Document:

ex10.htm

SIXTH AMENDMENT TO AGREEMENT

 

THIS SIXTH AMENDMENT TO AGREEMENT (this “Amendment”) is made as of October 29, 2010, by and among:

 

(a)           GALLARUS MEDIA HOLDINGS, INC., a Delaware corporation (“Holdings”);

 

(b)           NETWORK COMMUNICATIONS, INC., a Georgia corporation, in its capacities as “Borrower” under the Senior Revolving Loan Agreement (as defined below) (in such capacity, “Revolving Borrower”) and “Borrower” under the Senior Term Loan Agreement (as defined below) (in such capacity, “Term Borrower”; each of Revolving Borrower and Term Borrower, “Borrower”; each of Holdings and Borrower, a “Credit Party” and, collectively, the “Credit Parties”);

 

(c)           TORONTO DOMINION (TEXAS) LLC, in its capacities as “Administrative Agent” and “Collateral Agent” under the Senior Revolving Loan Agreement and “Revolving Loan Administrative Agent” under the Senior Guarantee, Collateral, and Intercreditor Agreement (in such capacities, “Revolving Agent”);

 

(d)           TORONTO DOMINION (TEXAS) LLC, in its capacities as “Administrative Agent” and “Collateral Agent” under the Senior Term Loan Agreement and Term Loan Administrative Agent under the Senior Guarantee, Collateral, and Intercreditor Agreement (in such capacities, “Term Agent”);

 

(e)           TORONTO DOMINION (TEXAS) LLC, in its capacity as “Collateral Agent,” under the Senior Guarantee, Collateral, and Intercreditor Agreement (as defined below) (in such capacity, “Collateral Agent”);

 

(f)           TORONTO DOMINION (TEXAS LLC, in its capacity as “Swingline Lender” under the Senior Revolving Loan Agreement (“Swingline Lender”);

 

(g)           THE TORONTO DOMINION BANK, NEW YORK BRANCH, in its capacity as “Issuing Bank” under the Senior Revolving Loan Agreement (“Issuing Bank”);

 

(h)           the Persons party hereto as “Senior Revolving Lenders” (each, a “Senior Revolving Lender” and, collectively, the “Senior Revolving Lenders”); and

 

(i)           the Persons party hereto as “Senior Term Lenders” (each, a “Senior Term Lender” and, collectively, the “Senior Term Lenders”; each of the Senior Revolving Lenders and the Senior Term Lenders, a “Senior Lender” and, collectively, the “Senior Lenders”).

 

RECITALS:

 

WHEREAS, Holdings, Revolving Borrower, Revolving Agent, the Senior Revolving Lenders, Swingline Lender, and Issuing Bank are party to that certain Revolving Loan Agreement dated as of July 20, 2007, as amended by that certain First Amendment to Revolving Loan Credit Agreement dated as of June 10, 2008, that certain Second Amendment to Revolving Loan Credit Agreement dated as of December 4, 2008, and that certain Third Amendment to Revolving Loan Credit Agreement dated as of May 4, 2009 (as the same may have been amended, restated, supplemented, or otherwise modified from time to time, the “Senior Revolving Loan Agreement”);

 

WHEREAS, Holdings, Term Borrower, Term Agent, and the Senior Term Lenders are party to that certain Term Loan Agreement dated as of July 20, 2007, (as the same may have been amended, restated, supplemented, or otherwise modified from time to time, the “Senior Term Loan Agreement”; each of the Senior Revolving Loan Agreement and the Senior Term Loan Agreement, a “Senior Loan Agreement” and, collectively, the “Senior Loan Agreements”);

 

WHEREAS, Holdings, Borrower, Revolving Agent, Term Agent, and Collateral Agent are party to that certain Guarantee, Collateral and Intercreditor Agreement dated as of July 20, 2007 (as the same may have been amended, restated, supplemented, or otherwise modified from time to time, the “Senior Guarantee, Collateral, and Intercreditor Agreement”; each of the Senior Revolving Loan Agreement, the Senior Guarantee, Collateral, and Intercreditor Agreement, and the “Loan Documents” (as such term is defined and used in the Senior Revolving Loan Agreement), a “Senior Revolving Loan Document” and, collectively, the “Senior Revolving Loan Documents”; each of the Senior Term Loan Agreement, the Senior Guarantee, Collateral, and Intercreditor Agreement, and the “Loan Documents” (as such term is defined and used in the Senior Term Loan Agreement), a “Senior Term Loan Document” and, collectively, the “Senior Term Loan Documents”; each of the Senior Revolving Loan Documents and the Senior Term Loan Documents, a “Senior Loan Document” and, collectively, the “Senior Loan Documents”);

 

WHEREAS, Borrower issued its 10-3/4% Senior Notes due 2013 in an initial aggregate principal amount of $175,000,000 (the “Senior Notes”), pursuant to that certain Indenture dated as of November 30, 2005, by and between Borrower and Wells Fargo Bank N.A., in its capacity as “Trustee” (“Trustee”); such indenture, as the same may have been amended, restated, supplemented, or otherwise modified from time to time, the “Senior Notes Indenture”);

 

