its Material Subsidiaries in their
respective Subsidiaries, (v) Hedging Agreements in the ordinary course of the
Borrower's or such Subsidiary's business, (vi) as to each Insurance Subsidiary,
investments that would be permitted under the investment provisions of its
Applicable Insurance Code administered and enforced by its Applicable Insurance
Regulatory Authority, and (vii) as to the Borrower, any investment that,
pursuant to clause (vi), above, would be permitted to be made by any of its
Insurance Subsidiaries.
SECTION 6.05.
ASSET SALES. THE BORROWER SHALL NOT, AND SHALL NOT PERMIT
ANY OF ITS MATERIAL SUBSIDIARIES TO, SELL, TRANSFER, LEASE OR OTHERWISE DISPOSE
OF ANY PROPERTY, INCLUDING ANY EQUITY INTEREST OWNED BY IT, NOR WILL ANY
MATERIAL SUBSIDIARY ISSUE ANY ADDITIONAL EQUITY INTEREST IN SUCH SUBSIDIARY,
EXCEPT:
(a)
sales of used or surplus equipment and Permitted Investments in
the ordinary course of business;
(b)
Sale-Leaseback Transactions permitted pursuant to Section 6.07;
and
(c)
other sales of assets so long as (i) immediately before and after
giving effect thereto, no Default shall have occurred and be continuing, and
(ii) the Senior Debt Rating by each Rating Agency immediately following the
sale's becoming known publicly is not more than one level or category lower than
the Senior Debt Rating by such Rating Agency immediately prior to the sale's
becoming known publicly.
Section 6.06.
Ceded Reinsurance. The Borrower shall not, nor shall it
permit any other Insurance Subsidiary to:
(A)
ENTER INTO ANY REINSURANCE AGREEMENT IN RESPECT OF CEDED RISK IN
EXCESS OF $10,000,000 WITH ANY PERSON OTHER THAN (I) ANOTHER INSURANCE
SUBSIDIARY, (II) ANY PERSON FOR WHICH THE MOST RECENTLY PUBLISHED RATING BY BEST
IS "B++" OR HIGHER OR, IF SUCH PERSON IS NOT RATED BY BEST, WHICH HAS A
STATUTORY SURPLUS (OR THE EQUIVALENT THEREOF) OF NOT LESS THAN $500,000,000,
(III) ANY PERSON THAT POSTS SECURITY UNDER SUCH REINSURANCE AGREEMENT IN AN
AMOUNT EQUAL TO THE TOTAL LIABILITIES ASSUMED BY SUCH PERSON, THROUGH A LETTER
OF CREDIT
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ISSUED BY AN "AUTHORIZED BANK" (AS SUCH TERM IS DEFINED BY THE APPLICABLE
INSURANCE REGULATORY AUTHORITY) OR CASH COLLATERAL DEPOSIT OR (IV) ANY OTHER
REINSURERS ACCEPTABLE TO THE ADMINISTRATIVE AGENT, PROVIDED HOWEVER, THAT FOR
PURPOSES OF THE FOREGOING CLAUSE (II), ANY "NA" DESIGNATION SHALL NOT BE
CONSIDERED A RATING OF BEST;
(B)
ENTER INTO ANY REINSURANCE AGREEMENT OR REINSURANCE AGREEMENTS
WITH LLOYD'S OF LONDON IF THE AGGREGATE AMOUNT OF REINSURANCE CEDED THEREBY
WOULD EXCEED 15% OF THE AGGREGATE PREMIUM VOLUME OF REINSURANCE CEDED BY THE
INSURANCE SUBSIDIARIES.
(C)
ENTER INTO ANY SURPLUS RELIEF REINSURANCE EXCEPT WITH ANOTHER
INSURANCE SUBSIDIARY; PROVIDED THAT THE INSURANCE SUBSIDIARIES IDENTIFIED ON
SCHEDULE 6.06 MAY CONTINUE TO MAINTAIN (AND FROM TIME TO TIME REPLACE SO LONG AS
THE AMOUNT THEREOF DOES NOT INCREASE) THE SURPLUS RELIEF REINSURANCE IN EFFECT
ON THE DATE HEREOF AND DESCRIBED ON SCHEDULE 6.06; OR
(d)
enter into any Reinsurance Agreement or Reinsurance Agreements if
such Reinsurance Agreements will result in a 20% or more reduction of net
premium volume for the Insurance Subsidiaries in any 12-month