subsidiary, the
insurance commissioner or other Governmental Authority of such Insurance
Subsidiary's state of domicile with which such Insurance Subsidiary is
required to file its Annual Statement.
"DERIVATIVES COUNTERPARTY": as defined in Section 7.6.
"DISPOSITION": with respect to any Property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "DISPOSE" and "DISPOSED OF" shall have
correlative meanings.
"DOLLARS" and "$": lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
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"ENVIRONMENTAL LAWS": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other
legally enforceable requirements (including, without limitation, common
law) of any international authority, foreign government, the United States,
or any state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, as has been, is now, or
may at any time hereafter be, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other
authorizations required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves)
under any regulations of the Board or other Governmental Authority having
jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of
the Federal Reserve System.
"EURODOLLAR RATE": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing
on the first day of such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "EURODOLLAR RATE" for purposes of this definition shall be determined
by reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative Agent.
"EURODOLLAR LOANS": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"EURODOLLAR TRANCHE": the collective reference to Eurodollar
Loans under any Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section
8, PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"EXCLUDED FOREIGN SUBSIDIARIES": any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or
10
(ii) the guaranteeing by such Subsidiary of the Obligations, would, in the
good faith judgment of the Borrower, result in materially adverse tax
consequences to the Borrower.
"EXISTING
CREDIT AGREEMENT": as defined in the recitals
hereto.
"FACILITY": each of (a) the Tranche A Term Loans outstanding
(the "TRANCHE A TERM LOAN FACILITY"), (b) the Tranche B Term Loans
outstanding (the "TRANCHE B TERM LOAN FACILITY"), (c) the Tranche C Term
Loan Commitments and the Tranche C Term Loans made thereunder (the "TRANCHE
C TERM LOAN FACILITY") and (d) the Revolving Credit Commitments and the
extensions of credit made thereunder (the "REVOLVING CREDIT FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding 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 for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"FOLKSAMERICA": Folksamerica Holding Company, Inc., a
New
York corporation.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"FUNDING OFFICE": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower
and the Lenders.
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time, except that for
purposes of Section 7.1, GAAP shall be determined on the basis of such
principles in effect on the date hereof.
"GOVERNMENTAL AUTHORITY": any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing, including any board of insurance, insurance department or
insurance commissioner.
"GUARANTEE AND COLLATERAL AGREEMENT": the Amended and
Restated Guarantee and Collateral Agreement, substantially in the form of
Exhibit A, to be executed and delivered on the Restatement Effective Date,
as the same may be amended, supplemented or otherwise modified from time to
time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the
11
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY
OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"GUARANTORS": the collective reference to the Parent and the
Subsidiary Guarantors.
"HEDGE AGREEMENTS": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower or its
Subsidiaries providing for protection against fluctuations in interest
rates or currency exchange rates or otherwise providing for the exchange of
nominal interest obligations, either generally or under specific
contingencies.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b)
all obligations of such Person for the deferred purchase price of Property
or services (other than trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to Property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations of
such Person, contingent or otherwise, to purchase, redeem, retire or
otherwise acquire for value any Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of
12
obligations of the kind referred to in clauses (a) through (g) above, (i)
all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the
payment of such obligation and (j) for the purposes of Section 8(e) only,
all obligations of such Person in respect of Hedge Agreements. Indebtedness
shall not in any event include the Berkshire Preferred Stock.
"INDEMNIFIED LIABILITIES": as defined in Section 10.5.
"INDEMNITEE": as defined in Section 10.5.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INSURANCE REGULATIONS": any law, regulation, rule,
directive or order applicable to an insurance company.
"INSURANCE REGULATOR": any Person charged with the
administration, oversight or enforcement of any Insurance Regulation.
"INSURANCE SUBSIDIARY": any Subsidiary which is required to
be licensed by any Department as an insurer or reinsurer and each direct or
indirect Subsidiary of such Subsidiary.
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright licenses,
patents, patent licenses, trademarks, trademark licenses, technology,
know-how and processes, and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
"INTEREST COVERAGE RATIO": for any period, the ratio of Cash
Flow of the Borrower for such period to Cash Interest Expense of the
Borrower for such period.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while such
Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or shorter, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day that is three months, or
a whole multiple thereof, after the first day of such Interest Period and
the last day of such Interest Period and (d) as to any Loan (other than any
Revolving Credit Loan that is a Base Rate Loan and any Swing Line Loan),
the date of any repayment or prepayment made in respect thereof.
13
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may
be, with respect to such Eurodollar Loan and ending one, two, three or six
months (or, if consented to by each relevant Lender, nine or twelve months)
thereafter, as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months (or, if consented to by each relevant Lender,
nine or twelve months) thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business
Days prior to the last day of the then current Interest Period with respect
thereto; PROVIDED that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period in respect of Revolving Credit Loans
that would otherwise extend beyond the Revolving Credit Termination Date
shall end on the Revolving Credit Termination Date, and any other Interest
Period in respect of Term Loans under any Term Loan Facility that would
otherwise extend beyond the date final payment is due under such Term Loan
Facility shall end on such due date; and
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period.
"INVESTMENTS": as defined in Section 7.7.
"ISSUING LENDER": Fleet National Bank and any other
Revolving Credit Lender from time to time designated by the Borrower as an
Issuing Lender with the consent of such Revolving Credit Lender and the
Administrative Agent.
"L/C COMMITMENT": $25,000,000.
"L/C FEE PAYMENT DATE": the last day of each March, June,
September and December and the last day of the Revolving Credit Commitment
Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to
Section 3.5.
14
"L/C PARTICIPANTS": with respect to any Letter of Credit,
the collective reference to all the Revolving Credit Lenders other than the
Issuing Lender that issued such Letter of Credit.
"XXXXXX ENTITY": any of Xxxxxx Commercial Paper Inc. or any
of its affiliates (including Syndicated Loan Funding Trust).
"LENDER ADDENDUM": (a) with respect to any Tranche C Term
Loan Lender, a Lender Addendum substantially in the form of Exhibit J-2 and
(b) with respect to any other Lender, a Lender Addendum substantially in
the form of Exhibit J-1, in each case to be executed and delivered by such
Lender on the Restatement Effective Date as provided in Section 10.17.
"LENDERS": as defined in the preamble hereto.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LEVERAGE RATIO": as at the last day of each fiscal quarter
of the Borrower, the ratio of (a) Total Debt on such day to (b) the sum of
(i) Total Debt on such day plus (ii) Consolidated Net Worth on such day.
"LICENSE": 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 or reinsurance business.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this
Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents,
the Applications and the Notes.
"LOAN PARTIES": the Parent, the Borrower, and each
Subsidiary of the Borrower that is a party to a Loan Document.
"MAJORITY FACILITY LENDERS": with respect to any Facility,
the holders of more than 50% of the aggregate unpaid principal amount of
the Term Loans or the Total Revolving Extensions of Credit, as the case may
be, outstanding under such Facility (or, in the case of the Revolving
Credit Facility, prior to any termination of the Revolving Credit
Commitments, the holders of more than 50% of the Total Revolving Credit
Commitments).
15
"MAJORITY REVOLVING CREDIT FACILITY LENDERS": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"MANDATORY PREPAYMENT AMOUNT": as defined in Section
2.18(d).
"MATERIAL ADVERSE EFFECT": a material adverse effect on (i)
the business, assets, property or financial condition of the Borrower and
its Subsidiaries taken as a whole, or (ii) the validity or enforceability
of this Agreement or any of the other Loan Documents or the rights and
remedies of the Administrative Agent and the Lenders hereunder or
thereunder.
"MATERIAL INSURANCE SUBSIDIARY": an Insurance Subsidiary
having Capital and Surplus of $50,000,000 or more.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other substances
or forces of any kind, whether or not any such substance or force is
defined as hazardous or toxic under any Environmental Law, that is in
relevant form or concentration regulated pursuant to or could reasonably be
expected to give rise to liability under any Environmental Law.
"MOODY'S": Xxxxx'x Investors Service, Inc. (or any successor
thereto).
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NAIC": the National Association of Insurance Commissioners
or any successor thereto, or in the absence of the National Association of
Insurance Commissioners or such successor, any other association, agency or
other organization performing advisory, coordination or other like
functions among insurance departments, insurance commissioners and similar
Governmental Authorities of the various states of the United States towards
the promotion of uniformity in the practices of such Governmental
Authorities.
"NET PROCEEDS": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of (i) attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied
to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such Asset Sale or Recovery
Event (other than any Lien pursuant to a Security Document) and other
customary fees and expenses actually incurred in connection therewith, (ii)
taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements) and (iii) appropriate amounts to be provided by the
Parent, the Borrower or any Subsidiary, as the case may be, as a reserve
required in accordance with
16
GAAP against any liabilities associated with such Asset Sale and retained
by the Parent, the Borrower or any Subsidiary, as the case may be, after
such Asset Sale, including, without limitation, reserves for pension and
other post-employment benefit liabilities and liabilities under any
indemnification obligations associated with such Asset Sale; and (b) in
connection with any issuance or sale of equity securities, the cash
proceeds received from such issuance, and cash received in respect of any
non-cash proceeds received from such issuance, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.20(a).
"NON-INSURANCE SUBSIDIARY": any Subsidiary other than an
Insurance Subsidiary.
"NON-U.S. LENDER": as defined in Section 2.20(d).
"NOTE": any promissory note evidencing any Loan.
"OPTIONAL PREPAYMENT AMOUNT": as defined in Section 2.18(d).
"OTHER TAXES": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or
any other Loan Document.
"PARTICIPANT": as defined in Section 10.6(b).
"PAYMENT OFFICE": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower
and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PREPAYMENT OPTION NOTICE": as defined in Section 2.18(d).
"PROJECTIONS": as defined in Section 6.2(c).
17
"PROPERTY": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"QUARTERLY STATEMENT": the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the
Department of its jurisdiction of incorporation, which statement shall be
in the form required by such Insurance Subsidiary's jurisdiction of
incorporation or, if no specific form is so required, in the form of
financial statements permitted by such Department to be used for filing
quarterly statutory financial statements and shall contain the type of
information permitted or required by such Department to be disclosed
therein, together with all exhibits or schedules filed therewith.
"RECOVERY EVENT": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Parent, the Borrower or any of its
Subsidiaries. It is understood and agreed that "Recovery Event" shall not
include any claim paid pursuant to a policy issued as part of the insurance
business of the Borrower and its Insurance Subsidiaries or in settlement of
any such claim.
"REFUNDED SWING LINE LOANS": as defined in Section 2.7.
"REFUNDING DATE": as defined in Section 2.7.
"REGISTER": as defined in Section 10.6(d).
"REGULATION U": Regulation U of the Board as in effect from
time to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower
to reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit issued by such Issuing Lender for the account of
the Borrower.
"REINVESTMENT DEFERRED AMOUNT": with respect to any
Reinvestment Event, the aggregate Net Proceeds received by the Parent, the
Borrower or any of its Subsidiaries in connection therewith that are not
applied to prepay the Term Loans or reduce the Revolving Credit Commitments
pursuant to Section 2.12(b) as a result of the delivery of a Reinvestment
Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a
Responsible Officer of the Borrower stating that no Default or Event of
Default has occurred and is continuing and that the Borrower (directly or
indirectly through a Subsidiary) intends and expects to use all or a
specified portion of the Net Proceeds of an Asset Sale or Recovery Event to
acquire assets useful in its business.
18
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto LESS
any amount expended prior to the relevant Reinvestment Prepayment Date to
acquire assets useful in the Borrower's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months
after such Reinvestment Event and (b) the date on which the Borrower shall
have determined not to, or shall have otherwise ceased to, acquire assets
useful in the Borrower's business with all or any portion of the relevant
Reinvestment Deferred Amount.
"RELATED FUND": with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor.
"REORGANIZATION": with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived.
"REQUIRED LENDERS": at any time, the holders of more than
50% of the sum of (a) the aggregate unpaid principal amount of the Term
Loans then outstanding and (b) the Total Revolving Credit Commitments then
in effect or, if the Revolving Credit Commitments have been terminated, the
Total Revolving Extensions of Credit then outstanding. The Term Loans
outstanding and the Total Revolving Credit Commitments in effect (or, when
applicable, Total Revolving Extensions of Credit outstanding) of any
Defaulting Lender shall be excluded for purposes of any vote of Required
Lenders.
"REQUIRED PREPAYMENT LENDERS": the Majority Facility Lenders
in respect of each Facility.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person (excluding, in the case of Section 2.19(a)(i), any of the
foregoing relating to the Administrative Agent or any Lender), and any law,
treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon
such Person or any of its Property or to which such Person or any of its
Property is subject.
"RESPONSIBLE OFFICER": the chief executive officer,
president, chief financial officer, Vice President and Director of Finance
(or equivalent responsible party), chief accounting officer or treasurer of
the Borrower or any Insurance Subsidiary, as the context requires, but in
any event, with respect to financial matters, the chief financial officer
or Vice President and Director of Finance (or equivalent responsible party)
of the Borrower or any such Insurance Subsidiary.
19
"RESTATEMENT EFFECTIVE DATE": the date on which the
conditions precedent set forth in Section 5.1 shall have been satisfied,
which date shall not be later than November 15, 2002.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading "Revolving Credit Commitment" opposite such Lender's name on
Schedule 1 to the lender addendum delivered by such Lender pursuant to the
Existing Credit Agreement, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same
may be changed from time to time pursuant to the terms hereof. The
aggregate amount of the Total Revolving Credit Commitments on the date of
this Agreement is $175,000,000.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"REVOLVING CREDIT LENDER": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"REVOLVING CREDIT LOANS": as defined in Section 2.4.
"REVOLVING CREDIT PERCENTAGE": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments (or,
at any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's
Revolving Extensions of Credit then outstanding constitutes the amount of
the Total Revolving Extensions of Credit then outstanding).
"REVOLVING CREDIT TERMINATION DATE": the fifth anniversary
of the Closing Date.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) the principal amount equal to such Lender's Revolving
Credit Percentage of the L/C Obligations then outstanding and (c) the
principal amount equal to such Lender's Revolving Credit Percentage of the
aggregate principal amount of Swing Line Loans then outstanding.
"RISK BASED CAPITAL RATIO": with respect to any Insurance
Subsidiary on any date of determination thereof, the ratio (expressed as a
percentage) of (a) the Total Adjusted Capital (as defined by the NAIC) of
such Insurance Subsidiary to (b) the Authorized Control Level Risk Based
Capital (as defined by the NAIC) of such Insurance Subsidiary. It is
understood and agreed that the Risk Based Capital Ratio shall not be
applied to Potomac Insurance Company of Pennsylvania.
20
"S&P": Standard & Poor's Rating Services (or any successor
thereto).
"SAP": with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the Department in
the jurisdiction of such Insurance Subsidiary for the preparation of annual
statements and other financial reports by insurance companies of the same
type as such Insurance Subsidiary, which are applicable to the
circumstances as of the date of determination.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"SECURITY DOCUMENTS": the collective reference to the
Guarantee and Collateral Agreement and all other security documents
heretofore or hereafter delivered to the Administrative Agent granting a
Lien on any Property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.
"SFAS": Statements of Financial Accounting Standards adopted
by the Financial Accounting Standards Board.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOLVENT": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise" after giving effect
to the expected value of rights of indemnity, contribution and subrogation,
as of such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts
become absolute and matured after giving effect to the expected value of
rights of indemnity, contribution and subrogation, (c) such Person will not
have, as of such date, an unreasonably small amount of capital with which
to conduct its business, and (d) such Person will be able to pay its debts
as they mature after giving effect to the expected value of rights of
indemnity, contribution and subrogation. For purposes of this definition,
(i) "debt" means liability on a "claim", and (ii) "claim" means any (x)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"SPECIFIED HEDGE AGREEMENT": any Hedge Agreement entered
into by (a) the Borrower or any of its Subsidiaries and (b) any Lender or
any affiliate thereof, as counterparty.