WHEREAS, Borrower has notified Agent and the Senior Lenders that it is currently in discussions with certain holders of the Senior Notes regarding a potential restructuring of the Senior Notes and a deleveraging of the Borrower’s balance sheet (the “Senior Notes Restructuring”);

 

WHEREAS, Borrower has notified Agent and the Senior Lenders that Borrower (a) believes it is not in Borrower’s best interests to make the payment of interest on the Senior Notes due on June 1, 2010, as required by the terms of the Senior Notes Indenture and (b) did not make such payment (the failure to make such payment, the “Senior Notes Interest Payment Default”);

 

WHEREAS, (i) the Senior Notes Interest Payment Default constitutes an Event of Default under clause (f) of Article VII of the Senior Revolving Loan Agreement and (ii) Revolving Agent, with the consent of the “Required Lenders” (as defined in the Senior Revolving Loan Agreement), by notice to the Borrower, declared the “Loans” (as defined in the Senior Revolving Loan Agreement) and all other amounts and liabilities to be due and payable and such have not been paid, causing the occurrence of an Event of Default under clause (b) of Article VII of the Senior Revolving Loan Agreement (the failure to make such payment, the “Senior Revolving Loan Maturity Payment Default”, and together with the Senior Notes Interest Payment Default, the “Specified Senior Revolving Loan Events of Default”);

 

WHEREAS, (i) the Senior Notes Interest Payment Default constituted an Event of Default under the clause (f) of Article VII of the Senior Term Loan Agreement and (ii) Term Agent, with the consent of the “Required Lenders” (as defined in the Senior Term Loan Agreement), by notice to the Borrower, declared the “Loans” (as defined in the Senior Term Loan Agreement) and all other amounts and liabilities to be due and payable and such have not been paid, causing the occurrence of an Event of Default under clause (b) of Article VII of the Senior Term Loan Agreement (the failure to make such payment, the “Senior Term Loan Maturity Payment Default”, and together with the Senior Notes Interest Payment Default, the “Specified Senior Term Loan Events of Default”);

 

WHEREAS, the existence or occurrence of (i) the Specified Senior Revolving Loan Events of Default, (ii) the Specified Senior Term Loan Events of Default, (iii) other Defaults and/or Events of Default and potential Defaults and/or Events of Default as specified on Schedule A to the Agreement as of its date of execution, (iv) other Defaults and/or Events of Default and potential Defaults and/or Events of Default as specified on Schedule A attached to the First Amendment (as defined below), (v) other Defaults and Events of Default as specified on Schedule A attached to the Second Amendment (as defined below), and (vi) other Defaults and Events of Default as specified on Schedule A attached to the Third Amendment (as defined below), may, in turn, cause other “Events of Default” under the Senior Loan Documents to occur on account of cross-defaults to other agreements evidencing indebtedness of a Credit Party (each of such other “Events of Default” under the Senior Loan Documents, a “Specified Senior Event of Default” and, collectively, the “Specified Senior Events of Default”);

 

  

  

  

 

WHEREAS, to facilitate the Senior Notes Restructuring and any related restructuring of any Credit Party’s balance sheet, each Credit Party, Revolving Agent, Term Agent, Collateral Agent, the Senior Lenders, Swingline Lender, and Issuing Bank entered into the Agreement  dated as of June 1, 2010, as amended by amendment dated June 18, 2010 (the “First Amendment”), by second amendment dated as of July 9, 2010 (the “Second Amendment”), by third amendment dated as of July 30, 2010 (the “Third Amendment”), by fourth amendment dated as of August 31, 2010 (the “Fourth Amendment”) and by fifth amendment dated as of September 30, 2010 (the “Fifth Amendment”) (as the same may be further amended, supplemented or otherwise modified from time to time, the “Agreement”) pursuant to which Revolving Agent, Term Agent, Collateral Agent, Senior Revolving Lenders, Senior Term Lenders, Swingline Lender, and Issuing Bank agreed to forbear certain rights they may have with respect to Controlled Accounts (as defined below) in respect of the Specified Senior Events of Default on the terms and conditions set forth in the Agreement;

 

WHEREAS, each Credit Party has requested that Revolving Agent, Term Agent, Collateral Agent, Senior Revolving Lenders, Senior Term Lenders, Swingline Lender, and Issuing Bank amend the Agreement to extend the drop-dead date in the definition of “Termination Event” in the Agreement to November 30, 2010;

 

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by the parties hereto, each Credit Party, Revolving Agent, Term Agent, and Collateral Agent, the Senior Revolving Lenders party hereto, the Senior Term Lenders party hereto, Swingline Lender, and Issuing Bank hereby covenant and agree as follows:

 

1. Definitions; Incorporation of Recitals.

 

(a) Unless otherwise specifically defined herein, each term used herein which is defined in a Senior Loan Agreement shall have the meaning assigned to such term therein.  Each reference to “hereof,” “hereunder,” “herein,” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in any Senior Loan Document shall from and after the date hereof refer to such Senior Loan Document as supplemented and modified hereby, to the extent applicable.

 

(b) Each of the Recitals to this Amendment is incorporated herein by this reference.

 

2. Specified Senior Events of Default; Certain Acknowledgments by Credit Parties.  Each Credit Party hereby acknowledges and agrees with respect to each of the Specified Senior Events of Default that (a) such Specified Senior Event of Default will constitute a continuing “Event of Default” under each of the Senior Loan Agreements and that each Credit Party hereby is deemed to have received adequate and sufficient notice thereof; (b) as a result of and during the continuance of the Specified Senior Events of Default, none of Revolving Agent, any Senior Revolving Lender, Swingline Lender, nor Issuing Bank has any obligation to make or issue any advances, loans, financial accommodations, or extensions of credit to any Credit Party under any Senior Revolving Loan Document; (c) as a result of the Specified Senior Events of Default, none of Revolving Agent, Term Agent, Collateral Agent, any Senior Revolving Lender, any Senior Term Lender, Swingline Lender, or Issuing Bank will have any obligation to forbear the exercise of any of its rights or remedies under any Senior Loan Documents to which it is a party or applicable law; and (d) as a result of the Specified Senior Events of Default, each of Revolving Agent, Term Agent, and Collateral Agent, the Senior Revolving Lenders, any Senior Term Lender, Swingline Lender, and Issuing Bank will have the right to exercise each and every right and remedy afforded it under and in accordance with the terms of the Senior Loan Documents to which it is a party and applicable law.

 

3. Amendment to the Agreement.   As of the Effective Date (as defined below), the definition of “Termination Event” in Section 3(c) of the Agreement is hereby amended by deleting the date “October 29, 2010” in clause (i) thereof and replacing it with the date “November 30, 2010”.

 

4. Representations and Warranties.  To induce each of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, and Issuing Bank to enter into this Agreement, each Credit Party hereby represents and warrants to each of them on the Effective Date as follows (with each of the following representations and warranties surviving the effectiveness of the Agreement and the expiration or termination of the Specified Period and the Agreement):

 

(a) Such Credit Party has all requisite corporate power and authority to execute and deliver this Amendment and to perform its obligations hereunder;

 

(b) Such Credit Party’s execution and delivery of this Amendment and the performance of its obligations hereunder have been duly authorized by all requisite corporate and, if required, stockholder action;

 

(c) This Amendment has been duly executed and delivered by such Credit Party and constitutes a legal, valid, and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

 

(d) As of the Effective Date, no “Event of Default” under any Senior Loan Document exists and no Credit Party anticipates as of the Effective Date any “Event of Default” under any Senior Loan Document to occur before the termination or expiration of the Specified Period (other than Specified Senior Events of Default);

 

(e) As of October 29, 2010, (i) the aggregate outstanding principal amount of all “Loans” under the Senior Revolving Loan Agreement is $6,000,000.00; (ii) the aggregate “L/C Exposure” existing under the Senior Revolving Loan Agreement is $0.00; and (iii) the aggregate outstanding principal amount of all “Loans” under the Senior Term Loan Agreement is $67,791,810.00; and

 

(f) Schedule B, attached hereto and made a part hereof, sets forth the account number of each Credit Party’s deposit accounts, together with the name and address of the depository institution at which each such deposit account is maintained, a brief description of the purposes to which such Credit Party or subsidiary puts each such deposit account (e.g., payroll, benefits, operating account, disbursement account, etc.), and the account balance of each such deposit account as of October 28, 2010.

 

5. Conduct of Each Agent and Others; Absence and Waiver of Defenses; Release of Claims; Etc.

 

(a) Each Credit Party acknowledges and agrees that (i) through the date hereof, each of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, and Issuing Bank has acted in good faith and has conducted itself in a commercially reasonable manner in its relationships with such Credit Party in connection with this Agreement and in connection with the obligations under the Senior Revolving Loan Documents and the Senior Term Loan Documents, as applicable; (ii) as of the date of this Amendment, no Credit Party has any defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against any of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, or Issuing Bank or any of its past or present agents, attorneys, legal representatives, predecessors in interest, affiliates, successors, assigns, employees, directors or officers, directly or indirectly arising out of, based upon, or in any manner connected with, any of the Senior Revolving Loan Documents or the Senior Term Loan Documents or any loans, advances, letters of credit, financial accommodations, or other extensions of credit made to or for the benefit of Borrower or any other Credit Party under any Senior Loan Document; (iii) none of Revolving Agent, Term Agent Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, nor Issuing Bank is in any way responsible or liable for the previous or current condition or any deterioration of the business operations and/or financial condition of any Credit Party; and (iv) none of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, nor Issuing Bank has breached any agreement or commitment to make loans or advances, issue letters of credit, or make any financial accommodations or extensions of credit available to any Credit Party through the date hereof.

 

  

  

  

 

(b) In addition to the foregoing, each Credit Party, together with its successors and assigns (collectively referred to as the “Releasing Parties”), for good and valuable consideration, including, without limitation, the execution of this Amendment by each of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, and Issuing Bank, does hereby unconditionally remise, release, acquit, and forever discharge each of Revolving Agent, Term Agent, Collateral Agent, the Senior Revolving Lenders, the Senior Term Lenders, Swingline Lender, and Issuing Bank, its past and present officers, directors, shareholders, employees, agents, attorneys, parent corporations, subsidiaries, affiliates, successors, and assigns, and the heirs, executors, trustees, administrators, successors, and assigns of any such persons and entities (collectively referred to as the “Released Parties”), of and from any and all manner of actions, causes of action, suits, claims, counterclaims, liabilities, obligations, defenses, and demands whatsoever (if any), at law or in equity, or disputed or undisputed, which any of the Releasing Parties ever had or now have, or may now claim to have against any of the Released Parties for or by reason of any cause, matter, or thing whatsoever, arising at any time prior to the Effective Date.