21
"SUBORDINATED SELLER NOTE": the promissory note in the
principal amount of $260,000,000, dated June 1, 2001, issued by the Parent
to Subsidiaries of AVIVA.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower
other than A.W.G. Xxxxx, Inc., any Insurance Subsidiary and any Excluded
Foreign Subsidiary.
"SURPLUS DEBENTURES": as to any Insurance Subsidiary, debt
securities of such Insurance Subsidiary the proceeds of which are permitted
to be included, in whole or in part, as Capital and Surplus of such
Insurance Subsidiary as approved and permitted by the applicable
Department.
"SWING LINE COMMITMENT": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $10,000,000.
"SWING LINE LENDER": Xxxxxx Commercial Paper Inc., in its
capacity as the Lender of Swing Line Loans.
"SWING LINE LOANS": as defined in Section 2.6.
"SWING LINE PARTICIPATION AMOUNT": as defined in
Section 2.7.
"TAX SHARING AGREEMENT": as defined in Section 6.12.
"TERM LOAN FACILITIES": the collective reference to the
Tranche A Term Loan Facility, the Tranche B Term Loan Facility and the
Tranche C Term Loan Facility.
"TERM LOAN LENDERS": the collective reference to the Tranche
A Term Loan Lenders, the Tranche B Term Loan Lenders and the Tranche C Term
Loan Lenders.
"TERM LOANS": the collective reference to the Tranche A Term
Loans, the Tranche B Term Loans and the Tranche C Term Loans.
"THIRD PARTY PREFERRED STOCK": $20,000,000 aggregate amount
of preferred stock issued by the Parent and sold to Zenith Insurance
Company in connection with the transactions contemplated under the Existing
Credit Agreement.
22
"TOTAL DEBT": at any date, the aggregate principal amount of
all Indebtedness of the Borrower at such date, determined on a stand alone
basis in accordance with GAAP.
"TOTAL REVOLVING CREDIT COMMITMENTS": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders outstanding at such time.
"TRANCHE A TERM LOAN": a Tranche A Term Loan made pursuant
to Section 2.1 of the Existing Credit Agreement. The aggregate principal
amount of Tranche A Term Loans outstanding on the Restatement Effective
Date is $228,750,000 (prior to giving effect to any conversion thereof into
Tranche C Term Loans pursuant to Section 2.1(b) or any prepayment thereof
with the proceeds of the Tranche C Term Loans).
"TRANCHE A TERM LOAN FACILITY": as defined in the definition
of "Facility" in this Section 1.1.
"TRANCHE A TERM LOAN LENDER": each Lender that is the holder
of a Tranche A Term Loan.
"TRANCHE A TERM LOAN PERCENTAGE": as to any Lender at any
time, the percentage which the aggregate principal amount of such Lender's
Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding.
"TRANCHE B TERM LOAN": a Tranche B Term Loan made pursuant
to Section 2.1 of the Existing Credit Agreement. The aggregate principal
amount of Tranche B Term Loans outstanding as of the Restatement Effective
Date is $394,000,000 (prior to giving effect to any prepayment thereof with
the proceeds of the Tranche C Term Loans).
"TRANCHE B TERM LOAN FACILITY": as defined in the definition
of "Facility" in this Section 1.1.
"TRANCHE B TERM LOAN LENDER": each Lender that is the holder
of a Tranche B Term Loan.
"TRANCHE B TERM LOAN PERCENTAGE": as to any Lender at any
time, the percentage which the aggregate principal amount of such Lender's
Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding.
"TRANCHE C TERM LOAN": a Loan made pursuant to Section
2.1(a) or converted from a Tranche A Term Loan pursuant to Section 2.1(b).
23
"TRANCHE C TERM LOAN COMMITMENT": as to any Lender, the
obligation of such Lender, if any, to make a Tranche C Term Loan to the
Borrower hereunder (or to convert all or part of such Lender's Tranche A
Term Loans into a Tranche C Term Loan hereunder) in a principal amount not
to exceed the amount set forth under the heading "Tranche C Term Loan
Commitment" opposite such Lender's name on Schedule 1 to the Lender
Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The aggregate amount of the Tranche C Term Loan Commitments on the
date of this Agreement is $143,817,452.34.
"TRANCHE C TERM LOAN FACILITY": as defined in the definition
of "Facility" in this Section 1.1.
"TRANCHE C TERM LOAN LENDER": each Lender that has a Tranche
C Term Loan Commitment or is the holder of a Tranche C Term Loan.
"TRANCHE C TERM LOAN PERCENTAGE": as to any Lender at any
time, the percentage which the aggregate principal amount of such Lender's
Tranche C Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche C Term Loans then outstanding.
"TRANSFEREE": as defined in Section 10.14.
"TYPE": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"UCC": as defined in Section 3.6.
"UCP": as defined in Section 3.6.
"WARRANT AGREEMENT": the Warrant Agreement dated as of May
30, 2001, among White Mountains, the Borrower and Berkshire Hathaway, as
supplemented or otherwise modified from time to time.
"WHITE MOUNTAINS": as defined in the recitals hereto.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other
Person all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.
"WHOLLY OWNED SUBSIDIARY GUARANTOR": any Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the Borrower.
1.2 OTHER DEFINITIONAL PROVISIONS. Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
24
(a) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Parent, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP or SAP, as the case may be.
(b) References herein to particular pages, columns, lines or
sections of any Person's Annual Statement shall be deemed, where appropriate, to
be references to the corresponding page, column, line or section of such
Person's Quarterly Statement, or if no such corresponding page, column, line or
section exists or if any report form changes, then to the corresponding item
referenced thereby. In the event the pages, columns, lines or sections of the
Annual Statement referenced herein are changed or renumbered from the pages,
columns, lines and sections applicable to the Annual Statement of CGU for 1999,
all such references shall be deemed references to such page, column, line or
section as so renumbered or changed.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2 AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM LOAN COMMITMENTS. (a) Subject to the terms and conditions
hereof, each Tranche C Term Loan Lender severally agrees to make a Tranche C
Term Loan to the Borrower (or, pursuant to Section 2.1(b), to convert all or
part of such Lender's Tranche A Term Loans into a Tranche C Term Loan hereunder)
on the Restatement Effective Date in an aggregate amount for such Tranche C Term
Loan Lender not to exceed the amount of the Tranche C Term Loan Commitment of
such Lender. The Term Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.13.
(b) Any Tranche A Term Loan Lender that is also a Tranche C Term
Loan Lender may elect, pursuant to the Lender Addendum executed by such Tranche
A Term Loan Lender, to satisfy all or a portion of its obligation under
paragraph (a) above by converting all or part of the outstanding principal
amount of such Lender's Tranche A Term Loans into a principal amount of Tranche
C Term Loans hereunder equal to the principal amount so converted (for the
avoidance of doubt, the amount of Tranche A Term Loans so converted into Tranche
C Term Loans is not an extension of new credit to the Borrower that is a
modification to and conversion of such Tranche A Term Loans). On the Restatement
Effective Date, immediately prior to the making of the Tranche C Term Loans to
be funded pursuant to Section 2.l(a), such Tranche A Term Loans shall be
converted for all purposes of this Agreement into Tranche C Term Loans
hereunder, and the Administrative Agent shall record in the Register the
aggregate amount of Tranche A Term Loans converted into Tranche C Term Loans.
25
(c) Subject to Section 2.18(d) and Section 2.1(b), all Tranche A
Term Loans and Tranche B Term Loans outstanding under (and as defined in) the
Existing Credit Agreement on the Restatement Effective Date shall remain
outstanding hereunder and shall constitute Tranche A Term Loans and Tranche B
Term Loans, respectively, on the terms set forth herein.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M.,
New York City time, one Business Day
prior to the anticipated Restatement Effective Date) requesting that the Tranche
C Term Loan Lenders make the Tranche C Term Loans on the Restatement Effective
Date and specifying the amount to be borrowed. The Tranche C Term Loans made on
the Restatement Effective Date shall initially be Base Rate Loans and,
notwithstanding anything to the contrary herein, such Loans may not be converted
into Eurodollar Loans at any time prior to three days after the Restatement
Effective Date. Upon receipt of such notice the Administrative Agent shall
promptly notify each Tranche C Term Loan Lender thereof. Not later than 12:00
Noon,
New York City time, on the Restatement Effective Date each Tranche C Term
Loan Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the Tranche C Term Loan
to be made by such Lender. The Administrative Agent shall make available to the
Borrower the aggregate of the amounts made available to the Administrative Agent
by the Tranche C Term Loan Lenders, in like funds as received by the
Administrative Agent.
2.3 REPAYMENT OF TERM LOANS. (a) The Tranche A Term Loan of each
Tranche A Lender shall mature in 17 consecutive quarterly installments,
commencing on March 31, 2002, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the percentage set forth
below opposite such installment of the aggregate principal amount of Tranche A
Term Loans made on the Closing Date (adjusted, in the case of each installment
payable after the Restatement Effective Date, to reflect the conversion of
Tranche A Term Loans to Tranche C Term Loans pursuant to Section 2.1(b)):
26
Installment Percentage
----------- ----------
March 31, 2002 15.00% Paid
June 30, 2002 4.375% Paid
September 30, 2002 4.375% Paid
December 31, 2002 4.375%
March 31, 2003 4.375%
June 30, 2003 5.00%
September 30, 2003 5.00%
December 31, 2003 5.00%
March 31, 2004 5.00%
June 30, 2004 5.625%
September 30, 2004 5.625%
December 31, 2004 5.625%
March 31, 2005 5.625%
June 30, 2005 6.25%
September 30, 2005 6.25%
December 31, 2005 6.25%
March 31, 2006 6.25%
(b) The Tranche B Term Loan of each Tranche B Lender shall mature
in 21 consecutive quarterly installments, commencing on March 31, 2002, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the percentage set forth below opposite such
installment of the aggregate principal amount of Tranche B Term Loans made on
the Closing Date:
Installment Percentage
------------------ ----------
March 31, 2002 1.00% Paid
June 30, 2002 0.25% Paid
September 30, 2002 0.25% Paid
December 31, 2002 0.25%
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
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June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 94.25%
(c) The Tranche C Term Loan of each Tranche C Lender shall mature
in 18 consecutive quarterly installments, commencing on December 31, 2002, each
of which shall be in an amount equal to such Lender's Tranche C Term Loan
Percentage multiplied by the percentage set forth below opposite such
installment of the aggregate principal amount of Tranche C Term Loans made on
the Restatement Effective Date:
Installment Percentage
------------------ ----------
December 31, 2002 0.25%
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 95.75%
2.4 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, the Revolving Credit Lenders severally agree to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender which, when
added to such Lender's Revolving Credit Percentage of the sum of (i) the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed the amount of such Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Credit Loans may from time
to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 2.5 and
2.13, provided that no Revolving Credit Loan shall be made as a Eurodollar
28
Loan after the day that is one month prior to the Revolving Credit Termination
Date. All Revolving Credit Loans outstanding under (and as defined in) the
Existing Credit Agreement on the Restatement Effective Date shall remain
outstanding hereunder and shall constitute Revolving Credit Loans on the terms
set forth herein.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans made to the Borrower on the Revolving Credit Termination Date.
2.5 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit Commitment Period, PROVIDED that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon,
New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of Base
Rate Loans), specifying (i) the amount and Type of Revolving Credit Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar
Loans, the length of the initial Interest Period therefor. Each borrowing of
Revolving Credit Loans under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole
multiple thereof (or, if the then aggregate Available Revolving Credit
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; PROVIDED, that the Swing Line Lender may request, on behalf of the
Borrower, borrowings of Base Rate Loans under the Revolving Credit Commitments
in other amounts pursuant to Section 2.7. Upon receipt of any such notice from
the Borrower, the Administrative Agent shall promptly notify each Revolving
Credit Lender thereof. Each Revolving Credit Lender will make its Revolving
Credit Percentage of the amount of each borrowing of Revolving Credit Loans
available to the Administrative Agent for the account of the Borrower at the
Funding Office prior to 12:00 Noon,
New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent in like funds as received by the Administrative Agent.
2.6 SWING LINE COMMITMENT. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees that, during the Revolving Credit
Commitment Period, it will make available to the Borrower in the form of swing
line loans ("SWING LINE LOANS") a portion of the credit otherwise available to
the Borrower under the Revolving Credit Commitments; PROVIDED that (i) the
aggregate principal amount of Swing Line Loans outstanding at any time shall not
exceed the Swing Line Commitment then in effect (notwithstanding that the Swing
Line Loans outstanding at any time, when aggregated with the Swing Line Lender's
other outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect or such Swing Line Lender's Revolving Credit
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
29
(b) The Borrower shall repay all outstanding Swing Line Loans on
the Revolving Credit Termination Date. Each payment in respect of Swing Line
Loans shall be made to the Swing Line Lender.
2.7 PROCEDURE FOR SWING LINE BORROWING; REFUNDING OF SWING LINE
LOANS. (a) The Borrower may borrow under the Swing Line Commitment on any
Business Day during the Revolving Credit Commitment Period, PROVIDED, the
Borrower shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:00 P.M.,
New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date. Each borrowing under the Swing Line Commitment shall be in an
amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not
later than 3:00 P.M.,
New York City time, on the Borrowing Date specified in the
borrowing notice in respect of any Swing Line Loan, the Swing Line Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of such Swing Line Loan. The
Administrative Agent shall make the proceeds of such Swing Line Loan available
to the Borrower on such Borrowing Date in like funds as received by the
Administrative Agent.
(b) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 12:00 Noon, New York
City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan, in an amount equal
to such Revolving Credit Lender's Revolving Credit Percentage of the aggregate
amount of the Swing Line Loans (the "REFUNDED SWING LINE LOANS") outstanding on
the date of such notice, to repay the Swing Line Lender. Each Revolving Credit
Lender shall make the amount of such Revolving Credit Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Credit Loans shall be made
immediately available by the Administrative Agent to the Swing Line Lender for
application by the Swing Line Lender to the repayment of the Refunded Swing Line
Loans. Upon the written request of any Revolving Credit Lender, the
Administrative Agent will, within three Business Days of such request, inform
such Revolving Credit Lender of the aggregate amount of Swing Line Loans
outstanding on the date of such request.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower,
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "REFUNDING DATE"), purchase for cash an undivided participating interest in
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "SWING LINE PARTICIPATION AMOUNT") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage TIMES (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
30
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's PRO RATA portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); PROVIDED, HOWEVER, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender the then unpaid principal amount of each
Revolving Credit Loan of such Revolving Credit Lender made to the Borrower on
the Revolving Credit Termination Date (or on such earlier date on which the
Loans become due and payable pursuant to Section 8). The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender, as the case may be,
(i) the then unpaid principal amount of each Swing Line Loan of such Swing Line
Lender on the Revolving Credit Termination Date (or on such earlier date on
which the Loans become due and payable pursuant to Section 8) and (ii) the
principal amount of each Term Loan of such Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 8).
The Borrower hereby further agrees to pay interest to the Administrative Agent
for the account of the appropriate Lender on the unpaid principal amount of the
Loans made to it from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
31
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Term Loans,
Revolving Credit Loans or Swing Line Loans, as the case may be, made by such
Lender to the Borrower, substantially in the forms of Exhibit G-1, G-2 or G-3,
respectively, with appropriate insertions as to date and principal amount.
2.9 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the Closing Date.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
(c) The Borrower agrees to pay to the Arranger the fees in the
amounts and on the dates from time to time agreed to in writing by the Borrower
and the Arranger.