 

(c) Each Credit Party hereby acknowledges and agrees that it has freely and voluntarily entered into this Amendment after an adequate opportunity and sufficient period of time to review, analyze, and discuss with counsel freely and independently selected by such Credit Party (i) all terms and conditions of this Amendment, (ii) all terms and conditions of any and all other documents executed and delivered in connection with the transactions to which this Amendment makes reference, and (iii) all factual and legal matters relevant to this Amendment and such other documents.  Each Credit Party further acknowledges and agrees that (i) it has actively and with full understanding and in consultation with its counsel participated in the negotiation of this Amendment, after review by its counsel of this Amendment and all other documents executed and delivered in connection with the transactions to which this Amendment makes reference, willingly and voluntarily executed and delivered this Amendment; (ii) all of the terms and conditions of this Amendment have been negotiated at arm’s-length; and (iii) this Amendment and such other documents have been negotiated, prepared, and executed without fraud, duress, undue influence, or coercion of any kind or nature whatsoever having been exerted by or imposed upon any party to this Amendment upon any other party.

 

6. No Novation or Mutual Departure.  Each Credit Party expressly acknowledges and agrees that (a) there has not been, and this Amendment does not constitute or establish, a novation with respect to any obligations owing by any Credit Party under any Senior Revolving Loan Document or any Senior Term Loan Document and (b) the Agreement, as amended by this Amendment, does not constitute any departure (mutual or otherwise) from the strict terms, provisions, and conditions of the Senior Revolving Loan Documents and the Senior Term Loan Documents, other than with respect to the Controlled Accounts as provided in Section 3 of the Agreement, and, solely to the extent applicable, the covenants and agreements contained or described in Section 6 of the Agreement.

 

7. Ratification.  Each Credit Party hereby restates, ratifies, and reaffirms each and every term, covenant, and condition set forth in each Senior Loan Document to which it is a party effective as of the date hereof and in light of the agreements set forth herein (including, without limitation, the guarantee of Holdings under the Senior Guarantee, Collateral, and Intercreditor Agreement).  Except as expressly provided herein, the Agreement shall remain in full force and effect.

 

8. Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.  This Agreement may be executed by each party on separate copies, which copies, when combined so as to include the signatures of all parties, shall constitute a single counterpart of this Agreement.

 

9. Facsimile or Other Transmission.  Delivery by one or more parties hereto of an executed counterpart of this Agreement via facsimile, telecopy, or other electronic method of transmission pursuant to which the signature of such party can be seen (including, without limitation, Adobe Corporation’s Portable Document Format or PDF) shall have the same force and effect as the delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by facsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability, or binding effect of this Agreement.

 

10. No Third Party Beneficiaries.  Each party hereto acknowledges and agrees that the agreements set forth herein are solely for the benefit of each of the parties hereto and that there are no third-party beneficiaries to, and no person or entity other than a party hereto is entitled to rely on, this Agreement or any of terms or provisions set forth herein.

 

11. Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the internal laws of the State of New York, but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

 

12. Loan Document.   The parties hereto acknowledge and agree that the Agreement, as amended hereby,  constitutes a “Loan Document” under each of the Senior Loan Agreements.

 

13. Construction.  No provision of this Amendment shall be construed against or interpreted to the disadvantage of any party to the Agreement by any court, tribunal, or arbitration panel by reason of such party’s having or been deemed to have structured, dictated, or drafted such provision.

 

14. Effective Date.  This Amendment shall become effective on the first date on which the Agents shall have received a duly executed counterpart of this Amendment executed by each Credit Party, Revolving Agent, Term Agent, Collateral Agent, those Senior Revolving Lenders which constitute “Required Lenders” under the Senior Revolving Loan Agreement, those Senior Term Lenders which constitute “Required Lenders” under the Senior Term Loan Agreement, Swingline Lender, and Issuing Bank (such date, the “Effective Date”).

 

 

[SIGNATURES ON FOLLOWING PAGES.]

  

  

  

IN WITNESS WHEREOF, each of the following have caused this Amendment to be duly executed by its duly authorized officer as of the day and year first above written.