2.10 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the aggregate amount of the Revolving Credit
Commitments; PROVIDED that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an amount
equal to
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$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
2.11 OPTIONAL PREPAYMENTS. (a) The Borrower may at any time and
from time to time prepay the Loans made to the Borrower, in whole or in part,
without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent at least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto in the case of Base
Rate Loans, which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided, that
(i) if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.21 and (ii) no prior notice is required for the
prepayment of Swing Line Loans. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Credit Loans that are Base Rate Loans and Swing Line Loans) accrued
interest to such date on the amount prepaid. Partial prepayments of Term Loans
and Revolving Credit Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swing Line Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof. Notwithstanding the foregoing, no prior notice shall be required for
the optional prepayment of the Tranche A Term Loans and the Tranche B Term Loans
to be made on the Restatement Effective Date with the proceeds of the Tranche C
Term Loans.
(b) Each optional prepayment in respect of the Tranche B Term
Loans or the Tranche C Term Loans made on or after the first anniversary of the
Closing Date and prior to the date that is eighteen months after the Closing
Date shall be accompanied by a prepayment premium equal to 0.5% of the principal
amount of such prepayment. Any prepayment of the Loans upon the refinancing
thereof (whether with proceeds of equity or Indebtedness) or upon the occurrence
of a Change of Control shall be deemed to be an optional prepayment.
2.12 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) Unless
the Required Prepayment Lenders and the Borrower shall otherwise agree, if any
Capital Stock shall be issued or sold by the Parent (except (i) any Capital
Stock of the Parent the proceeds of which are used solely to purchase or prepay
the Subordinated Seller Note and/or the Third Party Preferred Stock and (ii) any
Capital Stock of the Parent issued to White Mountains as a part of the
transaction in which the Berkshire Preferred Stock is redeemed with proceeds
received from the exercise of warrants under the Warrant Agreement), on the date
of such issuance or sale, an amount equal to 50% of the net proceeds thereof in
excess of $5,000,000 shall be contributed to the common equity of the Borrower
and applied by the Borrower toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section 2.12(d);
PROVIDED, that $20,000,000 of the proceeds of preferred stock issued by the
Parent and sold to a third party in connection with the transactions
contemplated by the Existing Credit Agreement shall be exempted from the
requirements of this Section 2.12(a).
(b) Unless the Required Prepayment Lenders and the Borrower shall
otherwise agree, if on any date the Borrower or any of its Non-Insurance
Subsidiaries shall receive Net Proceeds from any Asset Sale or Recovery Event,
then, on such date, the Term Loans shall be
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prepaid, and/or the Revolving Credit Commitments shall be reduced, in each case
in accordance with Section 2.12(d), by the Required Portion of such Net
Proceeds. For purposes of this Section 2.12(b), the "REQUIRED PORTION" of the
Net Cash Proceeds of any Asset Sale or Recovery Event shall be (i) if no
Reinvestment Notice is delivered in respect of such Net Cash Proceeds on or
prior to the date of receipt of such Net Cash Proceeds, 100% of such Net Cash
Proceeds in excess of $10,000,000, and (ii) if the assets subject to such
Disposition are insurance-related businesses or assets and a Reinvestment Notice
is delivered in respect of such Net Cash Proceeds on or prior to the date of
receipt of such Net Cash Proceeds, (A) with respect to Net Cash Proceeds of any
Asset Sale or Recovery Event consummated in any fiscal year which, together with
all other Asset Sales and Recovery Events consummated during such fiscal year,
results in the Disposition of Capital and Surplus in an amount not exceeding 10%
of combined Capital and Surplus of all Insurance Subsidiaries as of the last day
of the immediately preceding fiscal year, 0% of such Net Cash Proceeds and (B)
with respect to the Net Cash Proceeds of any Asset Sale or Recovery Event
consummated in any fiscal year to the extent such Net Cash Proceeds are not
covered by the foregoing sub-clause (A), 100% of such Net Cash Proceeds and
(iii) if the assets subject to such Disposition are not insurance-related
businesses or assets and a Reinvestment Notice is delivered in respect of such
Net Cash Proceeds on or prior to the date of receipt or such Net Cash Proceeds,
0% of such Net Cash Proceeds. For purposes of determining the amount of Net Cash
Proceeds of any Disposition to be allocated to sub-clause (A) and sub-clause
(B), respectively, of clause (ii) of the preceding sentence in the case of any
Disposition to which both such sub-clauses apply, the amount of Net Cash
Proceeds allocated to such sub-clause (B) shall be the aggregate amount of such
Net Cash Proceeds multiplied by a fraction (not to exceed 1.0), the numerator of
which is the amount of Capital and Surplus Disposed of in such Disposition and
all prior Dispositions during such fiscal year in excess of 10% of combined
Capital and Surplus of all Insurance Subsidiaries as of the last day of the
immediately preceding fiscal year, and the denominator of which is the aggregate
amount of Capital and Surplus Disposed of in such Disposition. In addition, in
the event any Reinvestment Notice is delivered in respect of any Reinvestment
Event, then, on the Reinvestment Prepayment Date applicable to such Reinvestment
Event, the Term Loans shall be prepaid, and/or the Revolving Credit Commitments
shall be reduced, by an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event, as set forth in Section 2.12(d).
(c) [Reserved]
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to paragraphs (a) and (b) of this Section
shall be applied, FIRST, to the prepayment of the Term Loans and, SECOND, to
reduce permanently the Revolving Credit Commitments; PROVIDED, that the
Revolving Credit Commitments shall not be reduced to less that $100,000,000
pursuant to this Section 2.12. Any reduction of the Revolving Credit Commitments
pursuant to this Section shall be accompanied by prepayment of the Revolving
Credit Loans and/or Swing Line Loans to the extent, if any, that the Total
Revolving Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as so reduced, PROVIDED that if the aggregate principal amount of
Revolving Credit Loans and Swing Line Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral
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account established with the Administrative Agent for the benefit of the Lenders
on terms and conditions satisfactory to the Administrative Agent.
2.13 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may
elect from time to time to convert Eurodollar Loans made to the Borrower to Base
Rate Loans by giving the Administrative Agent at least two Business Days' prior
irrevocable notice of such election, provided that any such conversion of
Eurodollar Loans may be made only on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert Base Rate
Loans made to the Borrower to Eurodollar Loans by giving the Administrative
Agent at least three Business Days' prior irrevocable notice of such election
(which notice shall specify the length of the initial Interest Period therefor),
PROVIDED that no Base Rate Loan under a particular Facility may be converted
into a Eurodollar Loan (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Majority Facility Lenders in
respect of such Facility have, determined in its or their sole discretion not to
permit such conversions or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) The Borrower may elect to continue any Eurodollar Loan made to
the Borrower as such upon the expiration of the then current Interest Period
with respect thereto by giving irrevocable notice to the Administrative Agent,
in accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans, PROVIDED that no Eurodollar Loan under a particular Facility may
be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Majority Facility Lenders in
respect of such Facility have, determined in its or their sole discretion not to
permit such continuations or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility, and PROVIDED,
FURTHER, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso, such Loans shall be converted automatically
to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
2.14 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF EURODOLLAR TRANCHES.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no
more than ten Eurodollar Tranches shall be outstanding at any one time.
2.15 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
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(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum that is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section PLUS 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans under the Revolving Credit Facility PLUS 2%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans under the relevant Facility PLUS 2% (or, in
the case of any such other amounts that do not relate to a particular Facility,
the rate then applicable to Base Rate Loans under the Revolving Credit Facility
PLUS 2%), in each case, with respect to clauses (i) and (ii) above, from the
date of such non-payment until such amount is paid in full (after as well as
before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.16 COMPUTATION OF INTEREST AND FEES. (a) Interest, fees,
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365-day (or 366-day, as
the case may be) year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a) with respect to Loans
made to the Borrower.
2.17 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
36
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.18 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee or Letter of Credit fee, and any reduction of the Commitments
of the Lenders, shall be made pro rata according to the respective Tranche A
Term Loan Percentages, Tranche B Term Loan Percentages, Tranche C Term Loan
Percentages or Revolving Credit Percentages, as the case may be, of the relevant
Lenders. Each payment (other than prepayments) in respect of principal or
interest in respect of the Term Loans and each payment in respect of fees
payable hereunder shall be applied to the amounts of such obligations owing to
the Lenders PRO RATA according to the respective amounts then due and owing to
the Lenders.
(b) Subject to Section 2.18(d), each mandatory prepayment required
by Section 2.12 to be applied to Term Loans shall be allocated among the Term
Loan Facilities PRO RATA according to the respective outstanding principal
amounts of Term Loans under such Facilities. Subject to Section 2.18(d), each
optional prepayment in respect of the Term Loans shall be allocated among the
Term Loan Facilities PRO RATA according to the respective outstanding principal
amounts of Term Loans under such Facilities; PROVIDED, that the optional
prepayment to be made with the proceeds of the Tranche C Term Loans shall be
allocated, subject to Section 2.18(d), between the Tranche A Term Loan Facility
and the Tranche B Term Loan Facility PRO RATA according to the respective
outstanding principal amounts of Term Loans under such Facilities. Each payment
(including each prepayment) of the Term Loans outstanding under any Term Loan
Facility shall be allocated among the Term Loan Lenders holding such Term Loans
PRO RATA based on the principal amount of such Term Loans held by such Term Loan
Lenders, and shall be applied (i) in the case of mandatory prepayments pursuant
to Section 2.12(b), to the installments thereof PRO RATA based on the remaining
outstanding principal amount of such installments, and (ii) in the case of all
other prepayments, FIRST, to the next scheduled installment thereof to be due
after the date of such prepayment, and, SECOND, to the remaining installments
PRO RATA based on the remaining outstanding principal amount of such
installments. Amounts prepaid on account of the Term Loans may not be
reborrowed.
37
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans of the
Borrower shall be made PRO RATA according to the respective outstanding
principal amounts of the Revolving Credit Loans of the Borrower then held by the
Revolving Credit Lenders. Each payment in respect of Reimbursement Obligations
in respect of any Letter of Credit shall be made to the relevant Issuing Lender.
(d) Notwithstanding anything to the contrary in Sections 2.11,
2.12 or 2.18(b), so long as any Tranche A Term Loans are outstanding, each
Tranche B Term Loan Lender and Tranche C Term Loan Lender may, at its option,
decline up to 100% of the portion of any optional prepayment or mandatory
payment applicable to the Tranche B Term Loans or Tranche C Term Loans of such
Lender; accordingly, with respect to the amount of any optional prepayment
described in Section 2.11 or mandatory prepayment described in Section 2.12 that
is allocated to Tranche B Term Loans or Tranche C Term Loans (such amounts,
respectively, the "OPTIONAL PREPAYMENT AMOUNT" and the "MANDATORY PREPAYMENT
AMOUNT"), at any time when Tranche A Term Loans remain outstanding, the Borrower
will:
(i) in the case of any optional prepayment of the Tranche B
Term Loans or Tranche C Term Loans which the Borrower wishes to make, give
the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each
Tranche B Term Loan Lender and Tranche C Term Loan Lender a notice (each, a
"PREPAYMENT OPTION NOTICE") as described below; and
(ii) in the case of any mandatory prepayment required to be
made pursuant to Section 2.12, on the date specified in Section 2.12 for
such prepayment, (A) give the Administrative Agent telephonic notice
(promptly confirmed in writing) requesting that the Administrative Agent
prepare and provide to each Tranche B Term Loan Lender and Tranche C Term
Loan Lender a Prepayment Option Notice as described below and (B) deposit
with the Administrative Agent the Mandatory Prepayment Amount.
As promptly as practicable after receiving such notice from the Borrower,
the Administrative Agent will send to each Tranche B Term Loan Lender and
Tranche C Term Loan Lender a Prepayment Option Notice, which shall be
substantially in the form of Exhibit H, and shall include an offer by the
Borrower to prepay on the Prepayment Date the Tranche B Term Loans or Tranche C
Term Loans of such Lender by an amount equal to the portion of the Optional
Prepayment Amount or Mandatory Prepayment Amount, as the case may be, indicated
in such Lender's Prepayment Option Notice as being applicable to such Lender's
Tranche B Term Loans or Tranche C Term Loans. The "PREPAYMENT DATE" in respect
of any Prepayment Option Notice shall be the date which is (i) in the case of a
Prepayment Option Notice relating to an optional prepayment, the later of (A)
three Business Days after the date of such Prepayment Option Notice and (B) the
date on which the Borrower has advised the Administrative Agent that it wishes
to make such optional prepayment and (ii) in the case of a Prepayment Option
Notice relating to a mandatory prepayment, the date which is three Business Days
after the date of such Prepayment Option Notice.
On the Prepayment Date:
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(i) in the case of any optional prepayment, the Borrower
shall pay to the Administrative Agent the Optional Prepayment Amount, and
the Administrative Agent shall (A) apply the Optional Prepayment toward
prepayment of the outstanding Tranche B Term Loans or Tranche C Term Loans
in respect of which Lenders have accepted optional prepayment as described
above and (B) apply the remaining portion of the Optional Prepayment Amount
not accepted by the Tranche B Term Loan Lenders or Tranche C Term Loan
Lenders toward prepayment of the Tranche A Term Loans; and
(ii) in the case of any mandatory prepayment, the
Administrative Agent shall (A) apply the Mandatory Prepayment Amount toward
prepayment of the outstanding Tranche B Term Loans or Tranche C Term Loans
in respect of which Lenders have accepted mandatory prepayment as described
above and (B) apply the remaining portion of the Mandatory Prepayment
Amount not accepted by the Tranche B Term Loan Lenders or Tranche C Term
Loan Lenders toward prepayment of the Tranche A Term Loans.
The procedures described above in this paragraph (d) shall not be applicable in
the case of a prepayment in full of all Term Loans. Notwithstanding any of the
foregoing, with respect to the optional prepayment of the Term Loans to be made
by the Borrower on the Restatement Effective Date, each Tranche B Term Loan
Lender that delivers a Lender Addendum as provided in Section 5.1(a) hereby
declines 100% of the portion of such optional prepayment applicable to such
Lender's Tranche B Term Loans, and each such Lender hereby waives the notice
requirements of this Section 2.18(d).
(e) The application of any payment of Loans under any Facility
(including optional and mandatory prepayments) shall be made, FIRST, to Base
Rate Loans under such Facility and, SECOND, to Eurodollar Loans under such
Facility. Each payment of the Loans (except in the case of Swing Line Loans and
Revolving Credit Loans that are Base Rate Loans) shall be accompanied by accrued
interest to the date of such payment on the amount paid.
(f) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been made on the next following Business Day. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
39
(g) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.
(h) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.19 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
40
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) In addition to, and without duplication of, amounts which may
become payable from time to time pursuant to paragraphs (a) and (b) of this
Section 2.19, the Borrower agrees to pay to each Lender which requests
compensation under this paragraph (c) by notice to the Borrower, on the last day
of each Interest Period with respect to any Eurodollar Loan made by such Lender,
at any time when such Lender shall be required to maintain reserves against
"Eurocurrency liabilities" under Regulation D of the Board of Governors of the
Federal Reserve System (or, at any time when such Lender may be required by the
Board of Governors of the Federal Reserve System or by any other Governmental
Authority, whether within the United States or in another relevant jurisdiction,
to maintain reserves against any other category of liabilities which includes
deposits by reference to which the Eurodollar Rate is determined as provided in
this Agreement or against any category of extensions of credit or other assets
of such Lender which includes any such Eurodollar Loans), an additional amount
(determined by such Lender's calculation or, if an accurate calculation is
impracticable, reasonable estimate using such reasonable means of allocation as
such Lender shall determine) equal to the actual costs, if any, incurred by such
Lender during such Interest Period as a result of the applicability of the
foregoing reserves to such Eurodollar Loans.