 

HOLDINGS:

GALLARUS MEDIA HOLDINGS, INC., a

Delaware corporation

By:           /s/ Gerard P. Parker                                                      

Name:       Gerard P. Parker                                                      

Title:         Chief Financial Officer                                                      

 

TERM BORROWER AND REVOLVING

BORROWER:

NETWORK COMMUNICATIONS, INC., a

Georgia corporation

By:           /s/ Gerard P. Parker                                                      

Name:       Gerard P. Parker                                                      

Title:        Chief Financial Officer                                                      

  

  

  

REVOLVING AGENT, TERM AGENT,

COLLATERAL AGENT, A SENIOR

REVOLVING LENDER, AND SWINGLINE

LENDER:

TORONTO DOMINION (TEXAS) LLC

 

 

By:           /s/ Robyn Zeller                                                                

Name:        Robyn Zeller                                                                

Title:          Vice President                                                                           

  

  

  

ISSUING BANK:

THE TORONTO DOMINION BANK, NEW

YORK BRANCH

 

 

By:           /s/ Robyn Zeller                                                                

Name:       Robyn Zeller                                                                

Title:         Vice President                                                                           

 

 

  

  

  

SENIOR REVOLVING LENDER:

Wells Fargo Capital Finance, Inc.                                                                

[NAME OF SENIOR REVOLVING LENDER]

By:           /s/ Blair K. Merkens                                                                

Name:       Blair K. Merkens                                                      

Title:         Senior Vice President                                                                

 

  

  

  

SENIOR TERM LENDER:

Wells Fargo Capital Finance, Inc.                                                                

[NAME OF SENIOR TERM LENDER]

By:           /s/ Blair K. Merkens                                                                

Name:       Blair K. Merkens                                                      

Title:         Senior Vice President                                                                

  

  

  

SENIOR TERM LENDER:

NATIXIS                                                      .           

[NAME OF SENIOR TERM LENDER]

By:           /s/ Mark Harrington                                                      

Name:       Mark Harrington                                                      

Title:         Senior Managing Director                                                      

 

 

By:           /s/ Tefta Ghilaga                                                      

Name:       Tefta Ghilaga                                                                

Title:          Director                                                      

 

  

  

  

SENIOR TERM LENDER:

Invesco Van Kampen Senior Loan Fund

By: Invesco Senior Secured Management, Inc. as

Sub-Advisor

By:           /s/ Thomas H. B. Ewald                                                      

Name:        Thomas H. B. Ewald                                                                

Title:           Authorized Signatory                                                    

  

  

  

                                                                SENIOR TERM LENDER:

Invesco Prime Income Trust

By: Invesco Senior Secured Management, Inc. as

Sub-Advisor

By:           /s/ Thomas H. B. Ewald                                                      

Name:       Thomas H. B. Ewald                                                                

Title:          Authorized Signatory                                                      

 

  

  

  

SENIOR TERM LENDER:

Invesco Van Kampen Senior Income Trust/

By: Invesco Senior Secured Management, Inc. as

Sub-Advisor

By:           /s/ Thomas H. B. Ewald                                                      

Name:       Thomas H. B. Ewald                                                                

Title:          Authorized Signatoryexhibit10_1.htm

	  	
Peadar Mac Canna

	
Citibank Europe plc

	  	
Director

	
1 North Wall Quay

	  	
Trade Business Management

	
Dublin 1, Ireland

	  	  	  
	  	  	
Tel       +353 (1) 622 4567

	  	  	
Fax       +353 (1) 622 2741

	  	  	
peadar.maccanna@citigroup.com

Date     20th August 2010

 

 

Tim Courtis

 

Greenlight Reinsurance, Ltd

65 Market Street

Suite 1207, Jasmine Court

Camana Bay, PO Box 31110 Grand Cayman, KY1-1205

CAYMAN ISLANDS

 

 (the “Company”)

 

Dear Tim,

	
1.  

	
Committed letter of credit facility

Further to recent discussions, Citibank Europe plc (the “Bank”) is pleased to provide a one year committed Letter of Credit issuance facility (the “Facility”) to the Company subject to the terms and conditions set out in this Letter, (the one year anniversary of the date hereof being the “Facility Termination Date”, provided that the Facility shall be extended by 364 days beyond the then effective Facility Termination Date unless the Bank or the Company delivers a written notice of cancellation to the other party at least 120 days prior to the then effective Facility Termination Date.

For the avoidance of doubt, any termination shall not affect any outstanding credits at the then effective Facility Termination Date, nor shall it prevent the Bank    continuing provide the Facility on an uncommitted basis but otherwise on the terms of this Letter.

2.           Amount

The Facility shall be in a maximum aggregate amount of USD 400,000,000 (the “Facility Limit”).

3.           Facility Documents

The Company shall enter into the following documents in relation to the Facility:

	
                 (a)  

	
The Insurance Letters of Credit - Master Agreement (Form 3/CEP) (the “Master Agreement”);

	
                 (b)  

	
A Reinsurance Deposit Agreement (Form 12/CEP)

 (c)   The Corporate Mandate;

 (d)   The General Communications Indemnity; and

 (e)  any other documents which the Bank and the Company agree to be expedient in connection herewith or the issuance, establishment, maintenance of any credit.

In the event of any inconsistency between the terms of this letter and the terms of any Facility Document, the terms of this letter shall prevail.