(d) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
41
2.20 TAXES. (a) Except as required by law, all payments made by the
Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise and
doing business taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former connection
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent's or such Lender's having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("NON-EXCLUDED
TAXES") or any Other Taxes are required to be withheld from any amounts payable
to the Administrative Agent or any Lender hereunder, the amounts so payable to
the Administrative Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent or such Lender (after payment of
all Non-Excluded Taxes and Other Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement;
PROVIDED, HOWEVER, that no Borrower shall be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that
are attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are withholding taxes imposed
on amounts payable to such Lender at the time such Lender becomes a party to
this Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.20(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as soon as practicable thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an official receipt received by
the Borrower showing payment thereof (or other evidence of such payment
reasonably satisfactory to the Administrative Agent). If the Borrower fails to
pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this Section 2.20 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America (or
any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "NON-U.S. LENDER")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI (or other applicable form), or, in the
42
case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest" a statement substantially in the form of Exhibit I and a
Form W-8BEN (or other applicable form), or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, 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, PROVIDED that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
2.21 INDEMNITY. The Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender
sustains or incurs as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making by the Borrower of a prepayment
or conversion of Eurodollar Loans on a day that is not the last day of an
Interest Period with respect thereto; PROVIDED that any request for
indemnification made by a Lender pursuant to this Section 2.21 shall be made
within six months of the incurrence of the loss or expense requested to be
indemnified. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar
43
market. A certificate as to any amounts payable pursuant to this Section
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.22 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.21.
2.23 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event that it knows to give rise to the operation of Section
2.19, 2.20(a) or 2.22 with respect to such Lender, it will use all commercially
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event, or to
assign its rights and obligations hereunder with respect to such Loans to
another of its offices, branches or affiliates with the object of avoiding the
consequences of such event, or to assign its rights and obligations hereunder
with respect to such Loans to another of its offices, branches or affiliates,
with the object of avoiding the consequences of such event; PROVIDED, that such
designation is made on terms that, in the reasonable sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic, legal
or regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of the Borrower or the rights of
any Lender pursuant to Section 2.19, 2.20(a) or 2.22.
2.24 REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES. The
Borrower shall be permitted to replace any Lender (a) that requests
reimbursement for amounts owing pursuant to Section 2.19, (b) with respect to
which the Borrower is required to pay any amounts under Section 2.20 or (c) that
defaults in its obligation to make Loans hereunder, with a replacement financial
institution or other entity; PROVIDED that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 2.23 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.19 or 2.20, (iv) the replacement financial institution or other entity
shall purchase, at par, all Loans and other amounts owing to such replaced
Lender on or prior to the date of replacement, (v) the Borrower shall be liable
to such replaced Lender under Section 2.21 (as though Section 2.21 were
applicable) if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution or other entity, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender and replacement Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6
44
(including, without limitation, obtaining the consents provided for therein)
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.19 or 2.20, as the
case may be, in respect of any period prior to the date on which such
replacement shall be consummated, and (ix) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Lender shall have against the replaced Lender.
SECTION 3 LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue letters of
credit ("LETTERS OF CREDIT") for the account of the Borrower on any Business Day
during the Revolving Credit Commitment Period in such form as may be approved
from time to time by such Issuing Lender; PROVIDED, that no Issuing Lender shall
have any obligation to issue any Letter of Credit if, after giving effect to
such issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii)
the aggregate amount of the Available Revolving Credit Commitments would be less
than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii)
expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date which is five Business Days prior to the Revolving
Credit Termination Date, provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (y) above).
(b) No Issuing Lender shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
(c) All Letters of Credit outstanding under (and as defined in)
the Existing Credit Agreement on the Restatement Effective Date shall remain
outstanding hereunder as Letters of Credit on the terms set forth herein.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may
from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender (with a copy to the Administrative Agent) at
its address for notices specified herein an Application therefor, completed to
the satisfaction of such Issuing Lender, and such other certificates, documents
and other papers and information as such Issuing Lender may request. Upon
receipt of any Application, an Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
to by such Issuing Lender and the Borrower (but in no event shall any Issuing
Lender be required to issue any Letter of Credit earlier than three Business
Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower. Each
Issuing Lender shall, within three days of such issuance, give notice to the
Administrative Agent
45
of the issuance of each Letter of Credit issued by such Issuing Lender
(including the amount thereof). Upon the written request of any Revolving Credit
Lender, the Administrative Agent will, within three Business Days of such
request, inform such Revolving Credit Lender of the aggregate drawable amount of
all outstanding Letters of Credit issued to the Borrower on the date of such
request.
3.3 FEES AND OTHER CHARGES. (a) The Borrower will pay to the
Administrative Agent, for the account of the Revolving Credit Lenders, a fee on
the aggregate drawable amount of all outstanding Letters of Credit issued for
such its account at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the Revolving Credit Facility, to
be shared ratably among the Revolving Credit Lenders in accordance with their
respective Revolving Credit Percentages and payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date. In addition, the Borrower shall
pay to the relevant Issuing Lender for its own account a fronting fee on the
aggregate drawable amount of all outstanding Letters of Credit issued by such
Issuing Lender for the Borrower's account at a rate to be agreed upon by the
Borrower and such Issuing Lender, payable quarterly in arrears on each L/C Fee
Payment Date after the date of issuance of such Letter of Credit.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse each Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by such Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
3.4 L/C PARTICIPATIONS. (a) Each Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce each Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from each Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk, an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in each Issuing Lender's obligations
and rights under each Letter of Credit issued by such Issuing Lender hereunder
and the amount of each draft paid by such Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit issued by such Issuing
Lender for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to such Issuing Lender upon demand at such Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant to an
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Lender under any Letter of Credit is paid to
such Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to such Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C
46
Participant pursuant to Section 3.4(a) is not made available to such Issuing
Lender by such L/C Participant within three Business Days after the date such
payment is due, such Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to Base Rate Loans under the Revolving
Credit Facility. A certificate of such Issuing Lender submitted to any L/C
Participant with respect to any such amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its PRO
RATA share of such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to such L/C Participant its PRO RATA share
thereof; PROVIDED, HOWEVER, that in the event that any such payment received by
such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees
to reimburse each Issuing Lender, on the next Business Day after each date on
which such Issuing Lender notifies the Borrower of the date and amount of a
draft presented under any Letter of Credit issued for its account and paid by
such Issuing Lender, for the amount of (a) such draft so paid and (b) any taxes,
fees, charges or other costs or expenses incurred by such Issuing Lender in
connection with such payment (the amounts described in the foregoing clauses (a)
and (b) in respect of any drawing, collectively, the "PAYMENT AMOUNT"). Each
such payment shall be made to such Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on each Payment Amount
from the date of the applicable drawing until payment in full at the rate set
forth in (i) until the second Business Day following the date of the applicable
drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c). Each drawing
under any Letter of Credit issued for the Borrower's account shall (unless an
event of the type described in clause (i) or (ii) of Section 8(f) shall have
occurred and be continuing with respect to the Borrower, in which case the
procedures specified in Section 3.4 for funding by L/C Participants shall apply)
constitute a request by the Borrower to the Administrative Agent for a borrowing
pursuant to Section 2.5 of Base Rate Loans (or, at the option of the
Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Credit Loans (or, if applicable, Swing
Line Loans) could be made, pursuant to Section 2.5 (or, if applicable, Section
2.7), if the Administrative Agent had received a notice of such borrowing at the
time the Administrative Agent receives notice from the relevant Issuing Lender
of such drawing under such Letter of Credit.
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against any Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with each Issuing
Lender that such Issuing Lender shall not be responsible for, and its
Reimbursement
47
Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Issuing Lender. The Borrower agrees that any action
taken or omitted by an Issuing Lender under or in connection with any Letter of
Credit issued by it for the account of the Borrower or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code in effect in the State of New York (the "UCC") or, if applicable to such
Letter of Credit, the Uniform Customs and Practice for Documentary Credits as
published by the International Chamber of Commerce most recently at the time of
issuance of any Letter of Credit (the "UCP"), shall be binding on the Borrower
and shall not result in any liability of such Issuing Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the relevant Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of the
relevant Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit, in addition to any payment obligation
expressly provided for in such Letter of Credit issued by such Issuing Lender,
shall be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment appear
on their face to be in conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4 REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Parent and the Borrower hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:
4.1 FINANCIAL CONDITION. The audited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at December 31, 2001 and
the related consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by and accompanied by unqualified reports
from PricewaterhouseCoopers LLP, present fairly in all material respects the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for such fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
of and for the fiscal quarters ended
48
March 31, 2002 and June 30, 2002, and the related unaudited consolidated
statements of income and cash flows for such fiscal quarters ended on such
dates, present fairly in all material respects the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such dates,
and the consolidated results of their operations and their consolidated cash
flows for the fiscal quarters then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firms
of accountants and disclosed therein).
4.2 NO CHANGE. Up to and including the Restatement Effective Date,
since December 31, 2001 there has been no development or event that has or could
reasonably be expected to have a Material Adverse Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Parent,
the Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate or other power and authority, and the legal right, to own and
operate its Property, to lease the Property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification, except to the extent failure to so qualify
or be in good standing could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect, and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect. It is
understood that this provision shall not imply a representation with respect to
environmental matters, which representation is set forth in Section 4.16.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate or other power and authority, and the legal right,
to make, deliver and perform the Loan Documents to which it is a party and, in
the case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate or other action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the borrowings on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other
Loan Documents, except (i) consents, authorizations, filings and notices
described in Schedule 4.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect and (ii) the filings
referred to in Section 4.18, except to the extent failure to obtain any
consents, authorizations, filings and notices could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Loan Document has
been duly executed and delivered on behalf of each Loan Party that is a party
thereto. This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party that
is a party thereto, enforceable against each such Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
49
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of the Parent, the Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents), except to the extent such
violation or Lien could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Parent or the Borrower, threatened by or against the
Parent, the Borrower or any of its Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.
4.7 NO DEFAULT. None of the Parent, the Borrower or any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Parent, the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien except
as permitted by Section 7.3, except to the extent such defects in title could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.9 INTELLECTUAL PROPERTY. The Parent, the Borrower and each of
its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No material
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the Parent or the Borrower know of any valid
basis for any such claim. The use of Intellectual Property by the Parent, the
Borrower and its Subsidiaries does not infringe on the rights of any Person in
any material respect. It is understood that the Borrower and its Subsidiaries
will be permitted to use the CGU name and related tradenames with respect to
Insurance Subsidiaries, for a period of eighteen months after the Closing Date
(with conditional six-month extensions through September 24, 2005 in
jurisdictions where regulatory approval for name changes has not been received)
but not thereafter.
4.10 TAXES. Each of the Parent, the Borrower and each of its
Subsidiaries has filed or caused to be filed all material Federal, state and
other tax returns that are required to be filed (taking into account any
applicable extensions) and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its Property and
all other material taxes, fees or other charges imposed on it or any of its
Property by any Governmental
50
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with SAP or GAAP, as applicable, have been provided on
the books of the Parent, the Borrower or its Subsidiaries, as the case may be);
and, to the knowledge of the Parent and the Borrower, no tax Lien has been
filed, and no claim is being asserted, with respect to any such tax, fee or
other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
4.12 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period, other
than in connection with acquisitions of Houston General Insurance Group, York
Insurance Company and A.W.G. Xxxxx, Inc. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits by an amount which, if
the Plan then terminated, could reasonably be expected to result in a Material
Adverse Effect. Neither the Borrower nor any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan that has resulted
or could reasonably be expected to result in a material liability under ERISA,
and neither the Borrower nor any Commonly Controlled Entity would become subject
to any liability under ERISA which could reasonably be expected to result in a
Material Adverse Effect if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.13 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.14 SUBSIDIARIES. (a) The Subsidiaries listed on Schedule 4.14
constitute all the Subsidiaries of the Borrower on the date hereof. Schedule
4.14 sets forth as of the date hereof the name and jurisdiction of incorporation
of each such Subsidiary and, as to each such Subsidiary, the percentage of each
class of Capital Stock owned by each Loan Party.
51
(b) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors' qualifying shares) of any
nature relating to any Capital Stock of the Parent, the Borrower or any
Subsidiary, except as disclosed on Schedule 4.14.
4.15 USE OF PROCEEDS. The proceeds of the Loans (other than the
Tranche C Term Loans) and the Letters of Credit shall be used for working
capital and general corporate purposes of the Borrower and its Subsidiaries. The
proceeds of the Tranche C Term Loans shall be used to prepay the Tranche A Term
Loans and, if necessary, the Tranche B Term Loans on the Restatement Effective
Date.
4.16 ENVIRONMENTAL MATTERS. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in compliance
with all applicable Environmental Laws; (ii) hold all Environmental Permits
(each of which is in full force and effect) required for any of their
current operations or for any property owned, leased, or otherwise operated
by any of them; and (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their
Environmental Permits.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now and were not present at, on,
under, in or about any real property formerly owned, leased or operated by
any of them during the period of such ownership, lease or operation, owned,
leased or operated by the Borrower or any of its Subsidiaries, and neither
the Borrower nor any of its Subsidiaries (nor any entity for the actions of
which any of them is responsible) has released or discharged any Materials
of Environmental Concern at any property formerly owned, leased or operated
by any of them or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for
re-use or recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of the Borrower or any
of its Subsidiaries under any applicable Environmental Law, or (ii)
adversely interfere with the Borrower's or any of its Subsidiaries'
continued operations.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating
to any Environmental Law to which the Borrower or any of its Subsidiaries
is, or to the knowledge of the Parent or the Borrower will be, named as a
party that is pending or, to the knowledge of the Parent or the Borrower
threatened, nor has the Borrower nor any of its Subsidiaries received any
request for information the subject of which could reasonably be expected
to result in any of the foregoing.
(d) Neither the Borrower nor any of its Subsidiaries has received
any written notice that it is a potentially responsible party under or
relating to the federal
52
Comprehensive Environmental Response, Compensation, and Liability Act or
any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has entered
into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum for
dispute resolution, relating to compliance with or liability under any
Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has assumed
or retained, by contract or operation of law, any liabilities of any kind,
fixed or contingent, reasonably likely to form the basis for any claim
under any Environmental Law or with respect to any Material of
Environmental Concern.
(g) It is understood that Section 4.16 does not apply to claims
made pursuant to policies for which the Borrower or any of its Subsidiaries
is or is asserted to be responsible, issued pursuant to the insurance
business of the Borrower and/or its Insurance Subsidiaries or to the
settlement of any such claims.
4.17 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. The representations
and warranties made by the Parent and the Borrower under the Existing Credit
Agreement were true and correct in all material respects when made.
4.18 SECURITY DOCUMENTS. The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.18 (which financing statements have been filed)
and such other filings as are specified on Schedule 3 to the Guarantee and
Collateral Agreement have been completed (all documents required for which
filings have been duly completed and executed and delivered to the
Administrative Agent), the Guarantee and Collateral Agreement shall constitute a
perfected Lien on, and security interest in,
53
all right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), in each case to the extent that such security
interest can be perfected by the delivery of stock certificates and other
instruments with effective indorsements, the filing of UCC financing statements,
and filings in respect of Intellectual Property in the United States Patent and
Trademarks Office.
4.19 SOLVENCY. Each Loan Party is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith will be and will continue to be, Solvent.
4.20 INSURANCE REGULATORY MATTERS. No License of 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 knowledge of the Parent or the Borrower, there is no sustainable basis for
such suspension or revocation, and no such suspension or revocation has been
threatened by any Governmental Authority.
SECTION 5 CONDITIONS PRECEDENT
5.1 CONDITIONS TO RESTATEMENT EFFECTIVE DATE. The occurrence of
the Restatement Effective Date is subject to the satisfaction of the following
conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
the Parent, the Borrower and the Additional Borrower under (and as defined
in) the Existing Credit Agreement, (ii) from the Required Lenders (as
defined in the Existing Credit Agreement), Lender Addenda in the form of
Exhibit J-1, (iii) from each Tranche C Term Loan Lender, a Lender Addendum
in the form of Exhibit J-2 and (iv) the Guarantee and Collateral Agreement,
executed and delivered by each party thereto.
(b) APPROVALS. All governmental and third party approvals
necessary in connection with the continuing operations of the Parent, the
Borrower and its Subsidiaries and the transactions contemplated hereby
shall have been obtained and be in full force and effect.
(c) FEES. (i) (A) The Lenders, the Arranger and the Administrative
Agent shall have received all fees required to be paid, and all expenses
required to be paid for which invoices have been presented (including
reasonable fees, disbursements and other charges of counsel to the
Administrative Agent), and (B) the Borrower shall have paid to the
Syndication Agent and the Co-Documentation Agents all fees that have been
agreed to with them, in each case on or before the Restatement Effective
Date, and (ii) on the Restatement Effective Date the Borrowers shall have
paid (A) to each Tranche A Term Loan Lender that (x) consents to the
Restated Credit Agreement and (y) commits to make a Tranche C Term Loan (or
to convert its Tranche A Term Loans into Tranche C Term Loans pursuant to
Section 2.1(b)) on the Restatement Effective Date in a total amount equal
to the aggregate outstanding principal amount of such Lender's Tranche A
Term Loans, a consent fee equal to 0.10% of such Lender's Tranche A Term
Loans outstanding on the Restatement Effective Date (prior to giving effect
to any such conversion), (B) to
54
each Tranche B Term Loan Lender that (x) consents to the Restated Credit
Agreement and (y) declines 100% of the proceeds of the Tranche C Term Loans
that would otherwise be applicable to prepay such Lender's Tranche B Term
Loans, a consent fee equal to 0.10% of such Lender's Tranche B Term Loans
outstanding on the Restatement Effective Date and (C) to each Revolving
Credit Lender that consents to the Restated Credit Agreement, a consent fee
equal to 0.10% of such Lender's Revolving Credit Commitments in effect as
of the Restatement Effective Date.
(d) CLOSING CERTIFICATE. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Restatement Effective
Date, substantially in the form of Exhibit C, with appropriate insertions
and attachments.
(e) LEGAL OPINIONS. The Administrative Agent shall have received
the legal opinion of Xxxxxxx Xxxxxx & Xxxxx, counsel to the Parent, the
Borrower and its Subsidiaries, substantially in the form of Exhibit F.
5.2 CONDITIONS TO RESTATEMENT EFFECTIVE DATE AND EACH EXTENSION OF
CREDIT. The occurrence of the Restatement Effective Date and the agreement of
each Lender to make any extension of credit requested to be made by it hereunder
on any date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, except to the extent that they expressly
relate to an earlier date, in which case they shall be true and correct in
all material respects as of such earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6 AFFIRMATIVE COVENANTS
The Parent and the Borrower hereby jointly and severally agree that,
from and after the Restatement Effective Date and so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, each of the
Parent and the Borrower shall and shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent
(with sufficient copies for distribution by the Administrative Agent to each
Lender):
55
(a) (i) as soon as available, but in any event within 95 days
after the end of each fiscal year of the Borrower subsequent to the Closing
Date, a copy of the audited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures as of the end of
and for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by PricewaterhouseCoopers LLP or other independent certified
public accountants of nationally recognized standing; and
(ii) as soon as available, but in any event not later than 50
days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower subsequent to the Closing Date, the unaudited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal quarter and the related unaudited
consolidated statements of income and of cash flows for such fiscal quarter
and the portion of the fiscal year through the end of such fiscal quarter,
setting forth in each case in comparative form the figures as of the end of
and for the corresponding period in the previous year, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements, together with notes to such financial
statements, to fairly present in all material respects the financial
condition and income and cash flows of the subject thereof as at the dates
and for the periods covered thereby, and to be prepared in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the
case may be, and disclosed therein).
(b) to the extent such a report is required by law to be prepared,
as soon as available but not later than 85 days after the end of each
fiscal year of each Material Insurance Subsidiary subsequent to the Closing
Date, copies of the unaudited Annual Statement of such Material Insurance
Subsidiary, certified by a Responsible Officer of such Material Insurance
Subsidiary, all such statements to be prepared in accordance with SAP
consistently applied throughout the periods reflected therein and, if
required by the applicable Governmental Authority, audited and certified by
independent certified public accountants of recognized national standing
(it being understood that 150 days shall be allowed for delivery of audited
statements);
(c) as soon as available but not later than 70 days after the end
of each of the first three fiscal quarters of each fiscal year of each
Material Insurance Subsidiary subsequent to the Closing Date, copies of the
Quarterly Statement of each of the Material Insurance Subsidiaries,
certified by a Responsible Officer of such Material Insurance Subsidiary,
all such statements to be prepared in accordance with SAP consistently
applied through the period reflected herein;
(d) within 15 days after being delivered to any Material Insurance
Subsidiary subsequent to the Closing Date, any final Report on Examination
issued by the applicable
56
Department or the NAIC that results in material adjustments to the
financial statements referred to in paragraphs (b)(i) or (b)(ii) above; and
(e) within 100 days after the end of each fiscal year of each
Material Insurance Subsidiary subsequent to the Closing Date, a copy of the
"Statement of Actuarial Opinion" and "Management Discussion and Analysis"
for each such Material Insurance Subsidiary which is provided to the
applicable Department (or equivalent information should such Department no
longer require such a statement) as to the adequacy of loss reserves of
such Material Insurance Subsidiary, such opinion to be in the format
prescribed by the insurance code of the state of domicile of such Material
Insurance Subsidiary.
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent or, in the case of clause (f), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a)(i) (and, if such financial statements are
audited, Section 6.1(b)(i)), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default (it being understood that such certificate may
be limited in scope and qualified in accordance with customary practices of
the accounting profession), except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed in all material respects all
of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to which it is a
party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, a Compliance Certificate
containing all information and calculations necessary for determining
compliance by the Parent, the Borrower and its Subsidiaries with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be;
(c) as soon as available, and in any event no later than 95 days
after the end of each fiscal year of the Borrower subsequent to the Closing
Date, a budget for the following fiscal year (including a projected balance
sheet of the Borrower and its Subsidiaries as of the end of the following
fiscal year, and the related statements of projected cash flow (cash flow
to be prepared on a Parent only basis), projected changes in financial
position and projected income), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such
fiscal year (collectively, the "PROJECTIONS"), which Projections shall in
each case be accompanied by a certificate of a Responsible Officer of the
Borrower stating that such Projections have been prepared in good faith and
are based on good faith estimates and assumptions believed by the Borrower
to be reasonable at the time made (it being recognized by the
57
Lenders that such opinions, projections and forecasts as to any future
event or state of affairs are not to be viewed as factual information and
that actual results during the period or periods covered by any such
opinion, projection or forecast may differ from the opinions and projected
and forecast results);
(d) within 50 days after the end of each first, second and third
fiscal quarter of the Borrower subsequent to the Closing Date, and within
95 days after the end of each fourth fiscal quarter of the Borrower
subsequent to the Closing Date, a narrative discussion and analysis of the
financial condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as
compared to the comparable periods of the previous year;
(e) within 10 days after the same are sent, all financial
statements and reports that the Parent or the Borrower sends to the holders
of any class of its debt securities or public equity securities and, within
10 days after the same are filed, all financial statements and reports that
the Parent or the Borrower may make to, or file with, the SEC; and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Parent, the Borrower or its Subsidiaries, as the case may be;
PROVIDED, that the Borrower may, in the ordinary course of business, extend
payments on those payables if beneficial to the operation of their businesses.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE, ETC. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all licenses, rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise not prohibited by Section 7.4 and except, in the case
of clause (i) above (with respect to Subsidiaries) and clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (b) comply with all Contractual Obligations and Requirements
of Law, except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all Property and
systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies (not affiliated with the Parent)
insurance on all its Property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business (it being understood
that, to the extent consistent with prudent
58
business practices of Persons carrying on a similar business in a similar
location, a program of self-insurance for first and other loss layers may be
utilized).
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP (or SAP as applicable) and all Requirements of Law shall
be made of all dealings and transactions in relation to its business and
activities and (b) upon reasonable prior notice, permit representatives of any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Parent, the Borrower and its Subsidiaries
with officers and employees of the Parent, the Borrower and its Subsidiaries
and, so long as a representative of the Borrower is present during such
discussions (unless a Default has occurred and is continuing), with its
independent certified public accountants. It is understood that (i) any
information obtained by any Lender in any visit or inspection pursuant to this
Section shall be subject to the confidentiality requirements of Section 10.14,
(ii) the Parent and the Borrower may impose, with respect to any Lender or any
Affiliate of any Lender reasonably deemed by the Parent to be engaged
significantly in a business which is directly competitive with any material
business of the Parent, the Borrower and its Subsidiaries, reasonable
restrictions on access to proprietary information of the Parent, the Borrower
and its Subsidiaries and (iii) so long as no Default shall be continuing, the
Lenders will coordinate their visits through the Administrative Agent with a
view to preventing the visits provided for by this Section from becoming
unreasonably burdensome to the Parent, the Borrower and its Subsidiaries.
6.7 NOTICES. Promptly give notice to the Administrative Agent (it
being agreed that the Administrative Agent shall, upon receipt of such notice,
notify each Lender thereof) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Parent, the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between
the Parent, the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if adversely determined, as
the case may be, could reasonably be expected to have a Material Adverse
Effect;
(c) (i) any litigation or proceeding affecting the Parent, the
Borrower or any of its Subsidiaries (other than claims-related litigation
involving an Insurance Subsidiary) in which the amount involved is
$20,000,000 or more and not covered by insurance or in which material
injunctive or similar relief is sought and (ii) any claims-related
litigation affecting any Insurance Subsidiary in which the exposure (net of
reinsurance arrangements) of any Insurance Subsidiary is $20,000,000 or
more and for which it reasonably could be expected that liability would
result;
(d) the following events, as soon as possible and, in any event,
within 30 days after a Responsible Officer of the Borrower knows thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to
59
a Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had a Material Adverse
Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Parent, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects with,
and use reasonable efforts to ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and use reasonable
efforts to ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws. For purposes of this section 6.8(a), noncompliance by the Parent, the
Borrower and its Subsidiaries with any applicable Environmental Law shall be
deemed not to constitute a breach of this section provided that, (i) upon
learning of any actual or suspected noncompliance, each of them shall promptly
undertake reasonable efforts to achieve compliance, and (ii) in any case, such
non-compliance and any other noncompliance with Environmental Law, individually
or in the aggregate could not reasonably be expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all orders
and directives of all Governmental Authorities regarding Environmental Laws,
other than such orders or directions as have been properly challenged in good
faith; PROVIDED, that in any case such orders and directives could not
reasonably be expected to have a Material Adverse Effect.
(c) It is understood that Section 6.8 shall not apply to claims
under policies issued as part of the insurance business of the Borrower or its
Insurance Subsidiaries.
6.9 [RESERVED]
6.10 ADDITIONAL COLLATERAL, ETC. (a) With respect to any assets of
the type constituting Collateral under the Guarantee and Collateral Agreement
acquired after the Closing Date by the Parent, the Borrower or any of its
Non-Insurance Subsidiaries (other than assets acquired by an Excluded Foreign
Subsidiary) as to which the Administrative Agent, for the benefit of the
Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent reasonably deems necessary
to grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such assets and (ii) take all actions necessary to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected security
interest in such assets, including, without limitation, the filing of Uniform
60
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law.
(b) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Foreign Subsidiary), by the Parent, the Borrower or any of its
Non-Insurance Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent reasonably deems necessary to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected security
interest in all shares of Capital Stock of such new Subsidiary that are owned by
the Parent, the Borrower or any of its Subsidiaries, (ii) take all actions
required by Article 8 of the UCC to cause the Administrative Agent to acquire
"control" of such shares of Capital Stock within the meaning of Article 8 of the
UCC, (iii) cause such new Subsidiary (unless such Subsidiary is an Insurance
Subsidiary) (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary to grant to the Administrative Agent for the
benefit of the Lenders a perfected security interest in the Collateral described
in the Guarantee and Collateral Agreement with respect to such new Subsidiary,
and (iv) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Parent, the Borrower or any of its
Non-Insurance Subsidiaries (other than any Excluded Foreign Subsidiaries),
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement or such other documents as the
Administrative Agent reasonably deems necessary in order to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected security
interest in the Capital Stock of such new Subsidiary that is owned by the
Parent, the Borrower or any of its Subsidiaries (other than any Excluded Foreign
Subsidiaries), (provided that in no event shall more than 66% of the total
outstanding Capital Stock of any such new Excluded Foreign Subsidiary be
required to be so pledged), (ii) take all actions required by Article 8 of the
UCC to cause the Administrative Agent to acquire "control" of such shares of
Capital Stock within the meaning of Article 8 of the UCC or take such other
action as may be necessary or, in the reasonable opinion of the Administrative
Agent, desirable to perfect the Lien of the Administrative Agent thereon, and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) For avoidance of doubt, it is understood that no Insurance
Subsidiary shall be required to become a guarantor under the Guarantee and
Collateral Agreement or to create a security interest in any of its assets to
secure the obligations of the Borrower hereunder. It is understood that
perfection actions with respect to Property becoming Collateral after the
Closing Date will be consistent with actions required by Section 5.1 of the
Existing Credit Agreement with respect to Collateral of the same type on the
Closing Date, unless any change in law or customary practices require any
additional or different actions.
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6.11 SUBORDINATED SELLER NOTE. In the case of the Parent or the
Borrower, on or before the date which is eighteen months after the Closing Date,
(a) extend the maturity of the Subordinated Seller Note and interest thereon by
up to twelve months, (b) purchase the Subordinated Seller Note and interest
thereon for common or preferred stock of White Mountains or the Parent, (c)
repay or refinance the Subordinated Seller Note and interest thereon with (i)
the proceeds of the issuance of common or preferred stock of the Parent or White
Mountains, (ii) the proceeds of subordinated Indebtedness of the Parent or the
Borrower permitted pursuant to Section 7.2(h)(i) or Section 7.2(i), the maturity
date of which shall be later than the date which is six months after the final
maturity date of the Term Loans and the terms and conditions of which shall be
reasonably satisfactory to the Required Lenders, (iii) the proceeds of
Indebtedness of the Parent permitted by Section 7.2(h)(ii), (iv) the proceeds of
dividends paid by the Borrower to the Parent and permitted by Section 7.6(d) or
Section 7.6(e)(i)(3) or (v) cash of the Parent (it being understood that the
Subordinated Seller Note may be refinanced with a combination of (x) amounts
referred to in this clause (c)(v) and (y) any one or more of the proceeds
referred to in clauses (c)(i), (c)(ii), (c)(iii) and (c)(iv) above) or (d)
extend, repay or refinance the Subordinated Seller Note and interest thereon
through any combination of actions referred to in clauses (a), (b) and (c)
above; PROVIDED that if the maturity of the Subordinated Seller Note is extended
pursuant to clause (a) above, the Parent or the Borrower, on or before the date
which is the maturity date of the Subordinated Seller Note as so extended, shall
comply with either clause (b), clause (c) or clause (d) above.
SECTION 7 NEGATIVE COVENANTS
The Parent and the Borrower hereby jointly and severally agree that,
from and after the Restatement Effective Date and so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, each of the
Parent and the Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) INTEREST COVERAGE RATIO. Permit the Interest Coverage Ratio
for any period of four consecutive fiscal quarters of the Borrower to be less
than 2.5:1.00.
(b) LEVERAGE RATIO. Permit the Leverage Ratio as at the end of any
fiscal quarter of the Borrower ending on or after September 30, 2002 to exceed
35%.
(c) MAINTENANCE OF NET WORTH. Permit Consolidated Net Worth on any
date of determination thereof to be less than the sum of (without duplication)
(i) $1,630,000,000, (ii) 80% of the Net Proceeds of the issuance or sale of
equity securities by the Borrower consummated after the Closing Date or any
capital contribution made to the Borrower after the Closing Date by any holder
of its common stock and (iii) 50% of positive Consolidated Net Income of the
Borrower for each fiscal quarter ending after the Closing Date and on or prior
to such date of determination, MINUS 100% of cash distributions and dividends
paid, or shares repurchased or redeemed, by the Borrower after the Closing Date
and on or prior to such date of determination, as permitted by Section 7.6.