4.           Conditions precedent

Excluding (h) below, the Company shall not request the issuance of any Credit until the Bank has received the documents and other evidence specified below in a form and substance satisfactory to the Bank (each a “Condition Precedent”):

	
  

	
 (a)

	
the enclosed duplicate of this Letter, duly executed on behalf of the Company before 20th August 2010;

	
                 (b)  

	
the other Facility Documents together with any document to be delivered under the Facility Documents, duly executed on behalf of the Company;

	
  

	
   (c)

	
evidence that all registrations, filings and other steps necessary (other than any specifically referred to as conditions subsequent) to perfect any security interest created pursuant to the Facility Documents have been fulfilled;

 (d)   wet-ink certified copies of the constitutional documents of the Company;

 (e)   that the letter of credit facility dated 12 October 2005 between Citibank N.A. and the Company (as amended, supplemented, or otherwise modified)  (the “Original Facility”) has been terminated or cancelled;

 

 (f)   appointment of process agent documentation as required by clause 15.3 of this Letter;

 (g)   such other documents, information and other evidence as the Bank may reasonably require prior to the date of issuance of the initial Credit in order to comply with the Bank’s anti-money laundering and other know-your-customer policies and procedures, including (without limitation) copies of reports from the Company’s external auditors and details of the Company’s directors and owners; and

	
  

	
(h)

	
a request in form and substance satisfactory to the Bank for the issuance of a Credit in favour of Citibank N.A. drawable by Citibank N.A. in connection with any letter of credit or similar instrument issued by Citibank N.A. under or in connection with the Original Facility in form and substance satisfactory to Citibank NA.

 

5.           Utilisation requests

	
5.1  

	
Whenever the Company wishes the Bank to issue a Credit under the Facility, it shall give to the Bank a duly completed application form in accordance with the Master Agreement and at least 3 Business Days before the proposed issue date for the Credit.

	
5.2  

	
The Bank shall be entitled to examine each request to issue a Credit on a case-by-case basis and, notwithstanding clause 1(a)(i) of the Master Agreement during the continuance of this Letter, shall only be entitled to decline any such request without liability where:

	
(a)  

	
such request would cause the Bank to be in breach of any law of any jurisdiction (including non-exclusively any breach of sanctions imposed by the law of the United States of America or England); or

	
(b)  

	
the tenor of the Credit is longer than 15 months; or

	
(c)  

	
there is a failure to deposit in a Reinsurance Deposit account held with Citibank N.A. (London Branch) in an amount required under the terms of the Reinsurance Deposit Agreement.

6.           Interest

	
6.1

	
The Company shall pay interest on the amount drawn by a Beneficiary under a Credit at a rate per annum of LIBOR plus 2.5% from the date of drawing until the date of reimbursement by the Company.

	
6.2

	
Any interest accruing under this paragraph 6 shall be immediately payable by the Company on demand by the Bank. Overdue interest shall be compounded in accordance with the usual practice of the Bank as outlined below in respect of unauthorised overdrafts.

6.3           Interest due from the Company under this Letter shall:

 (a)    be compounded and accrue from day to day;

	
  

	
 (b)

	
be calculated on the basis of the actual number of days elapsed and a 360 day year (or such other day count convention as is market practice for the relevant currency); and

 (c)    be payable both before and after judgment.

7.           Fees

The Fees that the Company is obliged to pay to the Bank in connection with the Facility have been separately agreed between the Company and the Bank.

8.           Representations and Warranties

The Company represents and warrants to the Bank (x) on the date of its acceptance of this Letter and (y) with respect to (a), (c), (d), and (f) below, also on the date of issuance of a Credit and until this Letter has expired or terminated, as follows.

	
  

	
(a)

	
It (i) is duly organised, validly existing and (to the extent applicable) in good standing under the laws of its jurisdiction of incorporation or organisation, (ii) is duly qualified to do business and (to the extent applicable) in good standing in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, (iii) has the requisite corporate power and authority and the right to own and operates its properties, to lease the property it operates under lease, and to conduct its business as now and proposed to be conducted, and (iv) has obtained all material licenses, permits, consents or approvals from or by, and has made all filings with, and given all notices to, all governmental authorities having jurisdictions, to the extent required for such ownership, operation and conduct (including, without limitation, the consummation of transactions contemplated by this Letter and the other Facility Documents) as to each of the foregoing, except in each case referred to in clauses (ii) and (iv) where the failure to do so would not have a Material Adverse Effect.

	
  

	
(b)

	
The execution, delivery and performance by it of this Letter and any other Facility Document to which it is a party and the consummation of the transactions contemplated hereby, are within the Company's corporate powers, have been duly authorised by all necessary corporate action, and do not contravene the Company's constitutional documents.  Nor do any of them contravene (i) any applicable law or (ii) any contractual restriction binding on or affecting the Company in a way that has, or that could reasonably be expected to have, a Material Adverse Effect.

	
  

	
(c)

	
No authorisation or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any third party is required for the due execution, delivery and performance by the Company of this Letter, any other Facility Document to which it is a party or in respect of any Credit, except for those authorisations, approvals, actions, notices and filings that have been duly obtained, taken, given or made and are in full force and effect and except where the failure to obtain such authorizations, approvals, actions, notices and filings does not and cannot have a Material Adverse Effect.

	
  

	
(d)

	
This Letter and the other Facility Documents have been duly executed and delivered by the Company and constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, subject to (i) the effect of any applicable bankruptcy, insolvency, reorganisation, moratorium or similar law affecting creditors' rights generally and (ii) the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).

	
  

	
(e)

	
The consolidated financial statements included in the most recent 10Q filing of the Group, copies of which have been furnished to the Bank, fairly present the consolidated financial condition of the Group in accordance with generally accepted accounting principles consistently applied.  Since the date of such filing there has been no Material Adverse Effect.