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(d) MAINTENANCE OF CAPITAL AND SURPLUS. Permit the combined
Capital and Surplus of the Insurance Subsidiaries on any date of determination
thereof to be less than the sum of (without duplication) (i) $2,000,000,000,
(ii) 80% of the Net Proceeds of the issuance or sale of equity securities by the
Insurance Subsidiaries, except for the issuance or sale of equity securities to
another Insurance Subsidiary, consummated after the Closing Date or any capital
contribution made to the Insurance Subsidiaries, except for any capital
contribution made by another Insurance Subsidiary, consummated after the Closing
Date by any holder of common stock thereof, and (iii) 50% of positive combined
Consolidated Net Income of the Insurance Subsidiaries for each fiscal quarter
ending after the Closing Date and on or prior to such date of determination,
MINUS (x) 100% of cash distributions and dividends paid by the Insurance
Subsidiaries, except for cash distributions and dividends paid to another
Insurance Subsidiary, after the Closing Date and on or prior to such date of
determination and (y) the Capital and Surplus of any Insurance Subsidiary
Disposed of, except for Capital and Surplus of any Insurance Subsidiary Disposed
of to another Insurance Subsidiary, after the Closing Date and prior to the date
of such determination.
(e) RISK BASED CAPITAL RATIO. Permit the Risk Based Capital Ratio
of any Material Insurance Subsidiary to be less than 250% with respect to the
fiscal years ending December 31, 2002 and December 31, 2003, 275% with respect
to the fiscal year ending December 31, 2004 and 300% for any fiscal year ending
thereafter.
7.2 LIMITATION ON INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
Create, incur, assume or suffer to exist any Indebtedness or, in the case of any
Subsidiary, issue any preferred stock, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness or preferred stock of (i) the Parent or the
Borrower to any Subsidiary, (ii) any Subsidiary Guarantor to the Parent,
the Borrower or any other Subsidiary and (iii) any Insurance Subsidiary to
any other Insurance Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $20,000,000 at any one time outstanding;
(d) [Reserved];
(e) Indebtedness and preferred stock outstanding as of the
Restatement Effective Date and listed on Schedule 7.2(e) and any
refinancings, refundings, renewals or extensions thereof (without any
increase in the principal amount thereof or any shortening of the maturity
of any principal amount thereof);
(f) [Reserved];
(g) Guarantee Obligations made in the ordinary course of business
by the Parent, the Borrower or any of its Subsidiaries of obligations of
the Borrower or any Subsidiary Guarantor;
63
(h) (i) Indebtedness of the Parent in respect of the Subordinated
Seller Note in an aggregate principal amount not to exceed $260,000,000 and
any refinancing thereof and interest thereon permitted pursuant to Section
6.11, PROVIDED, the maturity date of such refinancing shall be no earlier
than the date that is six months after the final maturity date of the Term
Loans or (ii) Indebtedness of the Parent to White Mountains (or its
subsidiaries) in an aggregate principal amount not to exceed $300,000,000,
the proceeds of which shall be used to repay the Subordinated Seller Note
(and interest thereon) and, to the extent of any remaining proceeds after
the repayment in full of the Subordinated Seller Note (and interest
thereon), to pay a dividend to White Mountains (or its subsidiaries) not
later than thirty (30) days after receiving such proceeds in an amount not
exceeding $75,000,000;
(i) Indebtedness of the Borrower in respect of any refinancing of
the Subordinated Seller Note permitted pursuant to Section 6.11, PROVIDED,
that (i) the maturity date of such Indebtedness shall be no earlier than
the date that is six months after the final maturity date of the Term Loans
and (ii) the interest rate with respect to such Indebtedness shall not be
greater than 13% per annum (it being understood and agreed that any
Indebtedness permitted by this Section 7.2(i) shall not be considered as
equity for the purposes of calculating compliance with the covenants set
forth in Section 7.1);
(j) Guarantee Obligations of the Borrower in respect of loans to
officers and directors of the Parent, the Borrower, White Mountains or any
of their respective Subsidiaries in an aggregate principal amount not
exceeding $15,000,000;
(k) Indebtedness in respect of Surplus Debentures in an aggregate
principal amount at any time outstanding not to exceed $200,000,000 issued
by any Insurance Subsidiaries;
(l) unsecured Indebtedness of the Parent or the Borrower in an
aggregate principal amount not to exceed $625,000,000, the maturity date of
which shall be later than the date that is six months after the final
maturity date of the Term Loans and the interest rate with respect to which
shall not be greater than 13% per annum, PROVIDED that, unless the Required
Prepayment Lenders and the Borrower shall otherwise agree, the net proceeds
of such Indebtedness are used immediately upon receipt thereof to prepay
the Term Loans (and after the Term Loans are repaid in full, to permanently
reduce the Revolving Credit Commitments);
(m) (i) Hedge Agreements in respect of Indebtedness otherwise
permitted hereby that bears interest at a floating rate and (ii) Hedge
Agreements in respect of one-third of the aggregate outstanding principal
amount of fixed rate Indebtedness otherwise permitted hereby, in each case
so long as such Hedge Agreements are not entered into for speculative
purposes;
(n) short-term Indebtedness of Insurance Subsidiaries to provide
short-term liquidity to facilitate claims payments in the event of
catastrophes, in an aggregate
64
principal amount not to exceed $400,000,000, which is secured by the assets
of Insurance Subsidiaries;
(o) Indebtedness of any Insurance Subsidiary incurred in the
ordinary course of its business or in securing insurance-related
obligations (that do not constitute Indebtedness) of such Insurance
Subsidiary and letters of credit issued for the account of any Insurance
Subsidiary in the ordinary course of its business or in securing
insurance-related obligations (that do not constitute Indebtedness) of such
Insurance Subsidiary;
(p) Indebtedness of Folksamerica in an aggregate principal amount
at any time outstanding of up to $100,000,000, the proceeds of which are
used to finance acquisitions;
(q) Indebtedness of the Parent, the Borrower or any Subsidiary
Guarantor to White Mountains in an aggregate principal amount not to exceed
$50,000,000; and
(r) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $150,000,000 at any one time outstanding,
PROVIDED that (i) not more than $50,000,000 of such Indebtedness permitted
under this paragraph (r) may mature prior to the final maturity of the Term
Loans, and (ii) not more than $50,000,000 of such Indebtedness permitted
under this paragraph (r) may be secured.
7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that secure payments that are not more than 60 days delinquent in
accordance with their terms or that are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of letters of credit, bids,
trade contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances that, in the aggregate, are not substantial in amount and
which do not in any case materially
65
detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any
of its Subsidiaries;
(f) Liens in existence as of the Closing Date listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(e), PROVIDED that no
such Lien is spread to cover any additional Property after the Closing Date
and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition
of fixed or capital assets, PROVIDED that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other than
the Property financed by such Indebtedness, or (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased;
(j) [Reserved];
(k) Liens on the property or assets of a corporation that becomes
a Subsidiary after March 16, 2001 securing Indebtedness otherwise
permitted, PROVIDED that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not expanded to cover any property or assets
of such corporation after the time such corporation becomes a Subsidiary
(other than after-acquired title in or on such property and proceeds of the
existing collateral in accordance with the instrument creating such Lien),
and (iii) the amount of Indebtedness secured thereby is not increased;
(l) licenses, leases or subleases permitted hereunder granted to
other Persons not interfering in any material respect in the business of
the Borrower or any of its Subsidiaries;
(m) attachment or judgment Liens in respect of judgments or
decrees that have not been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof and, in addition, attachment
or judgment Liens in an aggregate amount outstanding at any one time not in
excess of $5,000,000 (not paid or fully covered by insurance as to which
the relevant insurance company has acknowledged in writing coverage above
applicable deductibles);
(n) Liens arising from precautionary UCC financing statement
filings with respect to operating leases or consignment arrangements
entered into by the Borrower or any of its Subsidiaries in the ordinary
course of business;
66
(o) Liens in favor of a banking institution arising by operation
of law encumbering deposits (including the right of set-off) held by such
banking institutions incurred in the ordinary course of business and that
are within the general parameters customary in the banking industry;
(p) Liens on assets of an Insurance Subsidiary securing
Indebtedness of such Insurance Subsidiary permitted by Section 7.2(b),
7.2(n) or 7.2(o) or securing insurance-related obligations (that do not
constitute Indebtedness) of such Insurance Subsidiary;
(q) Liens securing Indebtedness permitted by Section 7.2(r) so
long as the aggregate fair market value of the assets subject to any such
Lien does not, at the time of the incurrence of such Lien, exceed 200% of
the amount of Indebtedness secured by such Lien and outstanding at such
time; and
(r) Liens not otherwise permitted by this Section 7.3 so long as
(i) the aggregate outstanding principal amount of the obligations secured
thereby does not at any time exceed $75,000,000 (less the aggregate
principal amount of Indebtedness secured by liens permitted by Section
7.3(q) at such time) and (ii) the aggregate fair market value of the assets
subject to any such Lien (determined, in the case of each such Lien, as of
the date such Lien is incurred) does not exceed 200% of the amount of the
obligations secured thereby.
7.4 LIMITATION ON FUNDAMENTAL CHANGES. In the case of the Parent
and the Borrower only, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its Property or
business, except that any Non-Insurance Subsidiary of the Borrower may be
merged, consolidated with or liquidated into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation).
7.5 [RESERVED]
7.6 LIMITATION ON RESTRICTED PAYMENTS. Declare or pay any dividend
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any Capital Stock of the Parent, the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Parent, the Borrower or any Subsidiary, or enter into
any derivatives or other transaction with any financial institution, commodities
or stock exchange or clearinghouse (a "DERIVATIVES COUNTERPARTY") obligating the
Parent, the Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of any such Capital Stock
(collectively, "RESTRICTED PAYMENTS"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor and any Insurance Subsidiary may make Restricted
Payments to any other Insurance Subsidiary;
(b) the Parent may make Restricted Payments in the form of common
stock of the Parent;
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(c) the Borrower may redeem the Berkshire Preferred Stock as
permitted pursuant to Section 7.8;
(d) the Borrower may pay a dividend to the Parent in an amount
equal to the proceeds of any issuance of Indebtedness used for the purpose
of refinancing the Subordinated Seller Note and interest thereon as
permitted pursuant to Section 6.11; PROVIDED that the amount of such
dividend received by the Parent is used to repay the Subordinated Seller
Note and interest thereon; and
(e) so long as no Default or Event of Default shall have occurred
and be continuing, (i) the Borrower may (1) make Restricted Payments to the
Parent in an aggregate amount not exceeding $20,000,000 in any fiscal year,
(2) pay dividends in an aggregate amount not exceeding in any fiscal year
the lesser of (a) the actual dividends required to be paid on the Berkshire
Preferred Stock and (b) $40,000,000, (3) at any time prior to the date that
is eighteen months after the Closing Date, pay a dividend to the Parent in
an amount not exceeding $45,000,000 to be used solely to repay the
Subordinated Seller Note, (4) pay a dividend to the Parent of up to
$20,000,000 with the proceeds of Indebtedness issued pursuant to Section
7.2(r), such dividend to be used by the Parent solely to defease or redeem
the Third Party Preferred Stock and (5) from and after the Restatement
Effective Date, pay dividends in an aggregate amount for all such dividends
not to exceed $55,000,000 and (ii) the Parent may (1) make Restricted
Payments to its shareholders in an aggregate amount not exceeding
$20,000,000 in any fiscal year, (2) from and after the Restatement
Effective Date, pay dividends to its shareholders in an aggregate amount
for all such dividends not to exceed $55,000,000 and (3) pay a dividend to
its shareholders in amount not exceeding $75,000,000 with the proceeds of
Indebtedness permitted by Section 7.2(h)(ii) to White Mountains within 30
days of receiving such proceeds.
7.7 LIMITATION ON INVESTMENTS. Make any advance, loan, extension
of credit (by way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt securities
of, or any assets constituting an ongoing business from, or make any other
investment in, any other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents and other obligations,
instruments or securities guaranteed or backed by the United States
Government which are comparable in quality to Cash Equivalents and have
maturities of not longer than five years;
(c) investments in short-term money market investments denominated
in currencies other than Dollars and comparable in quality and maturity to
investments constituting Cash Equivalents, and investments in other
obligations or instruments which, although not guaranteed or backed by the
United States Government, are comparable in quality to Cash Equivalents and
have maturities of not longer than five years;
(d) investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b), (e), (g), (j), (m) and (q);
68
(e) (i) loans and advances to officers, directors and employees of
the Parent, White Mountains and its Subsidiaries, the Borrower or any
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Parent, White Mountains and its Subsidiaries, the
Borrower and Subsidiaries of the Borrower not to exceed $15,000,000 at any
one time outstanding and (ii) investment of assets (which support deferred
compensation liabilities of Subsidiaries of White Mountains and CGU) in
White Mountains, not to exceed $47,500,000;
(f) [Reserved]
(g) investments in assets useful in the Borrower's business made
by the Borrower or any of its Subsidiaries with the proceeds of any
Reinvestment Deferred Amount;
(h) investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.2) by the Parent, the Borrower or any
of its Subsidiaries in the Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor;
(i) loans or guarantees of loans to insurance agents in the
ordinary course of business and loans to insurance agents outside the
ordinary course of business so long as the aggregate principal amount of
non-ordinary course loans does not exceed $25,000,000 in the aggregate at
any time;
(j) investments in, and additional capital contributions to,
Insurance Subsidiaries of the Borrower by the Borrower and the
Subsidiaries;
(k) investments by any Insurance Subsidiary in the ordinary course
of business in investment portfolio investments;
(l) investment of the proceeds of any Disposition in
insurance-related businesses;
(m) investments by Folksamerica in an aggregate amount not to
exceed $200,000,000 in the aggregate for any fiscal year in
insurance-related businesses;
(n) investments by the Borrower or any of its Subsidiaries in
insurance-related businesses in an aggregate amount (valued at cost at any
time invested) not to exceed $400,000,000 during the term of this
Agreement;
(o) in addition to Investments otherwise expressly permitted by
this Section, Investments by the Borrower or any of its Subsidiaries of any
type in an aggregate amount (valued at cost at any time invested) not to
exceed $50,000,000 during the term of this Agreement.
7.8 LIMITATION ON OPTIONAL PAYMENTS, REDEMPTIONS AND MODIFICATIONS
OF DEBT INSTRUMENTS AND PREFERRED STOCK, ETC. (a) Make or offer to make any
optional or voluntary payment, prepayment, repurchase or redemption of, or
otherwise voluntarily or optionally defease, (i) the Berkshire Preferred Stock
(except with the proceeds received from the exercise of warrants pursuant to the
Warrant Agreement), (ii) the Third Party Preferred Stock (other than
69
any such redemption or defeasance with the proceeds of dividends received from
the Borrower as permitted by Section 7.6(e)(i)(4) and/or the proceeds of common
or preferred equity issued by the Parent to White Mountains (or its
Subsidiaries)) or (iii) the Subordinated Seller Note (other than any such
purchase, repayment, prepayment or refinancing of the Subordinated Seller Note
permitted by Section 6.11), or segregate funds for any such payment, prepayment,
repurchase, redemption or defeasance, (b) amend, modify or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of the Berkshire Preferred Stock, the Third Party Preferred Stock
or the Subordinated Seller Note (other than any such amendment, modification,
waiver or other change which (i) would extend the maturity or reduce the amount
of any payment of principal thereof, reduce the rate, increase the rate up to
13% or extend the date for payment of interest or dividend thereon or relax any
covenant or other restriction applicable to the Parent, the Borrower or any of
its Subsidiaries and (ii) does not involve the payment of a consent fee), (c)
make any amendment of the Tax Sharing Agreement (other than any amendment
mandated by Insurance Regulations) that would make the terms thereof materially
less favorable to the Borrower or (d) amend its certificate of incorporation in
any manner reasonably determined by the Administrative Agent to be materially
adverse to the Lenders.
7.9 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the Parent,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise not prohibited under this Agreement and (b) upon fair and reasonable
terms no less favorable to the Parent, the Borrower or any Subsidiary Guarantor,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person that is not an Affiliate (provided that this Section
7.9 shall not prohibit any Restricted Payments not prohibited by Section 7.6).
7.10 [RESERVED]
7.11 LIMITATION ON CHANGES IN FISCAL PERIODS. Permit the fiscal
year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
7.12 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into or suffer to
exist or become effective any agreement that prohibits or limits the ability of
the Parent, the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
Guarantor, its obligations under the Guarantee and Collateral Agreement, other
than (a) this Agreement and the other Loan Documents, (b) any agreements
governing Investments in joint ventures, (c) any agreement containing customary
provisions prohibiting Liens upon certain intangible assets including licenses
and Intellectual Property, (d) any agreements governing any Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby), (e) any
agreements in effect on the date hereof and evidencing existing Indebtedness
permitted pursuant to Section 7.2, (f) any agreements pertaining to Property
that is subject to a sale agreement but has not yet been sold, (g) any
agreements or instruments creating Liens
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permitted by Section 7.3 (but only to the extent such agreements or instruments
apply to assets subject to such Liens) and (h) any operating lease agreements
containing customary provisions and entered into in the ordinary course of
business.
7.13 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
any other insurance-related business.
SECTION 8 EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan made
to the Borrower or Reimbursement Obligation owing by the Borrower when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan made to the Borrower or Reimbursement Obligation owing
to the Borrower, or any other amount payable by the Borrower hereunder or
under any other Loan Document, within five days after any such interest or
other amount becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made or furnished; or
(c) Any Loan Party shall default in the observance or performance
of any agreement contained in Section 6.4(a)(i) (with respect to the Parent
and the Borrower only), Section 6.4(a)(ii), Section 6.7(a) or Section 7, or
in Section 5 of the Guarantee and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days; or
(e) The Parent, the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness
(including, without limitation, any Guarantee Obligation, but excluding the
Loans and Reimbursement Obligations) on the scheduled or original due date
with respect thereto (after giving effect to any applicable grace periods);
or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in
the observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or beneficiary of such Indebtedness (or a
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trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or to become subject to or mandatory offer to purchase
by the obligor thereunder or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; PROVIDED, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless,
at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $25,000,000; or
(f) (i) The Parent, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Parent, the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the
Parent, the Borrower or any of its Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above that (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Parent, the Borrower or
any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in
the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Parent, the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Parent, the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, shall exist with respect to any Plan
or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the
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Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Parent, the Borrower or any of its Subsidiaries involving for the Parent,
the Borrower and its Subsidiaries taken as a whole a liability (to the
extent not paid or fully covered by insurance above applicable deductions)
of $25,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) Any of the security interests created pursuant to the Security
Documents shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 10.15), to be a valid, perfected
security interest, or any Loan Party or any Affiliate of any Loan Party
shall so assert; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than by reason of
the express release thereof pursuant to Section 10.15), to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) (i) Prior to any initial public offering of the Parent's
common stock, White Mountains shall cease to own, directly or indirectly
through one or more of its wholly-owned Subsidiaries, at least 50% of all
of the outstanding Capital Stock of the Parent, and (ii) after any initial
public offering of the Parent's Capital Stock, (x) White Mountains shall
cease to own, directly or indirectly through one or more of its
wholly-owned Subsidiaries, at least 25% of all of the outstanding Capital
Stock of the Parent, or (y) any Person or group of Persons other than White
Mountains shall own a greater percentage than White Mountains of all of the
outstanding Capital Stock of the Parent or (z) a majority of the directors
of the Parent ceases to be persons appointed or approved by White
Mountains; or
(l) (i) Any Material Insurance Subsidiary shall fail to comply
with any material term or provision of any Insurance Regulations pertaining
to fiscal soundness, solvency or financial condition; or (ii) an Insurance
Regulator shall assert in writing that it is taking administrative action
against any Material Insurance Subsidiary to revoke or modify any contract
of insurance, license, permit, certification, authorization, accreditation
or charter or to enforce the fiscal soundness, solvency or financial
provisions or requirements of any Insurance Regulations against any
Material Insurance Subsidiary and such Insurance Subsidiary shall have been
unable to cause such Insurance Regulator to withdraw such written notice
within five Business Days following receipt of such written notice by such
Insurance Subsidiary, in each of clauses (i) and (ii), if such event could
reasonably be expected to have a Material Adverse Effect.
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(m) The Subordinated Seller Note shall cease, for any reason, to
be validly subordinated to the obligations of the Loan Parties hereunder
and under the other Loan Documents, or any Loan Party, any Affiliate of any
Loan Party or the holder of the Subordinated Seller Note shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. In the case of all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
SECTION 9 THE ADMINISTRATIVE AGENT
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
the Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have
74
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Each Lender authorizes and directs the Administrative
Agent to execute and deliver the Guarantee and Collateral Agreement.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the Loan
Parties), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 10.6 and all actions required by such
Section in connection with such transfer shall have been taken. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of
Lenders
75
specified by this Agreement), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Loans.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent shall have received notice
from a Lender, the Parent or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent shall receive
such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement); provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Administrative Agent hereafter taken, including any review of the affairs of
a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Parent or the Borrower and without limiting the obligation of the Parent or
the Borrower to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
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Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately prior
to such date), for, and to hold the Administrative Agent harmless from and
against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from,
hold equity interests in and generally engage in any kind of business with any
Loan Party or its Affiliates as though the Administrative Agent were not an
Administrative Agent. With respect to its Loans made or renewed by it and with
respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not an Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 15 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 15 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After the retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
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9.10 AUTHORIZATION TO RELEASE LIENS AND GUARANTEES. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
10.15.
9.11 THE ARRANGER, THE SYNDICATION AGENT AND THE CO-DOCUMENTATION
AGENTS. The Arranger, the Syndication Agent and the Co-Documentation Agents, in
their respective capacities as such, shall have no duties or responsibilities,
and shall incur no liability, under this Agreement and the other Loan Documents.
SECTION 10 MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents (including amendments and restatements hereof or thereof)
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall:
(i) forgive or reduce the principal amount or extend the
final scheduled date of maturity of any Loan or Reimbursement Obligation,
extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest or fee payable hereunder
or extend the scheduled date of any payment thereof, or increase the amount
or extend the expiration date of any Commitment of any Lender, in each case
without the consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section,
reduce any percentage specified in the definition of Required Lenders or
Required Prepayment Lenders, amend, modify or waive the last sentence of
the definition of Required Lenders, or otherwise amend or modify the
definition of Required Lenders if the effect of such amendment or
modification would be to eliminate reference in such definition to Loans
and/or Commitments under any particular Facility, consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of
the Collateral or release the Parent or all or substantially all of the
Subsidiary Guarantors from their guarantee obligations under the Guarantee
and Collateral Agreement, in each case without the consent of all Lenders;
(iii) reduce the percentage specified in the definition of
Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility;
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(iv) amend, modify or waive any provision of Section 9
without the consent of the Administrative Agent;
(v) amend, modify or waive any provision of Section 2.6 or
2.7 without the written consent of the Swing Line Lender;
(vi) amend, modify or waive any provision of Section 2.18
without the consent of each Lender directly affected thereby;
(vii) amend, modify or waive any provision of Section 3
without the consent of the Issuing Lender;
(viii) amend, modify or waive (x) any provision of Sections
2.12 or 7.2(l) requiring by its terms the agreement of the Required
Prepayment Lenders or (y) any other provision hereof if the effect is to
subordinate one of the Facilities in right of payment to any other of the
Facilities, in either case without the consent of the Required Prepayment
Lenders; or
(ix) amend, modify or waive the provisions of the definition
of Interest Period regarding nine or twelve month Interest Periods for
Eurodollar Loans without the consent of each relevant Lender.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section; PROVIDED, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.
For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party to each relevant Loan Document (x) to
add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof to share ratably in the benefits of this
Agreement and the other Loan Documents with the Term Loans and Revolving
Extensions of Credit and the accrued interest and fees in respect thereof and
(y) to include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders, Required Prepayment Lenders and Majority
Revolving Facility Lenders.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy
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notice, when received, addressed (a) in the case of the Parent, the Borrower and
the Administrative Agent, as follows and (b) in the case of the Lenders, as set
forth in an administrative questionnaire delivered to the Administrative Agent
or on Schedule I to the Lender Addendum to which such Lender is a party or, in
the case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
The Parent: Fund American Enterprises Holdings, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
The Borrower: Fund American Companies, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
The Administrative Agent (in Xxxxxx Commercial Paper Inc.
respect of credit matters): 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent (in Xxxxxx Commercial Paper Inc.
respect of administrative agency 000 Xxxxxxx Xxxxxx
xxxxxxx): Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
Issuing Lender: As notified by the Issuing Lender to the
Administrative Agent and the Borrower
PROVIDED that any notice, request or demand to or upon the Administrative Agent,
the Issuing Lender or any Lender shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or
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statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans and other
extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the syndication and administration of
the Facilities (other than fees payable to syndicate members) and the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of
counsel to the Administrative Agent and the charges of Intralinks, (b) to pay or
reimburse each Lender and the Administrative Agent for all their costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, or reimburse each Lender and the Administrative Agent for, and hold
each Lender and the Administrative Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify or reimburse each Lender, the
Administrative Agent, its respective affiliates, and their respective officers,
directors, trustees, employees, advisors, agents and controlling persons (each,
an "Indemnitee") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Parent, the Borrower or any of its Subsidiaries or any of the Properties and the
fees and disbursements and other charges of legal counsel in connection with
claims, actions or proceedings by any Indemnitee against the Borrower hereunder
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. No Indemnified Person shall be liable for
use by unauthorized Persons of information sent through electronic media. It is
understood and agreed that, to the extent not precluded by a conflict of
interest (as reasonably determined by the relevant Indemnitee), each Indemnitee
shall endeavor to work cooperatively with the Borrower with a view towards
minimizing the legal and other expenses associated with any defense and any
potential settlement or judgment. To the extent reasonably practicable and not
disadvantageous to any Indemnitee (as reasonably determined by the relevant
Indemnitee), it is anticipated that a single counsel selected by the affected
Lenders may be used. Without limiting the foregoing, and to the extent permitted
by applicable law, the Borrower agrees not to
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assert and to cause its Subsidiaries not to assert, and hereby waives and agrees
to cause its Subsidiaries to so waive, all rights for contribution or any other
rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or nature
with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee, except to the extent such rights
result from the gross negligence or willful misconduct of such Indemnitee. All
amounts due under clauses (a), (b) and (c) of the first sentence of this Section
shall be payable not later than 30 days after written demand therefor.
Statements payable by the Borrower pursuant to this Section shall be submitted
to Xxxx X. Xxxxxxxx (Telephone No. (000) 000-0000) (Fax No. (000) 000-0000), at
the address of the Borrower set forth in Section 10.2, or to such other Person
or address as may be hereafter designated by the Borrower in a written notice to
the Administrative Agent. The agreements in this Section shall survive repayment
of the Loans and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Parent, the
Borrower, the Lenders, the Administrative Agent, all future holders of the Loans
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower or the
Administrative Agent (but with notice to the Administrative Agent), in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "PARTICIPANT") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would, pursuant to Section 10.1, require the consent of all Lenders
under any Facility in which such Participant has a participating interest. The
Borrower agrees that if amounts owing by the Borrower under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, PROVIDED that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
10.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
2.19, 2.20
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and 2.21 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if such Participant were a Lender; PROVIDED
that, in the case of Section 2.20, such Participant shall have complied with the
requirements of said Section, and PROVIDED, FURTHER, that no Participant shall
be entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender (an "ASSIGNOR") may, in accordance with applicable
law and upon written notice to the Administrative Agent, at any time and from
time to time assign to any Lender or any affiliate or Control Investment
Affiliate thereof or, with the consent of the Borrower and the Administrative
Agent and, in the case of any assignment of Revolving Credit Commitments, the
written consent of the Issuing Lender and the Swing Line Lender (which, in each
case, shall not be unreasonably withheld or delayed) (PROVIDED that the consent
of the Borrower need not be obtained with respect to (x) any assignment by the
Administrative Agent or by any Xxxxxx Entity and (y) any assignment of Term
Loans), to an additional bank, financial institution or other entity (an
"ASSIGNEE") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
E, executed by such Assignee and such Assignor (and, where the consent of the
Borrower, the Administrative Agent or the Issuing Lender or the Swing Line
Lender is required pursuant to the foregoing provisions, by the Borrower and
such other Persons) and delivered to the Administrative Agent for its acceptance
and recording in the Register; PROVIDED that (i) no such assignment of (x)
Tranche A Term Loans or (y) Revolving Credit Commitments and/or Revolving Credit
Loans to an Assignee (other than any Lender or any Control Investment Affiliate
thereof) shall be in an aggregate principal amount of less than $5,000,000
(other than in the case of an assignment of all of a Lender's interests under
this Agreement), (ii) no such assignment of (x) Tranche A Term Loans or (y)
Revolving Credit Commitments and/or Revolving Credit Loans (other than in the
case of an assignment of all of a Lender's interests under this Agreement) shall
result in such Lender's Commitments, together with the Commitments of such
Lender's Control Investment Affiliates, being reduced to less than $5,000,000,
(iii) no such assignment of Tranche B Term Loans or Tranche C Term Loans to an
Assignee (other than any Lender or any Control Investment Affiliate thereof)
shall be in an aggregate principal amount of less than $1,000,000 (other than in
the case of an assignment of all of a Lender's interests under this Agreement),
(iv) no such assignment of Tranche B Term Loans or Tranche C Term Loans (other
than in the case of an assignment of all of a Lender's interests under this
Agreement) shall result in such Lender's Tranche B Term Loans, together with the
Tranche B Term Loans of such Lender's Control Investment Affiliates, being
reduced to less than $1,000,000 (but more than $0) and (v) no such assignment of
Tranche C Term Loans (other than in the case of an assignment of all of a
Lender's interests under this Agreement) shall result in such Lender's Tranche C
Term Loan Commitments (or, after the Restatement Effective Date, Tranche C Term
Loans), together with the Tranche C Term Loan Commitments (or, after the
Restatement Effective Date, Tranche C Term Loans) of such Lender's Control
Affiliates, being reduced to less than $1,000,000 (but more than $0), in each
case unless otherwise agreed by the Borrower and the Administrative Agent. Any
such assignment need not be ratable as among the Facilities. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights
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and obligations of a Lender hereunder with Commitments and/or Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto, except as to Section 2.19, 2.20, 10.5 and 10.14 in respect of the
period prior to such effective date). Notwithstanding any provision of this
Section, the consent of the Borrower shall not be required for any assignment
that occurs at any time when any Event of Default shall have occurred and be
continuing.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled". The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Loans) at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (except that (x) no such registration and processing fee shall be payable
in the case of an Assignee which is an affiliate of the Assignor or a Person
under common management with the Assignor and (y) only one registration and
processing fee shall be payable in cases of contemporaneous multiple assignments
by an Assignor to Assignees which are Control Investment Affiliates of each
other), the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Administrative Agent and the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Revolving
Credit Note and/or applicable Term Notes, as the case may be, of the assigning
Lender) a new Revolving Credit Note and/or applicable Term Notes, as the case
may be, to the order of such Assignee in an amount equal to the Revolving Credit
Commitment and/or applicable Term Loans, as the case may be, assumed or acquired
by it pursuant to such Assignment and Acceptance and, if the Assignor has
retained a Revolving Credit Commitment and/or Term Loans, as the case may be,
upon request, a new Revolving Credit Note and/or Term Notes, as the case may be,
to the order of the Assignor in an
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amount equal to the Revolving Credit Commitment and/or applicable Term Loans, as
the case may be, retained by it hereunder. Such new Note or Notes shall be dated
the Restatement Effective Date and shall otherwise be in the form of the Note or
Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement provides for a payment to be allocated to a particular Lender or to
the Lenders under a particular Facility, if any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Parent or
the Borrower, any such notice being expressly waived by the Parent and the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Parent or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the Parent
or the Borrower, as the case may be. Each Lender agrees promptly to notify the
Parent or the Borrower, as the case may be, and the Administrative Agent after
any such setoff and application made by such Lender, PROVIDED that the failure
to give such notice shall not affect the validity of such setoff and
application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
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10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of the Parent, the Borrower, the Administrative
Agent, the Arranger and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Arranger, the Administrative Agent or any Lender relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of the Parent and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Parent or the Borrower, as the case may be, at its address
set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
10.13 ACKNOWLEDGMENTS. Each of the Parent and the Borrower hereby
acknowledges that:
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(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, the Administrative Agent nor any Lender
has any fiduciary relationship with or duty to the Parent or the Borrower
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Arranger, the
Administrative Agent and the Lenders, on one hand, and the Parent and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Arranger, the Administrative Agent and the Lenders or
among the Parent, the Borrower and the Lenders.