	
 

	
(f)

	
There is no pending or, to the knowledge of the Company, threatened action, suit, investigation, litigation or proceeding affecting any member of the Group before any court, governmental agency or arbitrator that could reasonably be expected to have a Material Adverse Effect or if brought by a third party, purports to affect the legality, validity or enforceability of this Letter or any Facility Document or the consummation of the transactions contemplated hereby and, in each case, is reasonably likely to be successful.

 

	
9.

	
Undertakings

The Company undertakes to the Bank that it shall:

	
  

	
(a)   post each annual 10K filing when available on www.sec.gov and in any event within 90 days of its financial year end;

	
                 (b)  

	
post each 10Q filing when available on www.sec.gov and in any event within 45 days of the end of the relevant quarter;

promptly upon it becoming aware of the event, provide the Bank with notice of any change in that Company’s ownership structure such that its ultimate parent (as at the date of this letter) ceases to own, directly or indirectly, a majority of the equity of the Company, or upon any announcement of such a restructuring by the parent.

 

10.           Costs and Expenses

10.1          The Company undertakes to indemnify the Bank, within 5 Business Days following demand, for and against all actions, proceedings, liabilities, losses and damages in connection with this Letter (except to the extent arising from the gross negligence or wilful misconduct of the Bank)

10.2          The Company undertakes within 5 Business Days to pay or reimburse the Bank for all:

 (i) reasonable invoiced out-of-pocket charges, costs and expenses which the Bank actually incurs (including non-exclusively the cost of all required registrations and any other legal fees that the Bank actually incurs in relation to the Facility) in connection with the preparation and administration of this Letter; and

 (ii) out-of-pocket, charges, costs and expenses which the Bank incurs in connection with the enforcement of this Letter.

11.           Certificates

Any demand, notification or certificate issued by the Bank specifying any amount due under this Letter or any Facility Document or any determination of any ratio shall, in the absence of manifest error, be conclusive and binding on the Company.

12.           Events of Default; Miscellaneous

12.1          Any of the following events shall constitute an Event of Default:

 (a)  the Company fails to pay on its due date any amount payable by it under this Letter (including pursuant to Sections 6.1, 6.2, 7 or 10 hereof) within five Business Days of its due date;

 (b)  the Company fails to comply with any of its other obligations (not specified in Section 12.1(a) above) under any Facility Document provided that no Event of Default will occur under this clause if (i) the non-compliance is capable of remedy and (ii) the Company remedies the non-compliance within ten Business Days of the Bank notifying the Company of the non-compliance;

 (c)  any representation or warranty made by the Company in any Facility Document shall be incorrect in any material respect when made; or

 (d)  the Company’s ownership structure changes such that its ultimate parent (as at the date of this letter) ceases to own, directly or indirectly, a majority of the equity of the Company.

	
12.2

	
Whilst an Event of Default is continuing, the Bank may at any time terminate the availability of the Facility to the Company.  If an Event of Default occurs under Clause 12.1(d), to assist the Bank in determining whether to terminate the availability of the Facility, the Bank may ask the Company to provide (or procure the provision by the new owner) to the Bank of any documents, information and other evidence the Bank reasonably requires in order to comply with the Bank's anti-money-laundering and other know-your-customer policies and procedures in relation to the new owner.

	
12.3

	
The rights of the Bank under this Letter and the Facility Documents may be exercised as often as necessary; are cumulative and not exclusive of its rights under the general law; and may be waived only in writing and specifically. Delay in exercising or non-exercise of any such right is not a waiver of that right.

	
12.4

	
If any provision of this Letter or any Facility Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect (i) the legality, validity or enforceability in that jurisdiction of any other provision of that document; or (ii) the legality, validity or enforceability in any other jurisdiction of that or any other provision of that document.

	
12.5

	
In no event shall the Bank or the Company be liable on any theory of liability for any special, indirect, consequential or punitive damages and each of the Bank and the Company hereby waives, releases and agrees not to sue the other party hereto upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its or their favour.

	
12.6

	
Whilst an Event of Default is continuing, the Bank may set off any obligation of the Company under the Facility Documents to which it is a party or in respect of any Credit (whether present or future, actual or contingent) against any obligation owed by the Bank to such Company or Citibank N.A., regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

	
12.7

	
The terms of this Letter may not be waived, modified or amended unless such waiver, modification or amendment is in writing and signed by each of the Bank and the Company, nor may the Company assign any of its rights hereunder without the prior written consent of the Bank.

	
12.8

	
Clauses 9 and 10 of the Master Agreement shall apply in respect of this Letter, with necessary changes.

 

13.           Definitions and Interpretation

13.1        Terms defined in any Facility Document shall have the same meanings when used in this Letter. Additionally, the following terms have the following meanings.

	
  Business Day means a day (other than a Saturday or a Sunday) on which banks are generally open in Dublin and London.

	
  Facility Documents means the documents specified in paragraphs 3(a) through 3(e) and any other document pursuant to which a security interest, guarantee or other form of credit support is created or exists in favour of the Bank in respect of the obligations of the Company under this Letter.