10.14 CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to keep confidential all non-public information (including oral
information) provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; PROVIDED that nothing herein
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Arranger, the Administrative Agent, any other Lender or
any Affiliate of any thereof (PROVIDED, that such Affiliates shall expressly
agree to be bound by the provisions of this Section, and the disclosing Lender
shall be responsible for insuring compliance by such Affiliate with this
Section), (b) to any Participant or Assignee (each, a "TRANSFEREE") or
prospective Transferee that expressly agrees to comply with confidentiality
provisions similar to the provisions of this Section, (c) to any of its
employees, directors, agents, attorneys, accountants and other professional
advisors, (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty expressly agrees to be bound by the
provisions of this Section or confidentiality provisions similar to the
provisions of this Section), (e) upon the request or demand of any Governmental
Authority having jurisdiction over it, (f) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the NAIC or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
10.15 RELEASE OF COLLATERAL AND GUARANTEE OBLIGATIONS.
(a) Notwithstanding anything to the contrary contained herein or
in any other Loan Document, upon request of the Borrower in connection with
any Disposition of Property permitted by the Loan Documents, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any affiliate of any Lender that is a party to any Specified
Hedge Agreement) take such actions as shall be required to release its
security interest in any Collateral being Disposed of in
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such Disposition, and to release any guarantee obligations under any Loan
Document of any Person being Disposed of in such Disposition, to the extent
necessary to permit consummation of such Disposition in accordance with the
Loan Documents.
(b) Notwithstanding anything to the contrary contained herein or
any other Loan Document, when all obligations of the Borrower hereunder and
under the other Loan Documents (other than obligations in respect of any
Specified Hedge Agreement) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon
request of the Borrower, the Administrative Agent shall (without notice to,
or vote or consent of, any Lender, or any affiliate of any Lender that is a
party to any Specified Hedge Agreement) take such actions as shall be
required to release its security interest in all Collateral, and to release
all guarantee obligations under any Loan Document, whether or not on the
date of such release there may be outstanding obligations in respect of
Specified Hedge Agreements. Any such release of guarantee obligations shall
be deemed subject to the provision that such guarantee obligations shall be
reinstated if after such release any portion of any payment in respect of
the obligations guaranteed thereby shall be rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or
as a result of the appointment of a receiver, intervener or conservator of,
or trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payment
had not been made.
10.16 ACCOUNTING CHANGES. In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then the Borrower and the Administrative Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for evaluating
the Borrower's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants, applicable
Insurance Regulators, the NAIC or, if applicable, the SEC.
10.17 DELIVERY OF LENDER ADDENDA AND RELEASE OF ADDITIONAL BORROWER.
(a) Each Tranche C Term Loan Lender shall become a party to this Agreement by
delivering to the Administrative Agent a Lender Addendum in the form of Exhibit
J-2, duly executed by such Lender, the Borrower and the Administrative Agent.
The Required Lenders (as defined in the Existing Credit Agreement) shall consent
to the amendments contained in this Agreement by delivering to the
Administrative Agent Lender Addenda in the form of Exhibit J-1, duly executed by
such Required Lenders.
(b) The Additional Borrower under (and as defined in) the Existing
Credit Agreement (i) shall execute this Agreement for the sole purpose of
consenting to the
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amendments expressed herein and (ii) from and after the Restatement Effective
Date, shall cease to be a party to this Agreement.
10.18 WAIVERS OF JURY TRIAL. THE PARENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
FUND AMERICAN ENTERPRISES HOLDINGS,
INC. (f/k/a TACK HOLDING CORP.)
By:
--------------------------------------
Name:
Title:
FUND AMERICAN COMPANIES, INC. (f/k/a
TACK ACQUISITION CORP.)
By:
--------------------------------------
Name:
Title:
WHITE MOUNTAINS INSURANCE GROUP,
LTD.
By:
--------------------------------------
Name:
Title:
XXXXXX BROTHERS INC.
as Arranger
By:
--------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER, INC.
as Administrative Agent
By:
--------------------------------------
Name:
Title:
FLEET NATIONAL BANK,
as Syndication Agent
By:
--------------------------------------
Name:
Title:
BANK OF AMERICA, NA,
as Co-Documentation Agent
By:
--------------------------------------
Name:
Title:
BANK ONE, N.A.,
as Co-Documentation Agent
By:
--------------------------------------
Name:
Title:
SCHEDULE 4.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
NONE
SCHEDULE 4.14
SUBSIDIARIES
Jurisdiction of Percent Type of
Subsidiary Organization Owned by Ownership Entity
----------------------- ------------------ ------------------- ----------- ------
OneBeacon Insurance Delaware Fund American 100% LLC
Group LLC Companies, Inc.
OneBeacon Asset Delaware OneBeacon Insurance 100% Corp
Management, Inc. Group LLC
OneBeacon Finance Delaware OneBeacon Insurance 100% Corp
Corporation Group LLC
Beacon Advertising Delaware OneBeacon Insurance 100% Corp
Corporation Group LLC
OneBeacon Risk Delaware OneBeacon Insurance 100% Corp
Management, Inc. Group LLC
OneBeacon Lloyd's, Inc. Texas OneBeacon Insurance 100% Corp
Group LLC
A.W.G. Xxxxx, Inc. Massachusetts OneBeacon Insurance 80% Corp
Group LLC (*)
TCH Insurance Agency, Massachusetts OneBeacon Insurance 100% Corp
Inc. Group LLC
National Farmers Union Colorado OneBeacon Insurance 100% Ins Co
Property and Casualty Group LLC
Company
National Farmers Union Colorado National Farmers 100% Ins Co
Standard Insurance Union Property and
Company Casualty Company
Houston General Texas OneBeacon Insurance 100% Ins Co
Insurance Company Group LLC
Traders & General Texas Houston General 100% Ins Co
Insurance Company Insurance Company
Traders & Pacific Delaware Houston General 100% Ins Co
Insurance Company Insurance Company
Houston General Lloyds Texas Houston General 100% Ins Co
Insurance Company
Potomac Insurance Pennsylvania OneBeacon Insurance 100% Ins Co
Company Group LLC
The Camden Fire New Jersey OneBeacon Insurance 100% Ins Co
Insurance Association Group LLC
The Northern Assurance Massachusetts The Camden Fire 100% Ins Co
Company of America Insurance Association
OneBeacon Midwest Wisconsin The Northern 100% Ins Co
Insurance Company Assurance Company of
America
Pennsylvania General Pennsylvania OneBeacon Insurance 100% Ins Co
Insurance Company Group LLC
American Employers' Massachusetts Pennsylvania General 100% Ins Co
Insurance Company Insurance Company
American Central Missouri American Employers' 100% Ins Co
Insurance Company Insurance Company
OneBeacon Services Delaware OneBeacon Insurance 100% Corp
Corporation Group LLC
OneBeacon Insurance Pennsylvania OneBeacon Insurance 100% Ins Co
Company Group LLC
Folksamerica Holding New York OneBeacon Insurance 100% Corp
Company, Inc. Company
Esurance, Inc. California Folksamerica Holding 100% Corp
Company, Inc.
Esurance Insurance California Esurance, Inc. 100% Corp
Services, Inc.
International American Delaware Folksamerica Holding 100% Corp
Management Company Company, Inc.
IA Management Company Delaware Folksamerica Holding 100% Corp
Company, Inc.
British Insurance Cayman Islands Folksamerica Holding 100% Ins Co
Company of Cayman Company, Inc.
Folksamerica New York Folksamerica Holding 100% Ins Co
Reinsurance Company Company, Inc.
C-F Insurance Company California Folksamerica 100% Ins Co
Reinsurance Company
PCA Property & Casualty Oklahoma Folksamerica 100% Ins Co
Insurance Company Reinsurance Company
Imperial Casualty and Nebraska Folksamerica 100% Ins Co
Indemnity Company Reinsurance Company
Folksamerica Specialty Connecticut Folksamerica Holding 100% Corp
Underwriting, Inc. Company, Inc.
American Centennial Delaware Folksamerica 100% Ins Co
Insurance Company Reinsurance Company
Peninsula Insurance Maryland Folksamerica Holding 100% Ins Co
Company Company, Inc.
Peninsula Indemnity Maryland Peninsula Insurance 100% Ins Co
Company Company
National Credit Plan Maryland Peninsula Insurance 100% Corp
Corp. Company
Fester, Xxxxxxxxxx & New York Folksamerica Holding 100% Corp
Xxxxxxx, Ltd. Company, Inc.
FFH Management Corp. New Jersey Fester, Xxxxxxxxxx & 100% Corp
Xxxxxxx, Ltd.
Potomac Insurance Illinois OneBeacon Insurance 100% Ins Co
Company of Illinois Company
The Employers' Fire Massachusetts OneBeacon Insurance 100% Ins Co
Insurance Company Company
Massachusetts Homeland Massachusetts The Employers' Fire 100% Ins Co
Insurance Company Insurance Company
General Assurance New York OneBeacon Insurance 100% Ins Co
Company Company
Homeland Insurance New York OneBeacon Insurance 100% Ins Co
Company of New York Company
PG Insurance Company of New York OneBeacon Insurance 100% Ins Co
New York Company
Esurance Insurance Oklahoma OneBeacon Insurance 100% Ins Co
Company Company
Farmers and Merchants Oklahoma Esurance Insurance 100% Ins Co
Insurance Company Company
Midwestern Insurance Oklahoma Farmers and Merchants 99.9% Ins Co
Company Insurance Company
Esurance Property and California OneBeacon Insurance 100% Ins Co
Casualty Insurance Company
Company
OneBeacon America Massachusetts OneBeacon Insurance 100% Ins Co
Insurance Company Company
York Insurance Maine OneBeacon 100% Ins Co
Company of Maine America Insurance
Company
OneBeacon Lloyd's of Texas OneBeacon America 100% Ins Co
Texas Insurance Company
OneBeacon Leasing, Inc. Delaware OneBeacon America 100% Corp
Insurance Company
OneBeacon Investors Co. Delaware OneBeacon Leasing, 100% Corp
# 15 Inc.
OneBeacon Investors Co. Delaware OneBeacon Leasing, 100% Corp
# 16 Inc.
OneBeacon Investors Co. Delaware OneBeacon Leasing, 100% Corp
# 18 Inc.
OneBeacon Investors Co. Delaware OneBeacon Leasing, 100% Corp
# 21 Inc.
Homeland Central Iowa OneBeacon Insurance 50.18% Ins Co
Insurance Company Company
OneBeacon Insurance 26.72%
Group LLC
The Camden Fire 23.10%
Insurance Association
United Security Iowa Homeland Central 99.775% Ins Co
Insurance Company Insurance Company
Western States Illinois Homeland Central 100% Ins Co.
Insurance Company Insurance Company
New Jersey Skylands Delaware OneBeacon Insurance 100% Corp
Management Corporation Group LLC
Tuckerman Capital L.P. Delaware OneBeacon Insurance 96% LP
Company
Xxxxx, LLC Delaware Tuckerman 69% LLC
Capital L.P. (**)
Bri-Mar Manufacturing, Delaware Tuckerman Capital 67% LLC
LLC L.P. (**)
* - All of the stockholders of A.W.G. Xxxxx, Inc. are subject to the provisions
of a Stockholders Agreement dated August 6, 1993 as amended, which includes
various put and call provisions.
** - Tuckerman Capital LP, a capital investment fund, owns these companies. Part
of Tuckerman's acquisition structuring utilizes options, warrants and
convertible securities for various purposes (including those used for executive
compensation).
SCHEDULE 4.18
UCC FILING JURISDICTIONS
Grantor Offices UCC Filing Offices
------------------------------ ------------------ --------------------------------
Fund American Enterprises One Beacon Street UCC Division
Holdings, Inc. Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Grantor Offices UCC Filing Offices
------------------------------ ------------------ --------------------------------
Fund American Companies, Inc. Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Insurance Group LLC Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Grantor Offices UCC Filing Offices
------------------------------ ------------------ --------------------------------
OneBeacon Asset Management, One Beacon Street UCC Division
Inc. Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Finance Corporation Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Grantor Offices UCC Filing Offices
------------------------------ ------------------ --------------------------------
Beacon Advertising Corporation One Beacon Street UCC Division
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
OneBeacon Risk Management, One Beacon Street UCC Division
Inc. Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Grantor Offices UCC Filing Offices
------------------------------ ------------------ --------------------------------
OneBeacon Lloyd's Inc. 0000 Xxxxx Xxxxxxx XXX Xxxxxxx
Expressway Secretary of State
Xxxxxx, XX 00000 X.X. Xxx 00000
Xxxxxx Xxxxxx Xxxxxx, XX 00000-0000
Dallas County Clerk's Office
Records Bldg., 2nd Floor
000 Xxxx Xxxxxx
Xxxxxx, XX 00000-0000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
TCH Insurance Agency, Inc. Xxx Xxxxxx Xxxxxx XXX Xxxxxxxx
Xxxxxx, XX 00000 Secretary of the Commonwealth
Suffolk County One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
Grantor Offices UCC Filing Offices
------------------------------ ------------------ --------------------------------
OneBeacon Services Corporation One Beacon Street UCC Division
Xxxxxx, XX 00000 Secretary of State
Suffolk County X.X. Xxx 000
Xxxxx, XX 00000
UCC Division
Secretary of the Commonwealth
One Ashburton Place
Room 1711
Xxxxxx, XX 00000
UCC Recorder
Suffolk County Register of Deeds
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
UCC Recorder
Xxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxx 000
0 Xxxx Xxxx Xxxxx
Xxxxxx, Xx 00000
New Jersey Skylands Basking Ridge, NJ UCC Division
Management Corporation Xxxxxxxxx xx Xxxxx
X.X. Xxx 000
Xxxxx, XX 00000
SCHEDULE 7.2(e)
INDEBTEDNESS & PREFERRED STOCK
1. $25,000,000 Seller Note issued from Folksamerica to the California Farm
Bureau Federation in conjunction with the acquisition of C-F Insurance
Company on September 25, 2001. The note is due on September 25, 2005 and
bears interest at 7%. The principal is contingent on lack of adverse
reserve development and other guarantees relating to the acquisition of
C-F Insurance Company.
2. $7,000,000 undertaking of Folksamerica Holding Company, Inc. for the
benefit of Xxxxxxx & Partners Connecticut Fund III, LP. The note is due
on October 31, 2002 and bears interest at the prime rate of interest
minus 1%.
SCHEDULE 7.3(f)
LIENS SECURING DEBT LISTED ON SCHEDULE 7.2(C)
NONE