	
  Group means the Company and each other person from time to time included in the consolidated financial statements of the Company filed with the Securities and Exchange Commission.

	
  LIBOR means the overnight rate for US Dollars which appears on the screen display designated "Reuters Screen LIBOR01" on the Reuters Service (or such other screen display or service as may replace it for the purpose of displaying the relevant British Bankers' Association Interest Settlement Rates for deposits in US Dollars in the London interbank market) at or about 11.00 a.m. on the relevant day.

	
   Material Adverse Effect means an event or circumstance having a material adverse effect on the financial condition of (i) the Company; or (ii) the Group as a whole; or (iii) the legality, validity or enforceability of any Facility Document against the Company.

 

13.2          In this Letter (unless otherwise provided):

 (a)   words importing the singular shall include the plural and vice versa;

 (b)   references to:

	
  

	
(i)

	
paragraphs are to be construed as references to the paragraphs of this Letter;

	
  

	
(ii)

	
any document shall be construed as references to that document, as amended, varied, novated or supplemented;

	
  

	
(iii)

	
any statute or statutory provision shall include any statute or statutory provision which amends, extends, consolidates or replaces the same;

	
  

	
(iv)

	
any document or person being acceptable or approved or satisfactory shall be construed as meaning acceptable to or approved by or satisfactory to the Bank in its sole discretion;

	
  

	
(v)

	
a person shall be construed so as to include that person's assignors, transferees or successors in title and shall be construed as including references to an individual, firm, partnership, joint venture, company, corporation, body corporate, unincorporated body of persons or any state or any agency of a state; and

	 	
(vi)  

	
time are to London time.

	
13.3

	
The headings in this Letter are for convenience only and shall be ignored in construing this Letter.

	
14  

	
Communications

	
14.1

	
Any notice or demand to be served on the Company by the Bank hereunder may be served:

	
  

	
(a)

	
Personally on any officers listed in such Company’s General Communications Indemnity and dated this date as amended from time to time (such shall be referred to as “Authorized Officer(s)”);

 (b)  By registered or certified letter addressed to:

 Greenlight Reinsurance, Ltd.

 P.O. Box 31110

 65 Market Street, Suite 1207

 Jasmine Court, Camana Bay 

 Grand Cayman, KY1-9006

	
  

	
Cayman Islands

	
  

	
(c)

	
by posting the same by letter addressed in any such manner as aforesaid to such registered office or principal place of business; or

	
  

	
(d)

	
by telex or facsimile addressed in any such manner as aforesaid to any then published telex or facsimile number of ourselves.

	
14.2

	
Unless otherwise stated, any notice or demand to be served on the Bank by the Company hereunder must be served on the Bank either at its address stated at the beginning of this Letter (or such other address as the Bank may notify the Company of from time to time) or by facsimile to such number as the Bank may notify the Company of from time to time.

14.3           Any notice or demand:

	
  

	
(a)

	
sent by post shall be deemed to have been served on the relevant party on the third Business Day after and exclusive of the day of posting; provided that a copy of all such communications sent by post shall be sent via facsimile or other form of electronic communication; or

	
  

	
(b)

	
sent by telex or facsimile shall be deemed to have been served on the relevant party when confirmation is received.

In proving such service by post it shall be sufficient to show that the letter containing the notice or demand was properly addressed and posted and such proof of service shall be effective notwithstanding that the letter was in fact not delivered or was returned undelivered.

15.           Governing Law

	
15.1

	
This Letter and all non-contractual obligations arising out of it or in connection with it shall be governed by English law and for the benefit of the Bank the Company irrevocably submits to the jurisdiction of the English Courts in respect of any dispute which may arise from or in connection with this Letter or any Credit.

	
15.2

	
A person who is not a party to this Letter has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of this Letter.

	
15.3

	
The Company designates the address below as its address for service of all claim forms, application notices, judgments, orders or other notices of English legal process relating to this Letter and any other Facility Document governed by English law.

	
  

	
Corporation Service Company (UK) Limited Elysium Gate, Unit

	
  

	
20/21, 126-128 New Kings Road London SW6 4LZ, United Kingdom

	
  

	
Items served at this address must be marked for the attention of the Company.

	
15.4

	
The Company must have the same address for service and it must be an address in London, United Kingdom.  If the Company wishes to change their address for service, the Company may do so by giving the Bank at least 10 Business Days' written notice of the new address for service.

 

16.           Anti-Tying

Citigroup’s Corporate and Investment Bank’s anti-tying policies are incorporated herein by reference.

17.           Force and Effect

Notwithstanding anything contained in this Letter, both the Company and the Bank agree that this Letter and the provisions contained herein shall not come into full force and effect until October 12th 2010.

Yours faithfully,

Signed: Niall Tuckey                                        

For Citibank Europe Plc

 

We hereby confirm our agreement to the above:

Dated: August 20, 2010

 

	Signed:  	/s/ Tim Courtis	Signed:	/s/ Faramarz Romer
	Name: 	Tim Courtis	Name:	Faramarz Romer
	Title: 	Chief Financial Officer	Title:	Reporting & Compliance Officer 

For and on behalf of Greenlight Reinsurance, Ltd.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]